Jamaica
News - Real Estate - Finance (May 19, 2004)
Trade,
business development should take centre stage in diaspora talks
Final plans are being made for the conference
on the Jamaican diaspora to be held in Kingston in mid-June.
Judging by the issues that are to be
discussed, the organisers appear to be giving priority to public-service
delivery, education, health and business development. Thus, presentations are
expected from such local agencies as the Passport Office, the Registrar
General's Department, the Titles Office and the Customs Department as the
traditional providers of critical services to the overseas communities of
Jamaicans.
While these services are in high demand and
necessary for the many daily functions related to the lives of Jamaicans at home
and abroad, they ought to have become more easily accessible after the
significant reforms that were carried out in the 1990s. Furthermore, the advent
of electronic communication has made possible 24-hour per day access to
information and direct access to these local agencies by people living overseas.
While the systems remain dependent on some manual processes, there will, of
course, be hitches that will require continuing close monitoring in terms of
consumer services. One such area is that of registration of births.
Far greater emphasis, however, needs to be
placed on investment services and business development as well as transfer of
knowledge and skills in education and health. Over a span of more than 60 years
of large-scale migration by Jamaicans to the USA, Canada and the United Kingdom,
the economic links with home have been seen through welfare lenses -
remittances. And the flow of remittances has risen dramatically in recent years
moving from US$170.7 million in 1982 to only US$184.2 million in 1990 but to
US$1.36 billion in 2003. It is this flow that has saved us from a gaping hole in
our external accounts and that now surpasses the net combined proceeds from
bauxite and tourism. Indeed, Jamaica has the highest per capita flows of
remittances among the countries of the Latin American and Caribbean region.
This matter of remittances has become so
important to our region in recent years that special studies have been
undertaken to measure its economic impact, and steps taken to re-orient it to
more investment-driven activities. According to one study by the Inter-American
Development Bank (IDB) in 2001, US$20 billion per year is transferred to
countries in our region and this figure represents roughly five cents in every
$1.00 of income earned by migrants in the USA, Japan, Europe and other countries
who are from this part of the world.
The value of remittances also had by 2001
exceeded official development assistance to our countries, reached nearly
one-third of the foreign direct investment flowing into the region and accounted
for at least 10 per cent of GDP in Haiti, Nicaragua, El Salvador, Jamaica,
Dominican Republic and Ecuador. The highest level was in Haiti at 17 per cent,
with Jamaica at 11.7 per cent and the Dominican Republic at 10 per cent. Some
other interesting observations of the IDB study were that remittances were equal
to Mexico's tourism revenues and more than two-thirds of its oil exports. In the
case of Ecuador, those flows were twice the country's foreign direct investment
and three times its revenues from tourism. One of the key challenges identified
was that of developing and testing new financial mechanisms to direct a portion
of the funds into productive investments.
In the rest of the region especially in those
countries from which the bulk of the foreign-born Hispanic population in the USA
originates, the challenges also include increased participation of formal
financial institutions in the transmission of remittances and lowering of the
costs of transactions. Jamaica has made much progress in this respect and hence
our focus must be on finding innovative and reliable mechanisms to mobilise
remittances as a source of investment capital to a greater extent than now
obtains.
Having regard to the regulatory reforms that
have been carried out in the financial sector, real estate and the operation of
companies, a more predictable environment exists. Combined with the clear
investment programme especially in tourism and infrastructure, investors among
the Jamaican diaspora are more interested in opportunities for doing business in
Jamaica. This changed situation requires that private bodies, which have done a
great deal of work among them, become even more creative. But they will need the
help of the investment promotion arms of the government, including JAMPRO, which
should make this aspect of their work a priority.
As Jamaica is poised for an investment take-off,
it is the trade and business development item of the agenda that should take
centre stage in a serious discussion with the Jamaican diaspora. This is not to
downplay public service delivery or the political and cultural dimensions that
are key elements of the relationship, including the economic element. But it is
vital that both Jamaicans at home and abroad treat seriously the transforming
power of the economic potential waiting to be unleashed.
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