Aubyn Hill, Financial Gleaner Columnist
WHEN A country like Jamaica is under severe economic pressure and confirmed recession, when its brutal crimes reside in the madness spectrum, and its poor are suffering from visible hunger, we tend to think that our politicians can do very little without outside help and cash from overseas.
That is not true.
The Government of Jamaica (GOJ) has two powerful scalpels for economic growth - legislation and regulations (legs and regs). Used skilfully and driven intelligently by accountable managers with autonomy and authority, these scalpels can create economic growth in difficult circumstances.
We spend about US$2 billion annually on the importation of oil. The National Water Commission (NWC) is possibly the single largest customer of Jamaica Public Service Company (JPS).
We spend a lot of money to buy JPS's energy to pump water. And every year, we waste millions of gallons of water from our roofs.
The GOJ needs to legislate that every town house development, every complex of single-family homes, small and large, every single house that has a roof of a certain small minimum size must have a guttering system and a catchment pond or equivalent container.
The new legislation must require mortgage and other lenders who finance house buyers to include the water fixtures in their mortgages, and mortgages will not be given without these water systems on the property.
Think of the employment boost that will come to craftsmen and women to build and install gutters, as well as catchment tanks.
There must be a twin to this water-harvesting legislation. We must legislate that each new house must have a minimum renewable-energy component. In Israel and Barbados, most every house has a solar water heater. Full disclosure: I chair a solar systems company.
We do crazy things in Jamaica. Last year, the Jamaica Labour Party (JLP) government dropped the duty on SUVs so that the well-to-do can buy more of them and the country buys more oil for them to guzzle. At the same time, the Government did little or nothing about some CARICOM agreement that forced Jamaica to raise its duty on renewable-energy equipment from five per cent to 20 per cent.
Imagine the kind of employment increase that would occur if we were to legislate and properly monitor the twin legislation/ regulation.
Make it that the NWC pumps must run on renewable energy and incorporate a privatisation aspect to provide financing for new equipment for the cash-strapped NWC and we could make a very significant dent in our energy bill.
We would still use JPS, since these solar power systems would be grid-tied. The GOJ would not have to borrow money for these changes. Even the IMF and other multilateral lenders would support these well-thought-out, cohesive, transparent, non-bureaucratic and efficiently implement legislative changes.
Minister Paulwell has been a champion of sensible changes to our fossil fuel and renewable-energy regimes. His interest in bringing down our energy bill and fostering employment should cause him to coordinate with his Cabinet colleague in charge of water and employ their unused scalpels to trigger economic growth in the vital energy and water sectors.
INVITE THE RICH, PETS TOO
France's Socialist president François Hollande has stuck it to the rich in France with a 75 per cent tax on earnings over €1 million (US$1.3m), a 62.21 per cent marginal tax rate on the sale of shares, and the increase of the previous top bracket of 41 per cent on earnings over €72,000 (not terribly rich persons) to 45 per cent.
Rich businessmen and young entrepreneurs are running from France. Mr Hollande has given Jamaica a great opportunity. Here is how.
France and many European countries do not tax by citizenship but by residence. If a tax is paid to the country of residence, then the French citizen does not have to pay in France. Frenchmen will likely be followed by rich Greeks and Spaniards as those nations raise their taxes to fix massive fiscal imbalances and pay off their enormous debts.
Jamaica should institute a system whereby fit and proper foreigners could invest, say, US$1.5 million in a Jamaican residential property, employ a minimum of three Jamaicans with NHT, PAYE and other social coverage, invest a minimum of US$250,000 in GOJ bonds and pay an annual tax of US$200,000.
In exchange, each approved applicant would receive a special Jamaican resident visa and an annual tax payment certificate to submit to his or her country of citizenship. Today, those tax refugees preferred destina-tions are London, New York, Geneva, Canada, Israel and Singapore.
Jamaica's package could include special immigration and airport services, as well as express land titling and ownership arrangements.
It would not be unique to offer this invitation and service. Therefore, our offer would have to be attractive, welcoming and our service efficient.
Prime Minister David Cameron of Britain is reported to have angered the French in June when he said he would "roll out the red carpet" to wealthy French citizens and firms who wanted to move out and pay their taxes in Britain. We hope not to anger anyone, but we should roll out our own red carpets of hospitality and residential welcome to some of these European wealthy investors and taxpayers.
These rich people love to travel with their pets, especially their dogs. There is another piece of legislation ready and waiting for passage that would allow dogs to enter Jamaica more easily than they can today without exposing the country to increased risk of rabies.
Minister Roger Clarke needs to get this approved by Parliament in order to assist Minister Phillips to invite and secure more wealthy foreign taxpayers to Jamaica.
Aubyn Hill is the CEO of Corporate Strategies Limited and was an international banker for more than 25 years. email@example.com