Business persons, academia discuss economic crisis
A CROSS section of business persons and academia, including former Prime Minister, Edward Seaga, on Saturday discussed Jamaica's coming out of the current economic crisis.
Keynote presenter at the Spanish Court/Mona School of Business 'Kingston 360 Breakfast Talk Series', Dr Peter Blair Henry, suggested that in Jamaica, over the past 35 years, the key factors that drive the country's Gross Domestic Product (GDP) had been negative.
"Capital, labour, and intangibles are the factors that drive GDP," he stated. In Jamaica, he added, labour has declined steadily, the intangibles have been negative, and productivity has declined by 0.17 per cent.
Noting that despite investment, Jamaica has not been growing, he suggested that effectiveness in deploying capital has been declining. There has also been negative growth in what he termed the 'intangibles' of innovation, ideas and policy.
Doing business in Jamaica
Dr Henry said: It is not easy to do business in Jamaica, adding that it was hard to secure capital for small businesses, which are the entities that drive productivity. He noted that, these factors, combined with the difficulties being experienced with taxes, all serve to stifle innovation
Meanwhile, Seaga suggested that investments should induce savings, to produce the capital that is needed. Our targets, he said are based on the level of return. He also suggested that China like Jamaica, had the same problem; that of people. We need, he said labour-intensive industry, and that was what gave Jamaica growth in the 1980s, along with the pegging of the exchange rate.
Seaga also suggested that in assessing investments, one needs to look carefully on how much of the proceeds actually remain here. The former prime minister said, we only retain 33 per cent of tourism investment, noting that US$500 million of from our Foreign Direct Investments some leaves the island.
He, however, noted that the inflow from remittances was significant.
Other suggestions from the audience included 'picking industries' for focus, arresting the 'brain drain,' (as 60-80 per cent of our graduates migrate), and establishing a viable venture capital fund to foster the growth of small businesses.