Jamaica is ripe for investment opportunity picking. The government is banking on the diaspora to take advantage of the many opportunities to build wealth and strengthen the country’s economic prospects. This was the theme of a town hall meeting on investment and trade opportunities in Jamaica held at the Miramar City Hall on Tuesday.
About 100 people attended the forum. Another 40 tuned in online to hear Shane Angus, JAMPRO’s manager North America regional office, and David Mullings, deputy chairman of Mahoe Partners, speak about opportunities in the country and how to take advantage. Presentations were also made by Phillip Rose, regional director of the Jamaica Tourist Board, Abebe Lewis of ALMBG, and Raine Jarret, Professor of Social & Behavioral Science, who spoke on mindfulness.
According to Angus, there are many opportunities for investment in Jamaica. These include infrastructure, location, manufacturing, agriculture, energy, logistics, business process outsourcing (BPO), and tourism, to name a few.
JAMPRO, the government’s investment promotion agency, provides a one-stop shop to help investors and businesses understand, navigate, set up, and run their operations within the regulatory framework. These services to help investors are free and can be provided within 24 hours, three days, or one week, depending on what is needed. Jamaica is currently ranked 71 of 190 countries for doing business and sixth for starting a business.
Six “Unique advantages.”
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Angus gave six reasons he considered “unique advantages” why Jamaica is the right place for business investors. He said Jamaica is cost-competitive with a highly trained labor force. The country has the third-largest population of English speakers outside of Canada and the USA in this part of the world. Jamaica also has proximity to markets, exposure to all the major markets, and connectivity to markets with flights. It is well-positioned to be one of the best locations for doing business with its rankings.
BPO Opportunities
Jamaica’s BPO industry is expected to grow with employment to around 55,000 persons in the next two years. This is expected to create opportunities in commercial and residential real estate, transportation, food services, training, and professional services.
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Tourism Opportunities
Tourism opportunities are centered on community tourism, ecotourism, medical tourism, and boutique hotels which he said are “low hanging fruits” as the entry requirements are easier than others.
“When people hear about tourism, they think of a billion dollars to put up a hotel on the beach. But tourism has evolved. Community tourism is one of the biggest things we are seeing now. Communities such as Treasure Beach would have evolved because of community tourism. Europeans want to come in and stay in a little house in the countryside for a few weeks and integrate into the community,” the JAMPRO executive said. “If you have houses locked up in Jamaica, you can take advantage of the opportunities in this industry,” he noted.
Opportunities in Agriculture
One of the critical areas of opportunity mentioned was agriculture. This sector allows investors and businesses to take advantage of local, tourism, and export markets. Roots and tubers have an untapped potential of US$12M for the USA, Canada, and the UK – this includes yam, sweet potato, and cassava.
Papaya exported to the USA, Canada, and the UK was valued at over US$4.5M, with Canada accounting for US$2.5M. Crustaceans, including Rock Lobster Tail and frozen whole lobster, have also registered increased demand. Global lobster demand is growing at four percent per annum. Potential export opportunities exist for the USA and Canada.
Mr. Angus told the potential investors that the trend now in food production is aggrotech. “Persons are now investing heavily in greenhouses and smart farms. This creates a lot of opportunities, so even though you may be an office person, you can be a farmer as well.”
Agriculture helps in Jamaica’s import substitution, which helps to reduce the island’s import bill and use of its foreign exchange.
Agriculture also provides opportunities for distributors in foreign markets. With about a million Jamaicans living in the United States, there is a good market for Jamaican products. “The person who consumes Jamaican products are the Caribbean diaspora and other ethnic groups living among Jamaicans. When you add the diaspora population in Canada and the UK, investors can take advantage of the opportunities in consolidation and exports while others can benefit from import and distribution,” he noted.
One of the biggest challenges facing farmers in Jamaica is the storage of produce when a glut exists in the market. “Farmers will tell you that up to 60 or 70 percent of what they produce is wasted when there is a glut on the market because there is nowhere to store them,” said Angus. As a result, he said opportunities exist for investment in cold storage facilities to satisfy the demand.
Jamaica has a solution for those who want to invest in agriculture but are prohibited by access to land. The Agriculture Investment Corporation (AIC) has a program with 1,000 acres of arable land. The agency seeks 20 farmers to take 50 acres each to plant mangoes. This mango park will have a processing facility to ensure quick export to the different markets.
Energy Sector Opportunities
Currently, the government of Jamaica has a program to transfer energy usage from the Jamaica Public Service Company into renewable energy through the Integrated Resource Plan (IRP). The plan will allow businesses to sell back power to the grid via solar, wind, or hydro. Investors are invited to share how they plan to become part of this program to make Jamaica more energy efficient.
Stock ownership in Jamaica
If you are looking to go the route of stock ownership, Mr. Mullings gave an overview of Jamaica’s investment opportunities and climate. He spoke about the three ways to invest in Jamaican businesses; private companies, public companies, or lending money to companies.
“Persons should be excited to invest in Jamaica,” he said. He referenced a Bloomberg article that says Jamaica was the best performing stock exchange in the world for five years, 2013 to 2018. “People know Jamaica for sun, sea, sand, sports, and music. They haven’t thought about Jamaica from the investment side. We have to change their perception.” He quoted his mentor Michael Lee-Chin, whose view is that: “You look for three things to get excited about investing in a country or region. The first is that there needs to be a difference between perception and reality. The second thing is that inefficiency must be present. The third thing is that there should be a lack of equity capital flowing into the region.”
According to Mullings, the perception is that the Caribbean is a group of small islands with small markets and, therefore, small opportunities. “The reality is that there is money being made in Jamaica. Foreigners are coming to Jamaica and making money. A lot of us in the diaspora are left out of that.”
He cautioned that there is inefficiency present in Jamaica and many other developing countries and emerging markets. “The plan is to invest in something that solves problems. If there is a problem, then there is inefficiency.”
Regarding equity capital, he mentioned two of Jamaica’s largest initial public offers (IPO) where Jamaican nationals could buy into public companies. These were the Jamaican highway and the wind farm projects. These he noted are notable examples showing that Jamaica is a friendly equity-financing country.
For the Diaspora
He said If the diaspora wants to talk about having a positive economic impact in Jamaica, the country needs to have good-paying jobs. He recommends investment in companies raising money to expand, which allows them to pay better.
He pointed out that the diaspora is a significant source of potential capital that sends US$3 billion in remittances per year, which indicates that investment funds are available.
Among the things that make Jamaica great for investment, Mr. Mullings said Jamaica is extremely capital friendly. “Getting your money into the country is easy; converting it back to US dollars when you want to get it out is also quite easy. We have access to US dollars from a liquidity standpoint.”
He continued: “Jamaica is the de facto regional stock exchange which allows companies to cross-list, thereby giving access to other investment opportunities in the region. Jamaica’s location is positioning us to become a major financial powerhouse. Jamaica is not like Cayman, where outside funds exist, and you have 40,000 funds in one building, and the money doesn’t stay in the country. Jamaica can attract capital that can stay [and] grow.”
Investment Confidence
Philip Rose spoke about the confidence shown in brand Jamaica. This, he said, has resulted in 90 percent of planned tourism investments being kept on track, with 4,800 additional rooms by the end of 2023 and related development opportunities. “In March of 2020, everything came to a grinding halt globally. We did not sit on our hands. We pulled in partners and stakeholders to create the resilient corridor and other aspects of the “Jamaica Cares” program. We were able to open in June of 2020.”
He said the projection for visitor arrivals to Jamaica was 1.5 million by the end of 2021, and the figures at the end of November showed 1.3 million. “We are still counting December’s numbers, but I have no doubt that we will achieve the target.”
This confidence by visitors and the travel industry has given rise to confidence by international investors, he said. “This shows that the investment climate in Jamaica is really good at this time.” He noted that Amadeus, a leading travel technology company, recently informed them that Jamaica leads the world in demand and airlift recovery. “This demand will cause an increase in demand for more goods and services, which will require an increase in supply,” he contended.
Success Reaped
Consul General for the Southern United States, Oliver Mair, who spearheaded the town hall, was incredibly pleased with the outcome of the meeting. “We were happy to engage in person with the community with our Investment Business forum. The feedback has been excellent. We had about 100 persons in attendance, excluding the virtual audience. We already have over 20 persons who have reached out with inquiries about taking a further step to invest/engage with Jamaica,” he said.
The consul general said they would stage a similar investment opportunity forum every quarter going forward.
