ointing to the numerous buildings that have been erected in Kingston in recent times, Finance Minister Dr Nigel Clarke says Jamaica needs to see a similar risk-taking attitude in the productive sector.
As far as Clarke is concerned, opportunities are not exclusive to entrepreneurs in a single sector.
“We need to assume a similar risk-taking attitude when it comes to building new factories. It’s because we haven’t had this experience recently, and it is further from our imagination that we don’t think about it. But we can build a factory in the way that we build a [corporate and residential] building.”
He added: “Our future will depend not only on the nature of the policy but on the quality and the risk-taking nature of our entrepreneurs.”
The finance minister stated that the current economic climate provides adequate opportunity for sectors such as agriculture to increase foreign exchange flow into the country.
His comments were in response to questions posed to him by Mayberry Investments CEO Gary Peart at the company’s first investor forum of 2022 held on Wednesday, January 12.
“The conditions that exist here today are conducive to the production of goods, and we’ve seen some of the companies involved in the production of goods in Jamaica and how well they have been doing. But the policymaker is only part of the equation,” Clarke said.
“In the same way that if I had obliterated stamp duties and reduced transfer tax, and the government reduced interest rates down to 0.5 per cent, and no entrepreneur stood up and said ‘I’m going to take advantage of these conditions to build an 11 storey building, or I’m going to build a five-storey building, nothing would have happened,” he explained.
Acknowledging that policymakers have made an effort to improve the agriculture sector, the Mayberry CEO said more can be done. He encouraged the government to implement policy changes to stimulate the country’s export sector.
“The government can incentivize businessmen to partake more in the country’s export sector which will, in turn, increase foreign exchange and reduce the rate of depreciation,” Peart opined.
In response, Clarke noted that while there is much potential in the agricultural sector as far as its ability to increase foreign exchange flow into the country, it is important to achieve this is in a way that is non-distortionary.
“There is no free lunch. If you distort the economy to give unfair competitive advantages to a certain sector, that will come back to haunt you. Of course, there are things we can do that are non-distortionary that can increase our export earnings.” the finance minister said.
At the forum, Clarke also said the moderate levels of growth in the next fiscal year could result in Jamaica achieving higher levels of GDP than before the pandemic.
“As far as growth is concerned, we are expected to have a quite buoyant recovery this year. I’ve heard the PIOJ and central bank speak of growth of between seven and nine per cent and the first two quarters bear witness to that,” Clarke said.
The finance minister said it is important that Jamaica once again achieves the level of economic output it had before this pandemic.
“There is every indication that we are likely to achieve that level of economic output in the upcoming fiscal year, which would be a big deal.”
Further, the minister said Jamaicans ought not to be concerned about inflation in the long run because the country has an independent, well-capitalized central bank.
“Growth over the medium term is a primary concern of mine from a policy maker’s point of view. Growth is what allows us to experience an expansion in revenues, and there is no better time than this particular fiscal year to illustrate that,” Clarke said.