Super merger gets thumbs up

Published: Wednesday | December 21, 2011 Comments 0

McPherse Thompson, Assistant Editor - Business

The proposed merger of three government agencies to create a mega-agency for investment promotion, financing and marketing has received the support of the Jamaica Manufacturers' Association (JMA) and the Jamaica Exporters' Association (JEA).

The Jamaica Labour Party (JLP) unveiled plans for the merger of the operations of Jampro, National Import-Export Bank of Jamaica (EXIM), and the Development Bank of Jamaica (DBJ) as part of its election manifesto released on Monday.

The idea is a slight diversion from the recommendations made by the Public Sector Transformation Unit and tabled in a Green Paper in Parliament in August 2010, that the DBJ, EXIM Bank and the Micro Investment Development Agency (MIDA) be amalgamated into one funding agency.

Both the JMA and JEA support the merger in a context where it would result in cost savings and/or efficiency gains, although the extent of those savings and/or gains has not yet been disclosed.

JMA president Brian Pengelley told Wednesday Business that he had not yet examined the issue in depth, "but we would support consolidation of entities where it would result in increased efficiencies".

He acknowledged that the unique focus of each of the organisations could get lost in a merger, "but it depends on how you structure it. If you structure the management team in such a way that we can get increased efficiencies from it, then we would certainly support it."

JEA president Vitus Evans has also supported the merger, albeit with a proviso that the current role played by the EXIM Bank in terms of providing financing be retained as a dominant focus in any new entity.

"It is difficult for me to say (whether it is a good or bad idea) without knowing which of the three" would play the leading role, given that they have different functions and different cultures, said Evans.

"EXIM has been very good in working with the JEA," he said, adding that the idea to merge the agencies was a good one, but it was not clear which direction they were likely to take.

However, he said they hoped that the EXIM Bank's approach to financing would continue to be dominant.

Joseph M. Matalon, president of the Private Sector Organisation of Jamaica, and his counterpart at the Jamaica Chamber of Commerce, Milton Samuda, were unavailable for comment.

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All three agencies proposed to be merged declined to comment.

Among the roles of the DBJ is to provide funding to key sectors, including tourism, agriculture and agro-processing, as well as productive enterprises, with specific emphasis on small and medium-sized businesses.

EXIM Bank focuses on financing businesses exports and imports.

JAMPRO was established in 1988 to stimulate, facilitate, and promote the development of trade and industry, and export and investment activities in all sectors of the island's economy. It drives this process through focus on a number of targeted sectors, including the creative industries incorporating film, music and entertainment. It also focuses on manufacturing, tourism, agri-business, information and communication technology, mining, and professional services.

mcpherse.thompson@gleanerjm.com

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