Sangsters Jamaica Real Estate

Home - Jamaica Real Estate News / Finance / Stories










Jamaica News - Real Estate - Finance (April 08, 2005)
Those who are blessed have a higher responsibility Says AIC's Lee-Chin
"Those who are blessed - who are born in countries that equip them with confidence and experiences that foster growth - have a higher responsibility to those less fortunate," Michael Lee-Chin, Chair and CEO, AIC Limited, told participants today at the annual Business & Society Conference held by the University of Toronto's Rotman School of Management.  

Lee-Chin described how, as a young student, he struggled to pay the tuition for his first year of university, until a senior Jamaican government official agreed to provide him with a scholarship. "I would not be standing here today without his generosity," he said. Years later, it was time to repay the favor to his country of origin.

When AIC bought National Commercial Bank Jamaica Ltd. in January 2002, the Bank was lethargic and non-competitive. "We bought 75 per cent of the Bank that had 40 per cent ownership of the marketplace, and our purpose from the beginning was nationalistic: to build a better Jamaica." 

Rife with high crime, weak currency, weak infrastructure, and citizens with low confidence, Lee-Chin asked himself, 'if I was CEO of Jamaica, what would I do to fix it?' Many Jamaicans would regularly export their savings to Canada or somewhere else, which further damaged the economic system by weakening the currency and raising interest rates, leading to a cascading negative cycle.

"Business leaders must put their minds to the challenges of their communities. We looked at the challenges facing Jamaica, and we realized that if the country was wealthier, many of its problems would likely go away. As luck would have it, creating wealth was something we know about."

Lee-Chin says there are two key traits of firms that are successful over the long-term: "first, they remain entrepreneurial in spirit as they grow; and second, they have a bigger purpose beyond making money." 

The principles of wealth creation are the same, whether you're an individual, a business or a country, he says. "First, you must optimize and compound individual capital, and there are three variables associated with this: it entails maximizing knowledge, experience, and control of people's emotions."

"We realized that if we could help educate the population, we could create and retain human capital." The result: the Jamaica Education Initiative. "We created a credit card (called 'Key Card'), where one per cent of all charges go to education. This allows everyday people to be philanthropic in their consumption." A year after this was implemented, Key Card use was up 88 per cent. "The funds allowed us to create 200 scholarships;

13,600 students were able to write the exam that leads them from high school to college; and mentoring and tutoring programs were established." The virtuous cycle was off and running.

The second thing you need to do to create wealth is to optimize and compound financial capital, says Lee-Chin. "We made a commitment: to not repatriate one penny of Bank dividends back to Canada, despite the fact that the Bank is largely Canadian-owned. Last year, this enabled us to reinvest $25 million in Jamaica; and this year, we expect it to rise to $35 million."

The funds have been spent on everything from real estate, to Life of Jamaica (a life insurance company), to the Kingston Wharfs. "The best part is, people see AIC spending money in Jamaica and they say, 'maybe I should, too'." In 2003, the Jamaican stock exchange saw a 45 per cent increase; and in 2004, it rose by 67 per cent.

Three years after buying three-quarters of NCB, there is "a cool breeze of optimism blowing through Jamaica," says Lee-Chin. "Locals have started to rethink their former habits and are exporting less of their savings. Confidence is turning - tourist resorts are expanding by thousands of rooms, the currency has stabilized; the interest rate has dropped from 36 per cent to under 13 per cent; and the fiscal deficit is coming down.

"We are convinced that doing well will be a natural by-product of doing good," he says. Recently, former U.S. President Bill Clinton called Lee-Chin up to ask him to tour the world with him telling people about AIC's initiatives in Jamaica, which he feels constitute an ideal model for corporate citizenship. But Lee-Chin is too busy running his companies. "Now is not the time," he says.

Other speakers at the 3rd Annual Rotman Business & Society Conferenceincluded Michael E. Porter, Bishop William Lawrence University Professor, Harvard Business School; Susan Shepard, Chief Ethics and Compliance Officer, Nortel Networks Corporation; Paul Tsaparis, President and CEO, Hewlett-Packard (Canada) Co.; Rose M. Patten, Head of Office of Strategic Management and Senior Executive Vice-President, BMO Financial Group; Don Tapscott, President, New Paradigm Learning Corporation; Adjunct Professor of Strategic Management, Rotman School; Penny Collenette, Executive in Residence, School of Management and Adjunct Professor, Faculty of Law, University of Ottawa; Julia Kirby, Senior Editor, Harvard Business Review; and, Dean Roger Martin of the Rotman School.

Presented by The Monitor Group, the conference is the official launch of the AIC Institute for Corporate Citizenship at the Rotman School. For more details on the AIC Institute, please visit: www.rotman.utoronto.ca/aicinstitute/

The University of Toronto's Joseph L. Rotman School of Management is on a mission to become one of the world's top tier business schools by taking an innovative approach to management education, built around Integrative Thinking(TM) and Business Design(TM).

Back to top

l Home - Real Estate News l Sales l Projects l Finance l Tourism l Economy l Services l General l