Business Leaders-business environment-Jamaica

[Tuff Gong]

Business-friendly environment needed in Jamaic(sic)a

Al Edwards
Friday, September 01, 2006

Less bureaucracy, less taxation and a closer working relationship between the private sector and government was the resounding message coming from a forum hosted by the Jamaica Observer's chairman Gordon 'Butch' Stewart on Wednesday at the newspaper's Beechwood Avenue, Kingston headquarters.

Many of the country's leading private sector personalities said their businesses were increasingly faced with mounting obstacles created by a hostile business environment. They cited rising input costs, increasing security measures and high interest rates as prohibitive factors.

"This government has taken away the cajoles of the private sector and people have been reluctant to speak out. However, I sense recently that the tide is turning and business leaders are voicing their concerns."

Stewart, also chairman of the Sandals Resorts International - the country's leading tourism interest, said that his hotel operations in Jamaica is constantly hampered by bureaucratic roadblocks.

"Our Jamaican hotels are constantly having to contend with petty bureaucracy, which can take an inordinate amount of time to unravel. Whereas in the Caribbean you can pick up the telephone to the relevant persons and matters are corrected in many cases the very same day."

Gassan Azan, CEO of the Mega Mart chain of supermarkets said: "After 17 years in power, this government cannot be deemed to be friendly to the business community. Many of its policies and methods have resulted in many companies going to the wall. You only have to look at the state of downtown Kingston to see the neglect and abandonment of what was once a thriving business community to understand what I am talking about. Perhaps if Portia Simpson Miller gets a mandate from the people, things might change."

President and CEO of Pan Caribbean Financial Services, Donovan Perkins noted that the local banking sector had become very competitive.

"Interest rates are trending down and that can only be good for borrowers. I think we need to see non-financial sector companies posting improving profitability as an indication that the Jamaican economy is picking up."

Many of the business leaders bemoaned the decline of the manufacturing sector and called on the Government to be more supportive of the country's productive sector. The president of the Jamaica Manufacturer's Association, Doreen Frankson, has repeatedly said that the banks are particularly punitive to the sector as far as interest rates are concerned and that it was a major reason why people were not entering manufacturing.

Managing Director of NCB, Patrick Hylton said: "What we are seeing today is that Jamaica is increasingly turning to the services sector and that changes the paradigm. As such the banking sector has to respond accordingly. That is not to say that the productive sector no longer requires attention, but rather we are seeing a more diverse economy where businesses are focusing a lot more on consumer spending.

Many of the business leaders called on the Government to work closer with the private sector, particularly in the formulation and implementation of business policy decisions.
Chairman of the Guardsman Group of Companies Kenny Benjamin said: "Many people in Government have no idea of what you go through having to meet payroll every month.
They are not generally au fait with the dynamics of running a business so there is a disconnect and in many instances a distrust. The Government has to be more inclusive as far as the private sector is concerned and should go out of its way to solicit the opinions and thinking of the private sector on matters relating to business."

Observer's contributing editor Novia McDonald-Whyte said: "It is no good that the private sector is continually moaning that the government does not facilitate a better environment for businesses. It should be more pro-active and should want to engage the government. Business leaders should write more often in the papers, and voice issues in the media. The fact is, many of them just cannot be bothered and do not want to come off the fence. The many private sector bodies have simply not been the champions of the country's private sector, in fact, many of them are eunuchs and need to start coming off the fence."

The country's national debt now stands at just short of J$900 billion and continues to increase. Indeed the Government had set a ceiling of borrowing at J$39 billion for the first half of this year and in fact its borrowing for that period increased to J$51 billion. Many of the leading rating agencies have assigned Jamaica a "B+" rating, but say that that rating is constrained by a debt to GDP ratio of 130 per cent. The high debt burden they say, is a cause for concern and that Jamaica's saving grace is its timely payment of its debt obligations.

Earlier this week speculation was rife that the Minister of Finance Dr Omar Davies was on the verge of handing in his resignation due to increasing pressure on him to reschedule the country's debt payments. Davies is diametrically opposed to that idea and sees it as injurious to the economy and the country's standing on the international capital markets.

CEO of bill payment outfit Paymaster, Audrey Marks said: "As a country, we cannot continue to celebrate the receipt of debts from the international capital markets or from nations who choose to be benevolent, it only mires the country further into debt and makes it near impossible to get out of that cycle. Rather, we should be looking to grow and produce our way out of our present predicament."

Donovan Perkins countered that the Jamaican government had no problems raising financing and were now price makers rather than price takers.

All the country's leading business leaders agreed that their tax burden was astronomically high and that for companies to flourish a more equitable tax system was required for those who played by the rule. Kenny Benjamin said: "I recently paid a tax bill of J$100 million and was told 'not bad but you should have paid more.' A heavy tax burden just doesn't make for the right business environment."

Gassan Azan said, "rather than try to squeeze as much as they can from legitimate businesses, the Government should see what it could extract from the underground economy. Hard work and the running of a good business should not be overburdened with excessive taxes."

In seven months' time, the Cricket World Cup will be hosted in the Caribbean. Preparations are still underway, but the question remains: 'What will Jamaica get out of it'? The Observer's CEO Edward Khoury, who is also a member of the Jamaica Chamber of Commerce, said that a study was commissioned last year, which concluded that the event would cost US$100 million, but the country would only recoup some US$12 million. However, this year it looks like the country will receive even less revenue from the event.

Business leaders said that the event would prove challenging for the business community and that it was not yet unequivocally clear what benefits would be derived from it. There is practically no hotel space in the city of Kingston to accommodate guests from around the world and the fear is now that the Trelawny stadium will turn out to be a white elephant.

Butch Stewart said that many hotel rooms were already booked for the season putting more pressure on the authorities to house guests coming in from around the world.
Gassan Azan pointed out that to date no clear transportation policy was in place. With Jamaica on show to the world, the country cannot afford to let Cricket World Cup 2007 turn into a fiasco.

Digicel's Commercial Director Harry Smith said it was a poor indictment on the country when its business leaders are so hard on it.

"We at Digicel continue to do well in Jamaica despite all the so-called hardships for businesses. Guyana and Haiti are a lot worse than Jamaica and we are selling so many phones in those countries. We pay our staff well and take an interest in their well-being. We are very proud of that. What concerns me though is the funding of political parties. Instead of giving them huge sums of money which they can use to buy votes and guns, it would be better giving them in kind, such as free advertising space in the media."

http://www.jamaicaobserver.com/magazines...d_in_jamaic.asp

[Dr.Dudd]

Re: Business Leaders-business environment-Jamaica

JA dollar gains


Monday, September 04, 2006



THE stock market rallied last week, with all three market indices advancing. The advance to decline ratio was positive. Of the 33 stocks that traded, 17 advanced, eight declined and eight traded firm. The JSE Index gained 802.96 points (0.97 per cent) to close at 83,087.24 points. The Jamaica Select Index advanced by 21.79 points (1.00 per cent) to close at 2,200.61 points and the All Jamaican Composite climbed by 1,626.59 points (2.05 per cent) to close at 80,610.40 points.

Market volume was 47.5 million units valued at over $256.8 million. Mayberry Investments was the volume leader, trading 24.6 million units, followed by Kingston Wharves with 6.2 million units and Life of Jamaica Ltd trading 4.8 million units.

The securities with the largest percentage price appreciation were Courts, which gained 17.19 per cent - up $0.55 to close at $3.75; Seprod, which gained 11.61 per cent - up $1.56 to close at $15.00; and Mayberry Investments, which gained 11.11 per cent - up $0.20 to close at $2.00.

The securities with the largest price depreciation were Ciboney Group, which lost 16.67 per cent - down $0.01 to close at $0.05; GraceKennedy which lost 5.44 per cent - down $2.99 to close at $52.00; and DB&G Ltd which lost 5.00 per cent - down $0.80 to close at $15.20.

Foreign currency market
For the week ended 1st September 2006, the Jamaican dollar gained 11 cents. At the end of the week it took $65.90 to purchase each US dollar in the cambio market. The market was characterised by low to moderate broker demand and adequate supplies.

Money market
The money market was low to moderately liquid during the week with the 30-Day Dealer Rate closing the week trading at the Central Bank's reduced rate of 12.15 per cent per annum. In the overnight market, the rate closed the week trading at six per cent. The Central Bank cut the rates on all its open market instruments by 30 basis points on Friday.

Local company news
For the year ending June 30, 2006, Desnoes and Geddes recorded an after-tax profit of just over $2.2 billion. This figure was six per cent below the company's net profit for the year 2005. The reduced profit came despite an 11.5 per cent increase in net sales. Marketing expenditure grew by 20 per cent when compared to the year-end figure for 2005. General selling and administration expenses, however, inched up marginally by 1.4 per cent.

However, a one-off $406-million gain on the disposal of property, plant and equipment boosted the previous year's net profit.

Earnings per share for D&G's 2006 financial year were 78.74 cents, a 5.02 cents decline over 2005.

Local economic news
Tax revenues fell by $2.2 billion in July to register $13.8 billion. This brought total tax revenues to $58.2 billion for the first four months of fiscal year April to July 2006, just marginally short of the amount budgeted. On the expense side, recurrent expenses totalled $71.3 billion, approximately $1.6 billion inside the amount budgeted.

The fiscal deficit was $12.3 billion, $5 billion inside the amount forecast for the fiscal year to date. This was because the government cut back approximately $2 billion and $1 billion on capital expenditure and programmes, respectively.

The All TT Index lost 3.83 points this week to close at 1,103.89 points, while the T&T Composite Index lost 6.70 points to close at 874.83 points. The week's activities resulted from trading in 16 stocks, of which four advanced and 12 declined. Market volume was 1,385,504 units valued at just over TT$11 million.

Caribbean business news
According to the Trinidad Guardian, there have been calls for a delay in the building of the new aluminium smelter plant to be developed in Trinidad & Tobago. This comes following recent opposition to the plant's construction on environmental grounds. The Downtown Owners and Merchants Association (DOMA) has asked the government of Trinidad & Tobago to delay the plant's construction and instead focus its attention on the planned rapid rail system.

The DOMA said that the government needs to prioritise how it spends its money, adding that the rail system would have a greater impact on a wider cross-section of the population.
The association said that the development of the rapid rail service would reduce real estate prices by making it easier to live outside urban areas and commute to work.

Caribbean economic news
The Central Bank of Trinidad and Tobago has once again increased its overnight Repo rate by 25 basis points. This marks the eighth increase in the Repo rate for the year and brings the rate to 7.75 per cent, effective 25th of August. Core inflation for the 12-month period ended July was four per cent up from 3.35 per cent for the period ended June 2006.
The Central Bank is also concerned about the spread between their Repo rate and the US Fed Reserve rate.

Prepared by Today's Money Ltd for Jamaica Observer Ltd.


Talk Back

[Tuff Gong]

Re: Business Leaders-business environment-Jamaica


Productivity plunge - Study cites negative output over 30 years
published: Wednesday | September 6, 2006

Edmond Campbell, Senior News Coordinator

Jamaica has, on average, recorded negative productivity levels for more than three decades, eroding some of the gains achieved during the 1950s and immediate post-Independence period, according to the head of one of the largest corporations in the island.

Douglas Orane, chairman and chief executive officer (CEO) of Grace-Kennedy Limited, who made the observation, drew on a study conducted by Dr. Charles Douglas, executive director of the Jamaica Productivity Centre, which revealed that between 1970 and 2000, Jamaica's average annual labour productivity was -1.8 per cent.

He was speaking yesterday at the National Productivity Awareness Week organised by the Ministry of Labour and Social Security and the Jamaica Productivity Centre at the Jamaica Pegasus in New Kingston.

The study showed that, during the decade of the 1950s, the country's output per worker stood at an average annual rate of 8.4 per cent. This declined but remained positive at four per cent during the 1960s. However, the decade of the 1970s saw Jamaica's average annual labour productivity rate declining further to -0.4 per cent.

Dr. Douglas' research showed that the annual productivity rate slipped again during the decade of the 1980s to -0.7 per cent. This poor performance remained unchanged in the 1990s.

Leadership failed

Suggesting that this was an indictment on the various political administrations of the country, Mr. Orane said this dismal performance meant that "the leadership of our society has failed us and failed our people because all of our people want to be better off, but somehow we haven't been able to get our act together to get productivity moving in a way that other countries have done."

Mr. Orane argued that the country should learn from the mistakes made and chart a new way forward instead of engaging in a blame game.

He said that, since the year 2000, nothing has changed in terms of productivity output, noting that the country's economy has been growing at an average one per cent per annum while the population grew at a similar rate.

"It means that the growth in productivity for Jamaica is just about zero over the last several years," he added.

The GraceKennedy CEO said Jamaicans are increasingly migrating to countries where productivity is growing rapidly, including the United States, Canada and the Eastern Caribbean.

Commenting on the impact of the poor productivity levels, Mr. Orane said this lack of growth has affected the standard of living of all Jamaicans.

Turning to the industrial scene, Mr. Orane said several wage negotiations are not being pursued with productivity improvement as the underlying principle for wage and salary increases.

"We need to reverse this trend as wage and salary increase without the accompanying increases in productivity will lead to greater inflation, which in the end erodes the purchasing power of the workers who get increases and jeopardises the viability of the business, as well as the international competitiveness of Jamaica," the GraceKennedy CEO contended.

He proposed that rewards should be linked to productivity at every workplace.

"From this point onwards, every salary and wage settlement in Jamaica, whether individual or collective bargaining, ought to be productivity-linked," he added.

Productivity is a measure of how much is produced per unit of resources used in production. The transformation of economic resources (inputs) into output defines production.

Labour Productivity Across Decades from the 1950s -

Output per worker

Average Annual Rate 8.4 per cent


1960s - 4 per cent

1970s - 0.4 per cent

1980s - 0.7 per cent

1990s - 0.7 per cent

http://www.jamaica-gleaner.com/gleaner/20060906/lead/lead2.html

[Dr.Dudd]

Re: Business Leaders-business environment-Jamaica

The productivity rate of anycountry is the responsibillity of the productive sector.
If the private sector is theproductive sector,how can they blame the governments of the period for their lack of initiative to increase the productivity of theworkers.
it is not governments that decide rates of productivity in an economy. It is the private sector.
Why don't they for once take the responsibillity of their action?
One of the reason is that Jamaica does not really have a productive sector,. It has a speculative sector,masqurading as being productive.
How can the economy increase in productivity if they export al their profits to other economies to ioncrease their productivity.
But why would the so-called productive sector put out of play,the main tool to be utilized to increase productivity?
The simple reason is they really did not think that increase productivity was important? Thus the surprize,and years of ignorance about it.
HOW COULD THE 80'S during the PERIOD OF 'GREATEST IMPROVEMENT OF THE LOCAL ECONOMY,PRODUCTIVITY RATE COULD BE NEGATIVE GROWTH?
Jamaica's Productivity rate will not be improved by existing large local corporations,but by new fast growing institutions,that are aware of what it takes to improve productivity.
It will take those who have experienced workforce outside of Jamaica which are less hard working,and much more productive.
It takes the shift from the attitude of seeing workers as the enemy to one of realizing thatworkers are the most important inout in any business,and though a business can get ahead withouy every other factor. It can't do with out that most valuable.
One more thing productivity means upgrading equioment,not running workers like cattle,with primitive equipment,trying to achieve that which it was not designed to produce.

Pickaxe,forks,hoe and shovels should be banned,as tools in the country,as a first step.

[Tuff Gong]

Re: Business Leaders-business environment-Jamaica


Wed Sep 6, 2006
US based organization says Jamaica’s economic future is grim

The Washington based Council on Hemispheric Affairs (COHA) says Jamaica faces a somber future unless urgent steps are taken to correct its economic imbalances.

In a report released Wednesday it questions the country's economic policies in particular debt servicing and exchange rate policy.

It also calls for a greater emphasis on education.

The report goes on to suggest that Jamaica may be forced to follow Argentina by renouncing its debt to avoid going bankrupt.

The report was written by Michelle Sheckleford, a Jamaican who is an associate of the Council on Hemispheric Affairs.

“A lot of the macroeconomic policies that are being implemented so far, especially with regards to exchange rate devaluation, is a serious trade off because it hikes up the price of very essential imports such as oil and this makes a lot of stuff very very expensive,” said Michelle Sheckleford, a COHA research associate.

The Council on Hemispheric Affairs, which was founded in 1975, describes itself as an independent, non-profit, non-partisan, tax-exempt research and information organization.

http://www.radiojamaica.com/news/story.php?category=2&story=27976

[Dr.Dudd]

Re: Business Leaders-business environment-Jamaica

that is nothing more than a political organization masquarading as economic analysists.
Jamaica does not at present nor unless some catasthofic act happens have the problem that faced Argentina. argentina had no international reserve,the majority of it's debt was foreign based,and payments were overdue without the government being able to find the foreign exchange to pay it.
i suppose they including the Jafacan that is a member,think that they can influen ce the economy with false projection.
The sectors that drives Jamaican economy are not siusseptable to such primitive actions. they see right through them. These folks better come better than that.
bout education like we don't already know that education without oppertunities is not equal to migration of theeducated to developed countries!!
Jamaica needs education,but it need reliable irrigation more urgently. without whgich the economy will never be favourably developed.
Unless or until the land become as productive to the point where the population can generate savings from their labour,Jamaica will always be investing in education to supply those countries that has made their people earn enough to save.
It is noty enough to create minimum wage jobs,with people who are capable fo producingat 50 folds what they are earning. It is not enoughto have a very wealthy investor sector,unless the majority earns enough to satisfy the tax base because the unvestor class,will always use tax heaven to avoid opaying taxes as they do now and then create diversion with talk about government waste,so that the common man is fooled into thinking that that is the problem and not the true problem.

[Tuff Gong]

Re: Business Leaders-business environment-Jamaica

[ QUOTE ]
that is nothing more than a political organization masquarading as economic analysists.thinking that that is the problem and not the true problem.

[/ QUOTE ]

Thu Sep 7, 2006
It’s harder to do business in JA, says World Bank

Jamaica has suffered a decline in rating in the World Bank's 2006 survey on places in the world to do business.

The country is ranked 50th in this year's survey down from 48th place in 2005.

One hundred and seventy-five countries were surveyed.

According to the report, entrepreneurs have to go through six steps and wait an average eight days to launch a business in Jamaica.

The study looked at how effective countries were in removing bureaucratic obstacles to opening businesses as well as conducting imports and exports.

The private sector arm of the World Bank, the International Finance Corporation (IFC) published the report Wednesday after doing a survey on how easy it is to do business in the countries which were surveyed.

The IFC measured the time, cost and hassle for businesses to comply with legal and administrative requirements.

It found that the easiest country in the world in which to do business is Singapore, followed by New Zealand and the United States.

http://www.radiojamaica.com/news/story.php?category=5&story=27981