More State Assets to be Divested

Photo: Yhomo Hutchinson Prime Minister, the Most Hon. Andrew Holness (left), addresses the opening ceremony for the Jamaica Stock Exchange (JSE) 12th Regional Investments and Capital Markets Seminar at The Jamaica Pegasus hotel in New Kingston on January 24. Seated (from left) are: JSE General Manager, Marlene Street Forrest; Chairman, Ian McNaughton; and Managing Director of the United States investment firm, Jefferies, Gregory Fisher.

Story Highlights

  • Prime Minister, the Most Hon. Andrew Holness, says the Government is committed to divesting more State assets, in order to facilitate increased investments that yield greater levels of economic growth.
  • Among these, he said, are the Urban Development Corporation (UDC) and Factories Corporation of Jamaica (FCJ), which have combined assets totalling $100 billion.
  • He contended that “just having them there on the balance sheets, saying that you are investing in Government paper, does not generate economic growth nor create jobs.”

Prime Minister, the Most Hon. Andrew Holness, says the Government is committed to divesting more State assets, in order to facilitate increased investments that yield greater levels of economic growth.

The Prime Minister was delivering the keynote address at the opening of the 12th Jamaica Stock Exchange (JSE) Regional Investments and Capital Markets Conference at The Jamaica Pegasus hotel in New Kingston on January 24.

Mr. Holness noted that there are several State entities with significant assets, which are “not generating much.”

Among these, he said, are the Urban Development Corporation (UDC) and Factories Corporation of Jamaica (FCJ), which have combined assets totalling $100 billion.

“When you talk to the people who are in those organisations, you sometimes get the sense that the objective is to keep the asset base high rather than utilise it. And, you could go through several (other) public companies and agencies…and you would see that they strive to keep fairly high assets…but to what end,” Mr. Holness said.

He contended that “just having them there on the balance sheets, saying that you are investing in Government paper, does not generate economic growth nor create jobs.”

Mr. Holness said there are also entities which are not loss-making assets, such as the National Water Commission (NWC) and Passport, Immigration and Citizenship Agency (PICA), for which there are stakeholder reservations to their privatisation, “because (they are) making money.”

The Prime Minister said the concerns relate to whether or not this would affect the extent to which users, particularly the society’s marginalised, are able to benefit as regards access and cost.

Mr. Holness is proposing that the regulatory arm of the Government be strengthened, so that it can divest itself of assets to the private sector.

“What we have seen around the world is that when the private sector is properly regulated and properly incentivised…in an environment where the rule of law is certain, the competition drives prices down,” he argued.

“So, if you really want to (maintain) a low water rate, faster passport office, better examinations for your car, then some of these functions really ought to be placed in the private sector with a strong regulatory environment,” Mr. Holness added.

The three-day conference is being held from January 24 to 26 under the theme: ‘Global Investment Horizon: Our Options and Our Future’.

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