Please see the full text of Mrs. Street Forrest; General Manager of the JSE, presentation.
Ladies and Gentlemen, we are pleased to see you all at this, the opening night of our Eighth Regional Conference on Investments & the Capital Markets. The Jamaica Stock Exchange is pleased and honoured to host this event in collaboration with our lead sponsors: Oppenheimer and Co. Inc., Television Jamaica Limited; The Jamaica Observer, Ernst & Young, Digicel, along with all the other sponsors that have continued to support this worthy event over the years.
Our objectives of the Conference this year are:
Conference Objectives:
1. To bring together key participants of the financial services industry;
2. To explore and develop ideas and issues pertinent to the development of the capital market;
3. To provide a platform for the development of strategies necessary for the future growth of the sector in the region;
4. To assist in the creation of partnerships and improved understanding between financial institutions to allow for the generation of investment opportunities;
5. To showcase industry trends, products and services;
6. To highlight the importance of the capital market to the economic development and prosperity of the region;
7. To build social and strategic alliances; and most importantly
8. To energize participants to move from discussions to action.
This year’s Conference focuses on “Social Change as a Catalyst for Investment, Growth & Development”. This theme recognizes that regionally and internationally there is an urgent cry for growth and development in our region and that it is through investment that changes will be achieved. However, critically underpinning our success are the changes that we must make to our social fabric. In small island nations like ours, there is a symbiotic relationship between our people; how and where they live; how educated they are; their commitment to family and country and how they relate to each other. In turn, how we live with each other directly impacts the level and types of investments that we can attract as a region. Somewhat paradoxically, the wealth and progress of our people can only be fostered through our investment in them; investments in how and where they live; in education; in family and in community.
Since our problem by and large starts with us, not through talk but through our actions, the solutions will not be through talk but through our own actions. There are bright minds in the financial sector that have overseen considerable investment in paper and in a raft of products from fixed income securities to equities and commodities. These investments are commendable, as they have assisted our governments in meeting their liquidity needs and have kept the wheels of business turning while allowing investors to receive reasonable returns on their investments.
Can we however stop for a minute to recognize that these returns could be multiplied within our region, if instead of only picking the low hanging fruit of great returns, the long term sustainability of our people and by extension our region was secured by targeting our financial minds and resources towards restoring a productive focus in each community? Of course this would be harder than “vanilla” investing, but isn’t it absolutely clear that this social change is needed for sustainable growth and development, without which there will be little point to moving money around? There will never be a perfect time, nor will there ever be a perfect solution, nor do we have the time for the most detailed project plan. What prevents us from “whistling and riding” right now towards a system where, instead of the perennially inadequate injection of funds into the Student Loan Bureau, we establish a Student Loan Company as along the lines of a Sallie Mae, which is currently listed on the Nasdaq Exchange.
Sallie Mae, which is privately run, is the single largest global entity that originates services and collects student loans. The Company employs over 6,600 people and boasts a healthy net profit, while facilitating increased access to education and a more educated US workforce. I would ask you to think about it: Is our current model working well or would a Sallie Mae model work well? If access and funding for education is such an important driver for the changing of our fortunes, why have we shied away from making necessary changes for so long?
It has been convincingly argued that rising and increasingly visible income inequality was an important factor in the financial crisis and in causing worldwide backlashes such as the “Occupy Wall Street” movement. The financial sector must play a significant role in the reduction of this variable. While our governments may reduce the extremes of income equality by providing a social safety net for the poorest among us and have a short-term impact by spending to create temporary employment opportunities, developing countries such as ours cannot afford the sustained high level of expenditure necessary to create the impact that is needed. The challenge is therefore for this industry to mobilize the capital needed to finance development and act as one of the agents in socially responsible income re-distribution.
Bill Gates recently stated that the private sector underinvests in innovation because ‘investors’ – those taking the risk- receive only a small portion of the returns.’ It is an imperative for both government and the private sector, including those of us in the financial community, to take the long view. While we acknowledge the many philanthropic deeds of many of our companies, I posit that we need to expand and embrace a term coined by Bill Gates: ‘catalytic philanthropy’, which increases the odds of investments in and finding new solutions to any given social problem. The social changes brought about by these solutions become a catalyst for investment growth and development.
Many of the countries in the region are not as big as New York City (NYC), which understands that social changes are the catalysts for growth and development. NYC is experimenting with creative financing to solve social problems – ‘financing that not only measures but depends on results.’ Goldman Sachs has invested in a ‘social impact bond’ that is required to achieve a certain measurable social outcome. If it is successful not only will the investment firm profit, so will New York City. These initiatives reflect a new way of thinking, a recognition that the engine that is investment, when bolted unto a watertight and supportive social fabric, will allow both the dingy and the luxury yacht to not only float, but power confidently to shore.
In order to properly respond to the urgency of the situation and address the priorities that are demanding of our attention, this year’s conference will examine issues that are so critical to our survival that it would be remiss of us not to have an understanding of them and how they impact on us individually, our businesses and our economies. We seek to put on display some of the many projects and plans that we have been discussing as most likely to move our region forward. We understand there will be more talk but we expect that if those with the ideas are within the same venue as those who can finance the ideas, the results will be positively explosive. It is imperative that we move talk into action.
Regional food safety; the climate for ensuring viability for businesses; converting our strengths into economic stability; regulating the capital markets and stimulating entrepreneurship are just a few areas we will explore. These discussions should help us as a region to position ourselves to take advantage of the opportunities before us.
Over the next two days, we should as presenters and participants explore how we can be the drivers of the change we so badly need to spur our development and growth. How we can as a region re-lay the foundation for growth and see the opportunities that others see, but we so often miss. Whether or not we can or cannot do without a standby agreement from the IMF is not the discussion that we should be having. The discussions should be on identifying areas of growth, community by community and earmarking the necessary manpower and financial resources to funnel these developments. It is expected that we will speak honestly about the issues that retard our development and ways in which these can be overcome. We know that opportunities will present themselves from examining issues such as:
a) The Transformative Potential of Sports
b) The Energy Plan
c) The Panama Canal
d) Regional Development through Agriculture
e) Exploring the Capital Markets
f) Spurring Sports as a Business
This conference is not intended to be a ‘talk-shop’. Our impressive slate of speakers will explore the challenges that face us, both regionally and globally and together we expect to shape practical and workable solutions for the business and government leaders.
We are grateful for the continued support of our participants, sponsors, presenters, and moderators who have been loyal and faithful to the cause of the growth of our capital markets and by extension the development our regional economies. Tonight is one way in which we express our thanks to you and welcome you to the start of what we know will be yet another successful event.
