Jamaican officials visit D.C. looking for investors
WASHINGTON — Jamaican Prime Minister Andrew Holness, who took office only two months ago, visited Washington last week along with his top economic aide to pitch the Caribbean island nation as an ideal destination for U.S. investment.
Holness and Nigel Clarke, special advisor on economic matters, spoke May 5 to about 40 members of the U.S. Chamber of Commerce. The two men keynoted a breakfast roundtable Q&A following their attendance at a two-day summit led by Vice President Joe Biden on Caribbean and Central American energy security.
“For the first time, natural gas will be exported to the region, and Jamaica will be the first beneficiary of this,” said Holness, who at 44 is the youngest prime minister in Jamaica’s history, and the first to be born after independence in 1962. “This has radically transformed our energy prospects. What we’re discovering is that once you transform energy, all other areas of the economy become viable, and possibilities materialize.”
Holness said foreign companies have now invested more than $400 million in Jamaica’s energy sector — but that the island’s electricity costs are still way too high.
“Jamaica has crossed that critical hurdle and is no longer in the era of expecting investment. We will have to earn that investment by ensuring that our institutional framework aligns with the institutional framework of the partners we want to attract,” said Holness, who led the opposition Jamaica Labour Party until his JLP defeated the ruling People’s National Party in February 26 elections. “That is what my government will be doing — making sure risk is minimized, that foreign investors feel comfortable, and making it seamless, if not far more efficient, than the American system. There is no more bilateral favoritism. We have to compete for investment like anyone else.”
Clarke underscored the importance of Jamaica’s tourism sector, noting that Americans still account for 63 percent of all stopover visitors to Jamaica. He also praised a bill sponsored by Rep. Eliot Engel (D-NY) with bipartisan support that gives greater priority to the U.S.-Caribbean relationship.
Yet some differences do remain, including what the prime minister calls the unfair classification of Jamaica as a tax haven by U.S. authorities — a subject that has grabbed headlines especially after the revelations sparked by last month’s leaking of the Panama Papers.
Jamaica as int’l business center
“Jamaica does not intend to become an offshore banking center. It’s not our intent,” Holness told his Washington audience. “We have passed legislation to establish Jamaica as an international business center, which is different. We’re not seeking to become a tax haven for anyone. We are more interested in business process outsourcing. We have good lawyers and good accountants. That’s part of our services sector, which could be expanded dramatically. We believe we can get 20,000 new jobs in that sector.”
Along those lines, Clarke said his government is “committed to pursuing macroeconomic stability” that has been achieved over the last seven years.
“There is a consensus in society that macroeconomic stability is a crucial enabler of economic growth. On top of that is a process of economic reform,” said Clarke, an Oxford-educated former Rhodes scholar who served as an opposition senator from 2013 to 2015. “For the first time in Jamaica’s history, we have a minister of economic growth and job creation, putting under one ministerial umbrella all the agencies that are key to economic growth.”
Clarke added “for a long time, you couldn’t point to significant investment by U.S. companies in Jamaica outside of tourism.” But that’s changing as the country opens up — particularly in the areas of energy and transportation infrastructure — and “investors from all over have made tremendous amounts of money in Jamaica.”
A key example is the massive $510 million privatization of Jamaica’s Kingston Container Terminal.
“Jamaica is ideally positioned with the widening of the Panama Canal by the beginning of July. We are in the final stage of privatizing our port to the third-largest shipping company in the world, CMA/CGM,” he said, adding that the sale to the French-owned consortium will be finished within a few weeks. “That will come with a commitment to increase the volume of containerized ships, and use the facility as a transshipment hub. That provides a tremendous opportunity for U.S.-based companies that need a beachhead to access markets in Latin America.”
Ron McKay took over 14 months ago as president of AmCham Jamaica. He said said together with the Dominican Republic, Haiti, Colombia and now Cuba, the five AmChams working together “could have a regional influence” in the Caribbean.
“American investment in Jamaica has never been stronger, especially in the past two or three years, and now with the new government,” said McKay, estimating cumulative U.S. investment at more than $500 million — led by tourism, agribusiness and manufacturing.
“In the last 10 years, ICT has become the fastest-growing industry in Jamaica,” said McKay, lavishing praise on Holness. “Six years ago, a very young minister of education sat down with me and asked what we could do to help the private sector invest in Jamaica. This is a prime minister for whom the door is always open. Jamaica has a fantastic base of human resources, and him just being here today sends a message.”