Jamaica Reaping Dividends from FDI Flows

Jamaica has been ranked as the highest maximizing Foreign Direct Investment (FDI) destination in the Caribbean and comes in 20th on a per capita basis in the world.
“During the past decade, we have seen a quadrupling, even five to six times the increments of FDI. We peaked out at US$720 million in 2003 and we have managed to move to the top of the scale where the Caribbean is concerned”, says Michael McMorris, Executive Director of Markets at JAMPRO.
Mr. McMorris says JAMPRO has played a significant role in attracting investment to Jamaica as well as sourcing local direct investment. He notes that other agencies of government and ministries, embassies, as well as the private sector, have played a major role in JAMPRO’s efforts. “It’s a joint effort. We (JAMPRO) play the role of specifically targeting prospects for the kind of opportunities that we think are worthwhile in our economy – that’s the primary role that we have in terms of lead development.”
He tells JIS News, that JAMPRO carries out its mandate through general image building, advertising and public relations. “We work to develop prospects through the bureaucratic process of looking for approvals and getting them up and running as soon as possible,” he adds.
JAMPRO also responds to enquiries that come through image building or general advertising, or those that arise from general notoriety about what Jamaica has to offer.
Mr. McMorris says that because of the country’s attractive geographic location, investors often look to Jamaica for opportunities such as shipping.
Call centres have also become successful operations with the liberalization of the information technology (IT) and telecommunications industry. This sector has experienced significant investment and interest from overseas. “So, it’s our job to really respond as quickly as possible and get them (investors) into a mode where they can think about Jamaica as an investment destination,” Mr. McMorris notes.
Meanwhile, through its strategic targeting approach, JAMPRO is placing focus on the tourist market in Europe, as it seeks to diversify the number of brand choices that are available to tourists, who visit the island.
“Our strategy has been to go after these large integrated European chains, which have the ability to bring their own clientele with them. There are people in Europe, who unfortunately have never heard about a Sandals or a SuperClubs and who won’t make that leap to come to Jamaica until we have a brand that’s familiar to them,” he points out.
“So somebody who sees the Ritz Carlton in Jamaica may choose to come here. Once they are here, they may very well decide that Sandals or SuperClubs is their choice, or they may stay at the Ritz – the fact of the matter is that Jamaica wins in either of those cases,” he illustrates.
Highlighting the success experienced with the Spanish chain Riu, Mr. McMorris says that the construction of the hotel has literally seen the explosion of Spanish arrivals. “It’s one of the fastest growing demographics that we have. With the kind of success that we have had where we are going to see the building of at least four hotels this year, we think the future is very, very bright,” he comments, noting that the projects will also auger well for the construction industry.
“We certainly want to ensure that local businesses cluster around the development of these hotels with more and more local participation in terms of attractions and supplies. That will have a huge multiplier effect throughout the entire economy and so we are looking forward to that,” he adds.
Recognizing that these large hotels may erode the competitiveness of the smaller properties, Mr. McMorris informs that JAMPRO was working with its partners across the various sectors on a “linkages programme” to ensure that smaller hotels are successful and benefit from the presence of the larger hotels.
State Minister for Industry and Tourism, Dr. Wyekham McNeill, speaking at the opening of the recent two-day tourism linkages business seminar, said it was well recognised that the provision of an EP (European Plan) product preferred by the European market created an enhanced role for Jamaican small hotels, apartments and villas and add to the potential for visitor growth.
Mr. McMorris says that the seminar also provided “an opportunity to take local companies and put them in front of investors, who are about to build hotels, to talk about the things that they need, what are the standards of the supplies that they are going to expect to get from the market, because if they don’t get it here, they are going to import it. We have to get in there and find niches for our services”.
“We are looking at programmes that would take into consideration technical assistance from some of the other funding programmes we manage, such as the private sector development programme. Change is good, what we have to do is ensure that we preserve the brightest and the best and work with them,” he states.Turning to the IT, Mr. McMorris mentions successes in the establishment of contact centre operations, business processing and outsourcing.
“We have been able to develop a rapport with the outsourcing market in the United States. Current observations are that in finance and insurance, the potential is US$112 billion for moving jobs and strategies offshore over the next three to four years,” Mr. McMorris informs.
He says that despite a few hurdles, Jamaica has done well in the area of IT. “We have certainly continued to forge ahead. We are the largest, the most dominant call centre destination in the Caribbean today with upwards of 6,000 call centre seats,” he comments.
He says that while international brand names such as Verizon are important, remarkable work is being done by local entrepreneurs such as Westcom and E-Services, which are already gaining a worldwide reputation. “We also work with new companies out of the United States to look at Jamaica for the first time to see that our telecommunications is world class and that the kind of people that we have here can give them what they need in that arena,” he adds. The economics department of the Jamaica Public Service Company has also been working with JAMPRO to identify those types of companies and bring them to Jamaica. JAMPRO also has an ongoing targeting programme in the area of film. “We have an ongoing targeting programme there.our Film Commissioner for example sits on the Board of the Association of Film Commissioners (AFC) and that way we can get a global perspective,” he informs. He notes that it was by influencing strategic boards such as the AFC and the World Investment Promotion Agency (WIPA) of which JAMPRO President, Patricia Francis is immediate past president, that Jamaica could be pitched “with a global profile”. Other programmes include those that provide technical assistance. “We try to garner funds and technical know-how for our local companies and in this way, we can ensure that there is collaboration between those companies that work with those technical assistance funds, as well as our local companies,” he says.(more)FDI Flows.5The Private Sector Development programme is one such programme. Under the European Union (EU) funded initiative, some $28 million Euros, inclusive of $8 million Euros put up by the government of Jamaica, will be invested in the local private sector over the next four years. The programme is scheduled to end in 2008. “We have also tried to establish a profile by having things done inside the country, so other than just targeting your ongoing trade shows in Europe or in the United States, we have tried to also use the Caribbean profile to get people into the Caribbean to look at what’s here,” Mr. McMorris explains.One such initiative is the annual Euro Money Caribbean Investment Conference. “What this seeks to do is to bring investors, government representatives, journalists, local investors and entrepreneurs together on an annual basis,” he explains. For the first two years of its inauguration, the conference was staged in Jamaica and has since been hosted in other countries around the Caribbean.Meanwhile, JAMPRO hosted the Caribbean Investment Conference early last year as well as a follow-up session later in the year, which was specifically dedicated to Jamaica, whereby stakeholders were able to work with the Caribbean Hotel Association to bring hoteliers, and attraction managers to Jamaica to interface with prospective local developers. “It gives us the kind of on the ground discussions where you can touch and feel what’s happening in Jamaica and that leads to a lot of quick decisions,” Mr. McMorris remarks. JAMPRO also pioneered the now popular Caribbean Fashion Week along with Pulse Investments Limited. “People now recognize that we can host and manage our own events here, that there is something that is going on independent of the US and Britain, that we have our own culture, our own organization, our own tourism development,” he notes.(more) FDI Flows.6In addition, the Modernization of Industry Programme encourages local producers to retool and bring in new machinery to maintain and increase their competitiveness. General Consumption Tax and import duties are waived for companies under this programme. “This has been very important for our manufacturers and agricultural processors alike,” he informs.Since the agency does not provide actual incentives, the essence of its role is collaborative, and involves close working relationships with government ministries and agencies. “The Ministry of Development, to which we report acts, as a sort of filip throughout the government to ensure that we keep our eyes focused on the fact that FDI is very important to the country, that local direct investment is important and we have to keep working on it,” Mr. McMorris says.JAMPRO also works closely with the Jamaica Tourist Board, the overseas missions as well as international agencies such as the Canadian International Development Agency (CIDA), the United States Agency for International Development (USAID) and the EU, which Mr. McMorris says, is a critical partner. He notes that the local trade associations such as the Jamaica Manufacturers Association (JMA), the Private Sector Organisation of Jamaica (PSOJ) and the Jamaica Exporters Association (JEA), are also pivotal to the work of the promotions agency. Mr. McMorris also credits the Foreign Affairs and Foreign Trade Ministry for its lead role in furthering relations with other countries, making note of the recently concluded China/Caribbean Economy and Trade Cooperation Forum and developments in trade and investment between the countries.
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FDI Flows.7He says that JAMPRO is in continued partnership with the Council for Promotion of Investment and Trade in China and well as the Cuban Chamber of Commerce and has ties with similar organisations in other countries.The World Trade Promotion Organisation is another association that JAMPRO has been happy to be a part of, having recently copped the title of the world’s best trade promotional agency for 2005/2006 in the small countries category. “We are very proud of that. We think that’s a testimony to the work that we do with the JEA, the PSOJ and the JMA because it is only through that kind of partnerships that we could ever hope to cop an award like that,” Mr. McMorris tells JIS News. The JAMPRO Executive points out that the agency has evolved in its role over the years having been through “a long and arduous restructuring to try and maximize the resources that we have”.”As the government has tightened its belt overall, JAMPRO has not been spared, but what we have tried to do is work with that and continue the refinement to where we have very dedicated focused professionals, who understand the vision of why FDI is important, why local investment and export are important, and how to influence the impact that JAMPRO has, through linkages and targeting pivotal industries,” he states.