KINGSTON — Minister of Industry, Investment and Commerce, Dr. Christopher Tufton, says Government and the Private sector must work even closer in the months ahead to convert investment ideas into business realities through a more aggressive investment strategy, where job creation is the priority.
Speaking at the Rotary Club of Santa Cruz on the weekend the Minister with responsibility for investment said this was critical as the real gains of the Debt Exchange programme and more recent positive macroeconomic indicators such as lower interest rates and stable currency will only be appreciated when it enables business expansion and creates jobs for Jamaicans.
The minister noted further, that while the creation of jobs is clearly in the Government’s interests, it was also necessary for the private sector's profitability and business sustainability, hence the need for partnership.
A legacy of Risk Avoidance
Dr. Tufton argued that with government now succeeding in instituting a more favourable macroeconomic investment climate, the private sector must do more to break the cycle of preference for low or risk- free investments that characterised the local economy for decades.
“There is no doubt that high interest rates were maintained for so long that productive endeavour became a high risk activity, discouraging the entrepreneurial spirit. We have effectively stifled that entrepreneurial spirit and in the process shifted creativity towards trying to beat a system that made it difficult for businesses to comply and stay viable” the investment minister said.
Changing the Investor Mindset
He argued that to fast track investment activity will require a change in the mindset of the private sector towards better and more efficient examination of risk and more willingness to take a calculated chance. The Minister said the government has a critical role to play in this regard, starting with ensuring clear and simplified rules of engagement to reduce transaction costs and fast track business start-ups. At the firm level, the private sector must also build in-house capacity in order to better track and respond to market conditions and business opportunities. It’s not enough to grow from existing customers, but also critical to find new opportunities, he stated.
Volume as important as Value of Investment
According to minister Tufton, a more aggressive investment strategy for job creation must focus not just on the value of the investment but also on the volumes of investments and related jobs that are generated. In this regard, the minister said that there has to be a strong focus on small and medium size businesses and how they can be enhanced even while we work to facilitate the larger mega projects. The minister explained that he does not support the term “jobless growth” as this will only promote a greater divide between the ‘haves and the have nots’ , which is not in Jamaica’s interest.
Minister Tufton said an aggressive investment strategy requires us to prioritise projects and sectors that are easier to establish and expand. He argued that this strategic approach cannot be all things to all men in investment terms, so we must assess our potentials against existing markets and focus our resources to encourage business build out in those areas for quick start-ups. In that context he said government must be flexible enough to adjust its enabling framework to facilitate business expansion as long as this framework can be justified on the basis that jobs will be created and the country will benefit.
A Pragmatic Approach
The investment minister said an aggressive investment strategy must be pragmatic and not restricted by the rigidity of any specific philosophical and ideological thinking. “An aggressive investment strategy geared towards job creation must be pragmatic and goal oriented” , he stated.