Sat | Mar 17, 2018

Letter of the Day | Investment disciple Lee-Chin must first be baptised

Published:Tuesday | May 31, 2016 | 12:00 AM


As the newly appointed growth czar, word has emerged that Michael Lee-Chin is appealing to the Jamaican diaspora to invest their money in Jamaica, where, he assures them, they will be rewarded with significant returns.

But while Mr Lee-Chin highlights energy/power generation and toll-road infrastructure as solid areas for diaspora investment money, some of us are left to wonder how come we have never seen Mr Lee-Chin venturing into any of these areas with his own money?

With a group of financial-service companies churning out in excess of $10 billion annually, I find it strange that Mr Lee-Chin and his companies can't find any other area in the Jamaican economy to invest than in the financial sector.

It was just recently that the group's managing director, Patrick Hylton, confidently informed investors that inorganic growth is a pivotal part of the group's growth strategy going forward. This emphasis by NCB on inorganic growth is reflected in its 30 per cent shares in JMMB, 30 per cent shares in Knutsford Express, 29.9 per cent shares in Guardian Holdings, and its much smaller holdings in a slew of other companies. The combined value of these investments amounts to several billions of dollars

Against the background of this one company committing so much of its resources to portfolio investments, we face the challenge to reconcile our minds to the fact that because of the absence of meaningful capital injection to assist it to modernise, the local agricultural sector can only sit and grudgingly watch as the tourism sector imports more than $19 billion worth of fruits and vegetables and meats.




Does the country have any idea what impact it would have on our GDP, our employment figures, and, significantly, our debt to GDP if Jamaican companies were able to supply the more than $70-billion worth of furniture and fixtures, along with the agricultural produce that the tourism sector purchases from overseas?

It is hard to believe that the country seems to have learned nothing from this heavy reliance on portfolio investments, which was a significant contributor to the financial meltdown in Jamaica in the 1990s.

So, how many more meltdowns do we need to go through before we begin to realise that the country's future will only be secured when we start to invest significantly more in local agriculture, agro-industry, manufacturing and export? These are the areas with the greatest needs for investment capital, and which provide the best opportunity for the country to put underdevelopment behind it.

Should we legislate?

Perhaps the time has come for Government to require of companies that earn a certain amount of profit to divert some of these mega profits into production and manufacturing. This would result in the creation of real wealth and a solid economic foundation for the nation.