SPEECH TO JSE ANNUAL INVESTMENTS AND CAPITAL MARKETS CONFERENCE – Jan 25 2012
Jamaica asa Viable Place for Business
• The Honourable Dr Peter Phillips, Finance and Planning Minister
• Mr Donovan Perkins, Chairman of the Jamaica Stock Exchange
• Mrs. Marilyn Street Forrest – General Manager, Jamaica Stock Exchange
• Members of the Jamaica Stock Exchange
• Members of the media
• Ladies and gentlemen
Good Morning
I amvery pleased to be representing Digicel at this, the 7th Annual Jamaica Stock Exchange Investment and Capital Markets Conference.
Access to funds through efficient and transparent markets is the lifeblood of stimulating entrepreneurship and investment in any economy.
The JSE provides Jamaican companies with a crucial forum to raise capital and provides the local investment community with attractive investment opportunities that support local businesses, rather than funds being invested overseas.
Today’s conferencebrings together all those interested in not only the further expansion of the exchange but also those interested in business opportunities in Jamaica.
I have been asked to speak on the theme of Jamaica “as a viable place to do business”. Representing Digicel, one of the largest investors in Jamaica in recent years, I can say without doubt that Jamaica is not just viable, but is an extremely attractive place for both domestic companies to thrive and for international companies to invest.
Why?
With its proximity to the United States, Jamaica is ideally located for trading with the rest of the world.
Jamaica possesses an English-speaking, dedicated and productive workforce with highly skilled and well-educated individuals.
There exists a modern and sophisticated infrastructure, with 3 international airports, a major shipping port and an extensive highway and road network.
There exists an excellent telecoms infrastructure, with service providers offering 3G, 4G Broadband, international roaming, and connectivity to the rest of the world. Andthe telecoms landscape is set to explode once again with the launch of Digicel’s 4G Mobile only weeks away. Based on HSPA+ technology, 4G Mobile from Digicel is the next step in high speed mobile internet with speeds of up to 7 times faster than the standard legacy 3G technology.
Jamaica enjoys a stable business climate, with an outward-oriented and progressive regulatory environment across all sectors.
Jamaica also boasts solid democratic political institutions, with democratically elected Government officials every 5 years. Congratulations to the People’s National Party on their recent win in the general election. Early signs from the new administration are positive, which leads me nicely onto Jamaica’s economy.
Jamaica has an economy poised for growth!
The economy has stabilized over the last 18 months and the outlook is good. We saw GDP grow, albeit small, in 2011 and Jamaica is also forecast to show growth in 2012. Key areas of the economy like tourism and bauxite production both showed growth in 2011, and if the US economy avoids slipping back into a double-dip recession, then this bodes well for Jamaica and the wider Caribbean economy
The success of the Jamaica Debt exchange in 2010 has helped relieve some of the pressure of the country’s debt burden, and gives the government breathing space to make the reforms necessary to improve competitiveness and bring the country’s finance’s under control.
The JDX also brought a welcome end to the sliding Jamaican Dollar. The new administration’s clear commitment to sound economic management is to be welcomed and should stabilise any potential for a weakening in Jamaica’s foreign exchange position.
It was also good to hear that the new Government is not only planning to continue economic stability but is also focused on driving growth in the economy. In recent statements, Finance and Planning Minister, the Honourable Dr Peter Phillips, assuredbusinesses that the Government will not be pursuing a policy of high interest rates. As the Minister stated at yesterday’s PSOJ breakfast (and again this morning), “There is no policy of high interest rates and there will be no policy of high interest rates.”This bodes well for enhanced economic activity.
The government is verycommitted to supporting investment opportunities in manufacturing, logistics, ICT, shipping, tourism, entertainment, sports, energy and agriculture, and I know JAMPRO is very focused on driving and supporting these type of investments in Jamaica this year.
And with energy and Information and Communication Technology (ICT) being singled out as overarching sectors to drive economic growth, this is also good news for Jamaica as there is a clear correlation between progress on developing technology infrastructure and strong economic growth.
In fact, a recent study by consulting firm McKinsey estimates that just one action—bringing mobile broadband levels in emerging markets up to those of more mature markets—could add between 300 and 420 billion US Dollars to the world’s GDP and 10 to 14 million direct and indirect jobs in areas such as equipment manufacturing and outsourcing service. And with the upcoming launch of 4G mobile with 80% population coverage at launch, mobile broadband is set to increase, which will in itself drive further economic growth in Jamaica.
We can also be reassured by the Government’s confirmation that tax reform is of paramount importance to fiscal sustainability, economic growth and improved social services. The proposed tax reforms include the broadening of the tax net and the revamping of the incentives regime as a tool to stimulate growth.
I touched on Jamaica’s proximity to the US, its educated workforce, the infrastructure and the regulatory environment earlier, but I’d like to touch on some key socio economic factors that will help attract further investment in Jamaica.
· We have seen major strides in the area of crime with statistics for 2011 showing a significant reduction in most major crimes and close to 50% in some areas.
· Jamaica also boasts 2 of the largest universities in the Caribbean, University of the West Indies and the University of Technology. In addition, Jamaica is also home to Universities from the United States, University of New Orleans and Florida State University – all of which have significantly boosted the profile of the Jamaican workforce. Digicel is a great example of the talent that exists in Jamaica with over 1,000 Jamaican employees (many of whom are graduates of these universities) serving our 2 million customers 24/7.
· The well-managed and secure shipping port in Kingston has the 7th largest natural harbour and 2nd largest in Western Hemisphere. The world class port facilities include 130 hectares; capacity for 2.8 million TEUs (twenty-foot equivalent units); 19 Gantry cranes; 50 straddle carriers and 500,000 square feet in warehouse space. And with the Port Authority of Jamaica preparing for an expected increase in business from the Panama Canal, the future is very bright for the Port in Kingston.
· We have two international airports at each end of the island, both of which are continually improved to remain abreast of the industry trends and international security standards and protocols, specifically with the addition of two new VIP lounges in both Kingston and Montego Bay servicing the needs of the business community. You’ll note that Digicel has provided Business Centres for both lounges.
· Jamaica also has one of the newest and most efficient road and highway networks in the Caribbean region, which facilitates safe, speedy and cost-effective ground transportation.
· While I have only touched on a few, in essence, the socio economic indicators and the current infrastructure, including the vibrant telecoms sector,all bode well for future growth and investment in Jamaica.
With the climate primed for foreign direct investment, it is critical that current investors continue to invest to ensure economic growth for Jamaica. For example, Digicel is investing a further US$30million in our 4G mobile network rollout on top of our US$1billion investment in Jamaica to date. In addition, our US$60 million investment in our new group headquarters in downtown Kingston is testament to the climate that currently exists for investment in Jamaica.
This leads me nicely into speaking of Digicel’sinvestment experiencein Jamaica, which is probably one of the best case studies of the last eleven years. As you know, Digicel launched in April 2001. In almost 11 years, we have consistently invested in our business here – and today are proud to serve over two million customers. During that period, mobile phone penetration has gone from as low as 10% in a population of 2.8million to 114% today.
Born and bred in Jamaica in 2001, Digicel has expanded rapidly to now be in 31 markets across the Caribbean, Central America and the Pacific. And everywhere we go, our Jamaican colleagues are a key part of our success – taking the Digicel DNA to countries and customers across the globe.
During this period, jobs have been created both directly and indirectly for thousands of Jamaicans – some of whom have become change leaders across the Caribbean in other Digicel operations thanks to Jamaica’s highly skilled and professional workforce.
As an investor, we continue to supportthe Government of Jamaica and Jamaican businesses. In fact, Digicel is one of the largest tax payers on the island while over 70% of procurement orders we make in Jamaica are with local suppliers.
Digicel has continued to raise the standards when it comes to telecommunications. We have invested heavily in our people and in our network to ensure we deliver the best value, best service and best network to all our customers. Our technological advancements in ICT (particularly our Cloud services) and in 4G broadband have allowed companies to drive efficiencies into their businesses while cutting costs. The upcoming launch of 4G mobile will drive even further efficiencies into businesses across Jamaica.
In addition, as we invest in our business we also invest in the communities in which we work and the Digicel Foundation’sinvestment of over US$13 million to date, in 206 projects in the areas of education, sports, community and environment is testament to this.
Looking ahead, you mayask, where is Jamaica headed?
Jamaica is poised for growth in sectors such as manufacturing, technology/ICT, agriculture and tourism throughareas such as:
1. Alternative and renewable energy with the new policies aiming to reduce dependence on fossil fuel through incentives such as the establishment of Energy Plants for Liquefied Natural Gas, Waste, Wind and Solar.
2. The Downtown Kingston Redevelopmentwhich has been designated a Resort City to include a Cruise Ship Pier; a casino; Hotels; Retail andCommercial properties, and mixed income housing.
3. The Caymanas economic free zonewhich boasts 1,500 acres of prime real estate iswell placed to support ICT.
And 4. The International Financial Services Centre. A recent study by Baker & McKenzie indicates that Jamaica is well suited to be niche player in International Financial Services in the areas of International Holding Companies; International Trust Services (including Private Trust Companies); Corporate Management Services and Professional Management Support Services to other jurisdictions
In addition the government has introduced a range of targeted tax reliefs and incentives that will play an important role in attracting overseas investors, ensuring Jamaica is competitively placed relative to other islands in the Caribbean as companies decide where to locate their new venture.
It’s important to say that the Jamaican Government is always very encouraging and supportive of foreign direct investment – we have always had and continue to have a great relationship with the Government of Jamaica.
In closing, Jamaica has a rich culture and heritage and people identify withJamaica the world over. Brand Jamaica has never been stronger. Jamaica is Digicel’s home and we are proud to call it so – for potential investors it is worth noting before Jamaica, there was no Digicel. The Jamaican people have embraced Digicel and supported us tremendously in everything we do – and for that we are very grateful.
The changes we have seen in Jamaica are positive and with GDP set to continue increasing, the outlook for Jamaica is bright – which is in contrast to many countries across the globe.
My advice to investors who are looking at Jamaica as an investment option is to go for it because the experience is a fantastic one, the people are great and the opportunities are considerable. Jamaica has huge potential and is a great place to do business.
For us, it has been – and continues to be – a fantastic experience.
Jamaica is ready for business, Come join us.
