Jamaica One of Few Countries in the Region to Record Growth in FDI Flows

Jamaica is among a small number of countries in the region, which experienced growth in Foreign Direct Investment (FDI) in 2003.
As contained in the United Nations World Investment Report 2004, Latin America and Caribbean last year, experienced a decline in FDI flows for the fourth consecutive year, with inflows falling by three percent to $50 billion, the lowest since 1996.
Jamaica, however remained one of the few regional economies, which showed an overall growth in FDI flows over the last four years, in addition to an increase of inflows for the 2003 period over 2002.
Development Minister, Dr. Paul Robertson, speaking at the launch of the UN report at JAMPRO’s headquarters on Trafalgar Road this morning, pointed to statistics from the Bank of Jamaica (BoJ), which showed that Jamaica attracted record FDI inflows of US$720.4 million in 2003 representing an even greater amount than the preliminary estimate of US$520 million. The country also outperformed countries such as Argentina, Costa Rica, the Dominican Republic and Trinidad.
Dr. Robertson said that Jamaica, with its advantage of location, had benefited from the global shift in FDI flows toward services, benefiting from investment in tourism, information and communication technology.
He credited the country’s ability to attract growth in these areas, to government’s initiatives to liberalize the telecommunications sector, the privatization of state-owned companies, growth in the tourism industry and putting incentives in place to attract private capital. “Our reality is that the service economy is our real economy,” he stated.
In addressing arguments, which purport that relying on the service industry made the economy more susceptible to shocks, Dr. Robertson said the flip side of the argument was that the economy would also be able to rebound more quickly from those shocks. “In any case, the structure of the world economy today is so different that it is very difficult to avoid some of those situations,” he pointed out, mentioning the worldwide impact of the September 11, 2001 terrorist attacks on the United States.
Commenting on the growth in the ICT sector, Dr. Robertson said the industry was based on greater levels of value added and its contribution to economic growth and job creation was significantly more than the apparel industry under the 807 arrangement. In 2003, there were 5,000 seats in 13 call centre locations island wide and the sector is growing by about 9.7 percent per annum, he pointed out.
The Development Minister stated further, that the outlook showed possibilities for incremental growth in the sector and the replacement of the jobs lost in the garment sector.
He noted however, that the focus on ICT did not to exempt the need for a strong manufacturing sector but made the case for the country to get involved in areas where it enjoyed a comparative advantage.
In the meantime, he maintained that the strength of the economy lay in its geography, its location and closeness to certain markets and its advances in the ICT and tourism sectors. He said that by 2010, tourism would be more evenly spread across the island and also stood to be totally transformed based on local and foreign investment.
Meanwhile JAMPRO’s President Patricia Francis, announced that next fiscal year, the country should begin to benefit from the European Union-funded private sector development programme, which would see a total of 28 million Euros being spent over a three-year period to develop the services sector.
The investment will provide for the implementation of various sector development programmes and the employment of a corporate finance broker, who will be charged with restructuring domestic investment.
Furthermore, she said, a service sector survey has been commissioned to provide critical information on strategies to be adopted to ensure maximum impact.