Jamaica unfriendly to business, says Azan

[Dr.Dudd]

Jamaica unfriendly to business, says Azan

By Julian Richardson
Sunday Obsever , June 11, 2006



Gassan Azan, the principal of MegaMart, and Bashco discount stores, has characterised Jamaica as one of the most difficult places in the world to do business, and urged the government to quickly address some of the obstacles facing entrepreneurs.

Azan told members of the Rotary Club of Kingston on Thursday that high taxation, and heavy-handed bureaucracy were among the factors impeding business development.


Gassan Azan, CEO of MegaMart and Bashco Trading Company, addresses the audience.
"The first reality which we must face is that despite all the efforts, Jamaica is still not open for business" he charged. "The bureaucracy is just too unfriendly and unnecessarily extends the time line for starting new businesses."

Azan, who three years ago led a group of entrepreneurs to spend hundreds of millions of dollars to open a second MegaMart store, cited a World Bank Report which concluded that Jamaican businesses were among the most heavily taxed in the world - paying 72 different form of taxes, which translate into 49.4 per cent of annual profit.

Citing the delay in opening a MegaMart store (slated for Montego Bay), Azan said the opening had to be pushed back to Christmas 2006 because of the difficulty in securing approvals from a range of government agencies.

The delay, he said, was despite the fact that the land was purchased from the state-owned Urban Development Corporation (UDC), with an approved development plan in place.

"As a matter of policy the UDC does not sell land without a proper development plan which outlines in detail what is proposed for the land in question," he said. "Hence, there can be no doubt that the development proposal conformed to planning policy."

He again cited government data to support his contention of unwieldy bureaucracy in the process of investment approval.
"The Ministry of Local Government reported that in the year 2000 'there was an estimated $3.5 billion worth of investment capital for local development awaiting approval for applications submitted'," said Azan. "I have no doubt that this figure has increased substantially. It must be clear that the present approval process does not facilitate the timely responses that are vital to the expansion of economic activity."

Azan was also critical of what he said was the high cost of doing business in Jamaica - with businesspersons burdened by regulatory requirements. This, he argued, was a factor behind Jamaica's lack of international competitiveness.

"Even at the regional level therefore, Jamaican businesses are finding it increasingly difficult to compete," declared Azan. "All indicators point to a future in which Jamaican businesses will increasingly lose market share in their own country, for while Jamaica is the biggest market in the English-speaking Caribbean, it is increasingly being dominated by our Caricom partners."

Azan who was nominated in 2000 for the Business Leader Award told the Rotarians that Jamaica's "cumbersome regulatory process," as well as heavy duty, contributed to the thriving black market and a "huge underground economy" - that imported more efficiently and with less difficulty than legitimate businesses.

"I would like to suggest that it is time for the government to assess the impact of its policies, and to determine whether or not more revenues would not be realised by a reduction of these prohibitive duties," he said. "I am convinced that such a move would bring more taxpayers into the net and substantially increase revenues for the government."

He added: "Any measure to increase these revenues should be welcome by the administration, since at the present levels they are woefully insufficient to pay the public sector wage bill and service the national debt."

Azan, in echoing the concerns of a number of corporate executives in recent times, outlined the impact of Jamaica's poor labour market on growth, describing the island's labour force as unproductive and unskilled, resulting from the "poor quality of the education system".

Jamaica has one of the lowest growth rates in the region, having averaged annual GDP growth of 1.4 per cent since 2000, a statistic which Azan said the private sector was willing to help change, if allowed to partner with the government.

"I think Jamaica is capable of far more than our present level of social and economic development," he said. "Our government can and should do much more to facilitate business, for only the private sector can generate economic growth at the rate required to satisfy the expectations of a growing population.

The steps we need to take wont cost us money. (The private sector) is ready to work with the government to achieve these objectives, but it is the responsibility of the government to lead."



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[Dr.Dudd]

Re: Jamaica unfriendly to business, says Azan

Dudd; who say they don't read Jamaican.com fora!!
Now if they will just use some of the valuable info given away here,every body will be better off. They will be richer,and the jamaican citizenry will be better off too.
the problem is that they are attempting to become billionaires,while their sourse of getting there gets poorer.
That is against every economic principle. You van only be as rich as your market is able to make you,and a poor consumerbase as you encourage,is equal to a weak purchasing power. That is what the touted regan economic 'miracle' missed. That is why the US economy is in a bubble. they weakened the purchasing power of their source of wealth. so now they have to keep the economy going by the use of Chinese savings invested in the US economy. If chinadecide to draw down their investments,the Us economy will slip into the biggest depression the economy ever see,unless they change the economic rules and pump money into the system to keep it going. That will hause the dollar to devalue to the point where Chines cheap goods become unaffordable.
That is a little applied economics in a nutshell.
about the low productivity of the Jamaican workers?/
That is the fault of th eprivate sector.
The secret to high productivity is not really education,but the abillity of the workers to learn,the negative which can never be truth fully stated about Jamaican workers.
The Jamaican education system is much more productive than the best of Us education system dollar for dollar.
That is to say that if the jamaican education system got equal finance of any US system it would produce a greater level of achievement as the latter.

One more thing,the most important i lefet for the last. Productivity is directly increased by the level of technology applied in an economy. jamaican workers only express low productivity in the Jamaican economy.every other situatuin wher eJamaican workers are employed,from the level of laborors,to executives,they have out performed their counterparts.
even in Jamaica with foreign operators,or local one sthat use foreign management strategy,like Sandals/Beaches and Ritz Carlton organization.
ever wonder whyb those leaders in their fields, use Jamaican trainers to train thier staff in so many other countries?

Let me get down to it. It is you who is the reason why the Jamaican workers are not productive. Yes you the business people, who hold them in disdain,who refuse to give them the technology that others in the field utilizes to increase productivity.
you seem to think that productivity can be achieved by the whip. No it is the result of the use of technology. You refuse to invest on appeopriate equipment,but you expect productivity levels comparitive to thos ewho do. them you blame the education and workers.
The most important thing the increasing productivity is managemnt's willingness to aquire appropriate technology amd workers that are easily trained. and Jamaican workers even those without the high school diploma are easily trained. they prove it in the US every day.

[evanovitch]

Re: Jamaica unfriendly to business, says Azan

wat happen...dem a try enforce collection of taxes... [img]/forums/images/graemlins/rolleyes.gif[/img]

muss be retroactive [img]/forums/images/graemlins/grin.gif[/img]

[mari]

Re: Jamaica unfriendly to business, says Azan

Isn't Azan a retailer, who imports and saturates the jamaican market with cheap asian products, thereby putting many local trademen out of work?

Isn't the high import taxes supposed to be a mean of reducing the amount of such products being brought into the country for resale?

What have the Azans ever done for Jamaica, other than open retail stores and employ a few people?

The only way Jamaica gets something out of them is through the import taxes. These people will not be satisfied until they suck the country dry. The small man who made pots for resale to feed his family has been run out of business. The only time dressmakers see money is at the beginning of the new school year, because nobody goes to dressmakers anymore, etc, etc. Why should someone repair shoes, when he can get cheap ones at Azans. Jamaica has become an import economy for basic things that used to be produced at home. Nobody wants local made things anymore. And why afterall, when they can get cheap imports from Azan und co.

Maybe they should think about getting involved in the productive sector. They would save on import taxes, and would at the same time be doing something tangible for Jamaica, while still lining their own pockets.