Jamaica received US$242 million in Foreign Direct Investments (FDI) in 2011, which was a 5.8 per cent increase over the US$228 million in 2010.
This is contained in the latest World Investment Report of the United Nations Conference on Trade and Development (UNCTAD), the findings of which were released yesterday (July 5), at a seminar held at JAMPRO offices in New Kingston.
JAMPRO President, Sancia Bennett-Templer, said the increase in flows to Jamaica is a step in the right direction, coming off the global economic recession.
She said Jamaica outperformed the wider Caribbean, which saw a decline of 3.6 per cent. This, she said, was despite a global increase of 16 per cent in FDI flows to US$1.5 trillion, signaling the start of the recovery of global investment in the post-economic depression era.
Mrs. Bennett Templer said a significant part of Jamaica’s increase in FDI inflows could be attributed to the $288 million investment from Korea East-West Power Company Limited.
In addition, the island was highlighted twice in the top 10 largest Greenfield projects recorded in Small Island Developing States, with LIME’s investment of
$282 million; and CMA GGM investing $100 million for water transportation.
She said UNCTAD pointed out that small island developing states (SIDS) have traditionally been more dependent on Greenfield investments over mergers and acquisitions.
“In the Jamaican context, many of the major Greenfield projects seen over the last decade have been directly linked to Government’s deliberate policy decisions. Key among these relate to the decision to employ the public/private partnership (PPP) policies methodology with respect to major road infrastructure and the groundbreaking decision to liberalize the telecoms sector,” she said.
The JAMPRO President noted that the success of all investments rests with the development of a policy framework, which will not only serve to attract viable investment projects but create and maintain an environment that facilitates the sustainable effects of these investments.
“The focus on sustainable investments is also in keeping with one of UNCTAD’s main principles of investment policymaking, which notes that the overarching objective of such policy should be to promote investment for inclusive growth and sustainable development,” she stated.
She said Jamaica is actively reviewing its investment policies in order to ensure that the country has the most effective framework to stimulate increased investment flows into the island.
Focus is being placed on improving the country’s business climate, and reforming of the tax, privatization, and PPP policies.
In addition, Mrs. Bennett Templer said, the government recognises the need to develop and package major investment projects such as the development and positioning of Jamaica as a major logistics hub, given the opportunities existing from the expansion of the Panama Canal.
She noted that even though firms are less optimistic about 2012 than initially indicated, the prospects for FDI outflows continue to improve with increased optimism surrounding medium-term prospects in 2013 and 2014.
“It is, therefore, important that Jamaica’s investment policy framework be developed in such a way as to afford the country the most competitive advantage so as to compete in the global arena for the existing pool of investment funds,” she stated.
By Chris Patterson, JIS Reporter