Ross Sheil and Rohan Cupid, Staff Reporters
Richard Byles (left), President and CEO of Life of Jamaica is greeted by Anthony Hall (centre), a director of the Rotary Club of Kingston, while club president, Andre Hylton looks on, at the Club's luncheon meeting at the Jamaica Pegasus Hotel on Thursday. - RICARDO MAKYN/STAFF PHOTOGRAPHER.
THE JAMAICAN economy is changing and investors will need to start investing in businesses rather than government paper, predicted Richard Byles, president and chief executive officer of Life of Jamaica.
The level of foreign direct investment and the fall in interest rates put Jamaica in a prime position for economic growth, he argued. What he referred to as "easy kills", buying government securities at high interest rates, was no longer so viable.
"Investors are going to find that they are going to invest in the real world, to open a business of some kind," Mr. Byles said. He was speaking at a luncheon meeting of the Kingston Rotary Club at New Kingston's Jamaica Pegasus hotel on Thursday.
The economy is poised for radical changes in the next five years, he said. It is entering its most favourable period for economic growth for 40 years with levels of investment unprecedented since the bauxite boom of the 1960s, he further added.
KEY AREAS
He singled out the growth in telecommunications and hotel construction as being key areas promoting growth. Spanish hotel groups Riu, Grupo Pinero and Iberostar are planning to construct up to 11,000 rooms over the next five years.
READ THE GAME
"Like a game of dominoes, you need to read the game in order to know what's really going on and that's the case for investment. It allows you to see the future with greater clarity," he stated. Over the last five years, "Jamaican assets have outperformed U.S. assets."
Macroeconomics indicators such as inflation, exchange rates, net international reserves, interest rates, the fiscal deficit and economic growth backed his belief, he said. "We may well enter a virtuous circle where interest rates fall and the deficit is fixed, the exchange rate remains stable and investment comes into the country. Growth engenders better fiscal management and on and on."
He said the Governor of the Bank of Jamaica, Derick Latibeaudiere, was also positive. Mr. Latibeaudiere announced in February that inflation for the March quarter would fall to between minus 0.8 per cent to positive 0.2 per cent compared to the 6.4 per cent recorded in the December 2004 quarter.
"I must say he doesn't stick his neck out very far," Mr. Byles said. "He's very conservative and when he makes a statement like that, he probably has very good reason to do so."
