Issue: 6
Businessuite Weekly
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Businessuite Weekly
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Issue: 6
Businessuite Weekly
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Contents Cover Story
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How scandals such as the National PC Bank’s Moneygate affect Development Bank of Jamaica Loans and MSMEs The Micro Small and Medium Enterprise (MSME) Alliance has dismissed concerns about the disbursement of loans by the Development Bank of Jamaica to micro, small and medium sized enterprises. However...
EDITORIAL
investment
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The Global Competitiveness Report was released last week and saw Jamaica retain its position as 86 out of 140 countries based on the annual...
Jamaica Stock Exchange calls on entrepreneurs to take active part in their investments Head of the Jamaica Stock Exchange, Marlene Street Forrest is calling on entrepreneurs who tapped into the Stock Market to take active part...
Technology
Economic Environment
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Google releases full specs on Nexus 5X & Nexus 6P following leak Google has officially unveiled the newest set of Nexus phones, the Nexus 5X and Nexus 6P following the leak of the product information...
The Economics of Crime Free market proponents have always maintained that government should confine its role in a market economy to merely creating the environment in...
Leadership
Trade
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The New Work Order is Upon Us. Will Your Job Survive? “The era of cheap labour is over”, do you agree? British broadcaster and journalist Paul Mason’s recent article in the Guardian made this bold...
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Businessuite Weekly
Jamaica Customs Exceeds Target for the Month of September 2015 The Jamaica Customs Agency ( JCA) is reporting $15.093Billion in gross revenue for the month of September. According to the agency, this is... Issue: 6
Contents Credits
The Week Ahead
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Content Director Kayla Wright
Businessuite Event Calendar
The Businessuite News Centre BNC
Publisher and Editor in Chief
Aldo Antonio aldo@blackslateholdings.com
Regional
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Subscription and Distribution
Antigua: Travel experts advocates the twining of CIP to timeshare property sales The Director of Resort Sales and Marketing at Interval International Keil Kolto, has called on the government of Antigua and Barbuda to consider...
Advertising Sales
businessuitemagazine@gmail.com
Graphic Design and Layout: Bonito Thompson
Photo credits
Sourced from the internet and contributed
Bahamas: Ambassador objects to tax haven designation in DC legislation Bahamian Ambassador to the United States, Dr Eugene Newry has written a letter to municipal officials of the District of Columbia and federal...
Commentary
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, Mark s Laas Lick: The perils of political leadership and job creation Jamaica’s high unemployment rate is a natural magnet to politicians on the stump and it forces them to lie to the people as they adopt the...
Social Media
CLICK Digital Agency
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ISBN Number
ISSN 0799-4427
Issue: 6
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Editorial By Kayla Wright
T
he Global Competitiveness Report was released last week and saw Jamaica retain its position as 86 out of 140 countries based on the annual assessment of the factors driving productivity and prosperity.
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According to the Minister of Industry, Investment and Commerce, Anthony Hylton, there is a need for a more enabling business environment in Jamaica, as ‘reforming the environment is priority for the Ministry and its agencies.’ He says that “perhaps, an important lesson to take away from this report is that Jamaica cannot relax its efforts to build a stronger more enabling business environment, the country still has a lot of work to do to improve its resilience to external factors, however, there is demonstrable evidence that work has started in this regard”. The minister also did not fail to point out that Jamaica, while maintaining its overall competitiveness, also managed to improve its performance on procedures to starting a business, ranking third globally and 8th in the legal rights index. What he did however neglect to focus on were several areas in which Jamaica has an extremely long way to go. According to the report, respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5. The following scores correspond to the responses weighted according to their rankings.
The most problematic factors for doing business
Score
Inefficient government bureaucracy Crime and theft Tax rates Corruption Access to financing Inflation Poor work ethic in labor force Inadequately educated workforce Inadequate supply of infrastructure Policy instability Complexity of tax regulations Insufficient capacity to innovate Restrictive labor regulations Foreign currency regulations Poor public health Government instability/coups
16.4 16.0 11.3 10.5 8.5 7.2 6.9 5.5 5.1 4.1 2.9 1.9 1.7 1.0 0.6 0.5
...Jamaica, while maintaining its overall competitiveness, also managed to improve its performance on procedures to starting a business, ranking third globally and 8th in the legal rights index. 6
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The report also ranks Jamaica in the bottom 40 in relation to several areas focused on government spending and corruption.
Indicator Score Rank (/140) Public trust in politicians Favoritism in decisions of government officials Wastefulness of government spending Burden of government regulation Business costs of crime and violence Organized crime Reliability of police services Gross national savings, % GDP* Inflation, annual % change* General government debt, % GDP* Country credit rating, 0–100 (best)* HIV prevalence, % adult pop Extent of market dominance Effect of taxation on incentives to invest Degree of customer orientation Pay and productivity Country capacity to retain talent Ease of access to loans Venture capital availability Domestic market size index, 1–7 (best)* Foreign market size index, 1–7 (best)* GDP (PPP$ billions)* Gov’t procurement of advanced tech products
2.3 2.7 2.3 3.0 1.9 2.6 3.6 13.0 7.1 140.6 24.9 1.8 3.3 3.1 3.8 3.4 2.9 2.2 2.1 2.6 3.4 24.1 2.9
106 102 122 106 139 137 104 112 119 138 117 121 105 113 118 111 105 118 121 115 119 116 107
So it remains true, while Jamaica has managed to in effect become more consistently competitive, there remains much more work that needs to be done. Yes we can continue to rejoice knowing that we have managed to be successful in areas such our performance on procedures to starting a business, ranking third globally and 8th in the legal rights index, areas such as Business costs of crime and violence, Organized crime, General government debt and Venture capital availability among others, need to be addressed if we are to continue to be satisfied with our ‘improvements’. BM
...areas such as Business costs of crime and violence, Organized crime, General government debt and Venture capital availability among others, need to be addressed if we are to continue to be satisfied with our ‘improvements’. Issue: 6
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Technology
Google releases full specs on Nexus 5X & Nexus 6P following leak l
Nexus 6P (left) and Nexus 5X (Right)
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oogle has officially unveiled the newest set of Nexus phones, the Nexus 5X and Nexus 6P following the leak of the product information early last month. According to Google, the handsets represent a big shift in how Google does phones with the introduction of two phones instead of one as well as the fact that because of this, users now have a choice over which option they go for.
Nexus 5X The Nexus 5X will come pre-installed with Google’s all-new Android 6.0 Marshmallow which brings with it features including Doze mode, a new battery-saving mode that Google calls the ‘biggest breakthrough to date’ with regards to battery life on smartphones and Now on Tap, a contextually aware virtual assistant that can be used in any Android 6.0 app. It features a 5.2-inch LCD display with full HD resolution, just like the original Nexus 5. The Nexus 5X has a pixel density of 424 ppi. Under the hood you’ll find a 2GHz hexa-core Snapdragon 808 processor alongside 2GB of LPDDR3 RAM. With storage you have two options: 16GB and 32GB. As usual, there is ZERO SD-support. Google has also updated the camera to a 12.3MP rear camera with an f/2.0 aperture and laser-assisted focus. On the front there is a 5MP unit. The Nexus 5X also has a fingerprint scanner for security and Android Pay, a Micro USB Type-C port and a 2,700 mAh battery.
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Nexus 6P Meanwhile, the Nexus 6P will also come with the Android Marshmallow software and boast a 5.7in display running at a 1440p resolution which translates to 518 pixels per inch. Design wise, the Nexus 6P is made of “aeronautical-grade aluminium” and will come in three aluminium, graphite and frost. There’s also a fingerprint sensor named the ‘Nexus Imprint’; it lives on the back of the device and can be used not only for unlocking the device, but also paying for things with Android Pay and as an in-app verification system. Camera wise, the Nexus 6P features a rear-facing 12.3Mp camera with 1.55 ultra pixels and laser auto focus which can instantly focus on close objects. The rear facing camera should, according to Google, outperform any other smartphone camera with regards to colour mapping and brightness. It also includes a slow-mo mode that can handle up to 240 frames per second and 4K video recording. With regards to the front facing selfie camera, the Nexus 6P boasts a 8Mp camera with an f/2.4 aperture and HDR+. The Nexus 6P features a Snapdragon 810 V2.1 processor complete with 3GB of RAM. It comes with 32-, 64-, or 128GB of storage and is the first Nexus device to feature USB Type-C connectivity. BM
Businessuite Weekly
Issue: 6
Leadership By Dr. Leahcim Semaj
The New Work Order is Upon Us.
Will Your Job Survive? “The era of cheap labour is over”, do you agree? British broadcaster and journalist Paul Mason’s recent article in the Guardian made this bold proclamation. Factory owners in China and other countries with flexible labour laws were not as amused I’m sure as the workers who toil for what can be equated to a bowl of rice per day. If the era is indeed at an end, its culmination has severe implications for the developed and underdeveloped world as outsourcing production has become the ‘in-thing’. Insourcing however, has taken quite a while to catch on. You would have to be living under a gargantuan gorge of graphite to not see the rise of the machines. I am of course referring to the digital and mechanised trends birthed by the industrial age and not the third instalment in the Terminator Franchise. In short, human beings have become replaceable. Many of the jobs existing today will go poof, a sad and crippling magic trick for under the guise of the misdirection of rises in minimum wage rates globally. Unless laws mandating the use of human labour for these low skill jobs accompany them, they will fade away.
This is the reality: Any tasks that can be codified, quantified and routinized, will be computerized. Instead of SOP’s being given to humans in franchises such as McDonalds and KFC, code will be given to computers and touchscreens, which will be the premier B2C devices. I first realized this trend 15 years ago, leading me to coin the term “The New Work Order”. Simply put, technology has and will continue to change the way we engage with the world and engage with our work. Will your job survive? For the jobs that do survive, those requiring social intelligence, skills that computers do not currently possess, demand will be high, giving significant bargaining chips to those skilled groups. They will be the ones able to reject low wages and milk the cows of change.
As Mason notes “unless we start automating low-skill tasks, we can’t have the third industrial revolution promised by information technology”. Like it or not, this revolution is coming and it will be televised and computerised. Will you be replaced by a machine? Sadly, the odds are not in your favour. And why should they be? Machines are more efficient and do not have to prodded to act. They work 24hrs shifts, are cost-effective, won’t complain about a lack of benefits and only require an upgrade every now and then. What then for the rest of us? Our only competitive advantage resides in our minds. Global work culture is shifting. Computers are getting smarter and will soon replace many low skill jobs. World War III won’t be fought with bombs and gun, but with microchips, minds and computer ‘magic’. It won’t be fought between countries, but between the tech behemoths that have blossomed in the New Work Order. On the tip of every entrepreneurs tongue is the word, ‘automate’ especially the bootstrappers.
The Jamaica Employers’ Federation has recognized Dr. Semaj for “Leadership in Innovative Workplace Practices”. He is included in Peter Ferguson’s publication CHANGE MAKERS as one of the 101 men who have helped to define modern day Jamaica. This Psychologist combines ancient wisdom with contemporary ‘livity’ to bring fresh insight to old human problems. As a Transformation Specialist he offers two options – ABOVE or BEYOND. Above where you presently are or Beyond your wildest dreams.
Is your job within the latter group? Many people fear the world to come, but in the place of fear I suggest we use knowledge. It is our only refuge against termination. If you want to learn more about what the future of work has planned for you, download my free e-book. To get your free copy visit my website: www.ltsemaj.com.
Dr. Leahcim Semaj
Any tasks that can be codified, quantified and routinized, will be computerized. Issue: 6
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Cover Story
Development Bank of Jamaicca
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he Micro Small and Medium Enterprise (MSME) Alliance has dismissed concerns about the disbursement of loans by the Development Bank of Jamaica to micro, small and medium sized enterprises. However, at the same time President of the MSME Alliance, Donovan Wignal is lamenting what he says is the negative impact caused on the ability of MSMEs to benefit from loans when Approved Financial Institutions (AFI) and Micro Finance Institutions (MFI) partners are involved in scandals.
NPCB Scandal Making reference to the recent monetary scandal which hit the National People’s Cooperative Bank (NPCB), Wignal says the scandal gave AFIs a bad reputation whichs has affected how
“the scandal gave AFIs a bad reputation whichs has affected how loans are disbursed and the general loan process.” Donovan Wignal President of the MSME Alliance
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loans are disbursed and the general loan process. DBJ’s loans are channelled through its network of AFI and MFI partners which has now been expanded to 28 financial institutions islandwide including the NPCB. A recent audit of the NPCD was ordered by the agriculture ministry after the regulator, the Agricultural Credit Board (ACB) found gross irregularities at the institution, including $665 million of depositors’ funds which it said were ‘unaccounted for’. Following the scandal, head of the Development Bank of Jamaica (DBJ), Milverton Reynolds, said he had no choice but to stop the flow of funds until the ongoing probe is concluded. He said there needed to be clarity. Reynolds said the DBJ also wanted to be sure that plans were going to be put in place to address the issues raised. He said the Bank would continue to await the final outcome of the report and will be guided accordingly. But the MSME President says to ensure there is not a repeat of the situation, there needs to be a board put in place to overlook the actions of the NPCB. His comments follow last week’s move by the NPCB to defend
“(i) had no choice but to stop the flow of funds until the ongoing probe is concluded.” Milverton Reynolds Head of the Development Bank of Jamaica (DBJ)
its operations. According to the NPCB, the deposits of its members have been used productively by making loans to members, through cash investments, property investments, plant and equipment. According to the NPCB, while it understood the concerns of stakeholders, media reports have “misrepresented the NPCB’s true position”. The group says The NPCB said members have “continued to display their confidence in the organisation and continue to utilise our facilities across Jamaica. This kind of loyalty is a clear signal that the NPCB has been making a positive impact in communities”.
Loan disbursement concerns Meanwhile the MSME Alliance President says while there is truth in the concern that MSMEs are not getting the full benefit
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of the loans, the DBJ is disbursing the funds as it stated. He says the benefits are not being realized because members of the MSME who would need the loans and grants do not have the proper documentation to do so. Wignal says there is however a need for owners of Micro Small and Medium sized enterprises to make an attempt to regulate their businesses and sort through their financials so that when they go to ask for a loan, everything is in order. He says there is also a need for MSMEs who need loans to make it known. According to the President, in many instances the DBJ is not aware that members of the MSME or Small Business Association of Jamaica (SBAJ) are in need of loans because they do not make the effort to visit AFI and MFI partners and make the need known. The MSME President says this has resulted in larger businesses benefiting from the loans and grants offered by the DBJ. Making reference to a local factory that approached the DBJ regarding expansion, Wignal says this is a regular occurrence as far as the disbursement of loans is affected. He says it is up to the MSMEs to get their paper work and priorities in order if they too want to benefit from the loans offered by the DBJ.
“over the last three years it has increased loan disbursals to MSMEs with financial year ending 2014 showing an improvement in loans to $2.3 billion, up from $1.3 billion the year before.� Development Bank of Jamaica
DBJ disbursements The DBJ says it has almost doubled the loans disbursed to MSMEs over its 2014/2015 financial year end to $4.3 billion. It says this increase in loan disbursals have also multiplied the jobs created by the small business sector some 615 per cent, moving from 429 in financial year 2013/14 to 3,066 jobs for the period under review. The DBJ says over the last three years it has increased loan disbursals to MSMEs with financial year ending 2014 showing an improvement in loans to $2.3 billion, up from $1.3 billion the year before. Meanwhile the bank increased disbursals to $4.3 billion which yielded investments of $6.5 billion for the 2014/15 financial year.BM Issue: 6
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Investment Jamaica Stock Exchange calls on entrepreneurs to take active part in their investments
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ead of the Jamaica Stock Exchange, Marlene Street Forrest is calling on entrepreneurs who tapped into the Stock Market to take active part in their investments by purchasing shares. Her comments follow concerns about the lack of incentive to tap into the JSE and the risks associated with taking advantage of the stock market. Street Forrest says utilizing any form of investment can be considered a risk. However, she says this is why a secondary market is available for an investor to sell or purchase additional shares in a company in which he/ she has part ownership. She says the JSE facilitates a listing if only 20% of the shares are held by 100 new shareholders in the case of the main market and 25 in the case of the Junior market. She says given that control is usually considered if ownership is over 50% it is clear that this perceived risk can easily be mitigated.
Mrs. Marlene Street Forrest
The JSE Head says there are also several advantages that entrepreneurs can enjoy when they join the Stock Exchange. She says this involves growth of the business, an ability to recapitalize, retire expensive debt, as well as provide an avenue for estate planning, amalgamation, mergers and acquisitions and other forms of business arrangements. Street Forrest
says joining the JSE also allows for what she describes as a good and constant source of business valuation, providing an avenue for Employee involvement through Share Option Plans and for the Junior Market, it enables small companies to take advantage of certain incentive while growing their businesses. She says the JSE currently allows for a reduction in listing fees and the government allows for a corporate tax incentive for 5 years where companies that list on the Junior Market do not pay any corporate income tax for 5 years; however this is based on several conditions.
Effect on company image Street Forrest says companies listed on the Exchange can expect a boost to their image as they are given daily exposure through the print, electronic media and our website regarding their performance. She says external companies prefer to do business with companies that are listed on the Exchange because of the standards by which they must abide. Financial wise, she says other institutions look more favorably at companies listed in the exchange and are also prepared to treat them as preferred customers primarily because their operations are usually better organized and transparent. BM
there are also several advantages that entrepreneurs can enjoy when they join the Stock Exchange. She says this involves growth of the business, an ability to recapitalize, retire expensive debt, as well as provide an avenue for estate planning... 14
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Economic Environment By Ronnie Sutherland Strategy Consultant and Media Executive
The Economics of Crime
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ree market proponents have always maintained that government should confine its role in a market economy to merely creating the environment in which businesses can thrive. When pressed as to what this environment should look like, invariably the answers are about monetary and fiscal policies relating to such indices as exchange rate, interest rate and inflation rate. The perfect situation would be low inflation, low interest rates and a stable local currency at a competitive value. If the government gets those indicators right, the business community will say the government is doing a great. It is now left to businesses to ramp up their activities and grow the economy. The current economic reform programme imposed by the International Monetary Fund (IMF) appears to be finding favour with the business class given the flurry of high profile commendations for it. The dominant view is, with a lower debt to GDF ratio, low inflation and low interest rates; the country will be properly positioned for growth. There is also the other opinion that the repeated achievements of the various IMF targets have inspired business confidence which is a psychological variable that will positively affect investments and consequently economic growth. The economic performance by the government while commendable; are not the only responsibilities it has in a market economy. It can be argued that while it is government’s role to provide a stable economic environment that will foster economic growth, the primary responsibility of government is to maintain law and order. In other words it is the primary duty of any government to keep its citizens safe and secured. As it stands now, Jamaica with an intentional homicide rate of 41 per 100,000 is placed among the six worse homicide rates in the world. Our government is therefore failing on its primary responsibility to its citizens. The real question is whether government can move to improve its woeful performance at fighting crime while maintaining the economic variables that are necessary under the IMF programme? When consideration is given to the strictures of the economic reform programme, with its very stringent control on government spending the answer is no. However, to effectively fight crime at the level that it is currently, will require vast amounts of resources to be committed. This is to deliver a significant increase to the size of the police force, advanced crime fighting technology and appropriate transportation and equipment. Interestingly, crime is increasingly being identified as having a deleterious effect on the economy, in the same way high interest rate and high inflation do. The high crime rate in the country is discouraging young entrepreneurs from entering
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business out of fear of being extorted. The high crime rate makes local businesses uncompetitive because of the inordinate security cost in their operation. The high crime rate frightens away potential tourists because of fear for their safety. By all indications, the high crime rate appears to place a ceiling on the level of economic activities with the attendant effect of stifling economic growth. Given the obvious negative impact of crime on the economy and its undesirable social consequences on citizens, it makes perfect sense that government sees law and order as its absolute priority. To assert law and order as a priority means to first identify the requirements for its effective execution and commit the resources necessary. It means the usual question of where ‘will the government get the money’ must be reserved for the other responsibilities that it undertakes. Given the existing high level of crime, the requisite resource to effectively combat it, will be enormous and would certainly disturb the stipulated IMF fiscal targets. The dilemma we face is; can we continue to pursue the targets under the economic reform programme while allowing crime to escalate? This is best answered by imagining what the country looks like with a substantial reduction in crime against what it looks like now. At the current homicide rate of 41 per 100,000 persons the estimate is for annualized murders to be approximately 1,300. If we were able to achieve a reduction in the homicide rate to be equal that of Barbados at 7 per 100,000 only 189 persons would be murdered in the country. At twice the rate of Barbados it would be 378 per annum. If we were to achieve a reduction in homicide comparable to that of Barbados, Jamaica would be considered a safe environment. It would be reasonable to expect that annual average growth rate for tourism arrivals would move up from the current 4% to 12% which is more in line with our regional competitors that are not as interesting as us but safer. At much lower homicide rate, the entrepreneurial energy of young people would surge in the absence of fear of extortion. At a significant lower level of crime, security as an operational cost would decline appreciably. This would allow local businesses to operate at cost comparable to their regional competitors. The benefits to the economy from a reduced crime environment are obvious. The opposite is also true, since no appreciable growth is expected in the economy with this level of crime. This therefore makes the case for government, to move decisively to tackle and reduce crime with the view to driving economic activities. The required expenditure to effectively fighting crime would certainly disturb the IMF arrangements but that is a risk the government should be prepared to take.
Businessuite Weekly
Issue: 6
Trade
Jamaica Customs Exceeds Target for the Month of September 2015 Richard Reese
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he Jamaica Customs Agency ( JCA) is reporting $15.093Billion in gross revenue for the month of September. According to the agency, this is 16.55% more than the target of J$12.950B which was set by the Ministry of Finance and Planning (MOFP). Net revenue collected for the month of September was J$15B which was J$2.050B above the monthly target of J$12.950B. In comparison, to the same period last year the Agency collected J$14.133B, which represents an increase of J$866M or 6.13%. Net revenue collections between April and last month amounted to J$87.939B, which was J$9.640B above the target of J$78.299B. In comparison during the same period (2014/2015) last year, the Agency collected J$74.550B. This represents an increase of $13.389B or 15.23%. According to Head of the JCA, Major Richard Reese since the start of the fiscal year, the Agency’s gross collections stand at J$88.604B. He says in comparison, during the same period last fiscal year, the collections amounted to J$75.084B. He says to date, 55% of the annual target has been attained Major Reese says the Jamaica Customs Agency is continuing to improve its business processes through automation with the implementation of the Automated System for Customs Data (ASYCUDA World) which will result in greater efficiency and client service improvements. He says to increase collections, additional revenue enhancement measures will be implemented for the remainder of the fiscal year.
ASYCUDA use expanded Major Reese says the expanded use of ASYCUDA, which came into effect last Thursday, will include the processing of Transit, Transshipment, Private and Public Bonded Warehousing declarations for commercial and non-commercial imports at select facilities, including the Port of Kingston. He says ASYCUDA is expected to yield significant cost savings and improved service delivery. The JCA Head says these engagements are expected to simplify and standardise procedures for customers, reduce waiting time, provide more accurate and consistent tax calculations, and address revenue leakage through enhanced system controls and accountability.BM Issue: 6
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The Week Ahead Businessuite Event Calendar 5
October 05
October 07
Rotary Club St. Andrew North Venue: Wyndham Hotel New Kingston
JAAP Kingston Chapter Meeting Venue: Ridgemount Church Hall, Mandeville, Manchester
October 06
Kiwanis Club of New Kingston Venue: Institute of Chartered Accountants, 8 Ruthven Avenue, Kingston 10
The Annual Conference of the Jamaica Customer Service Association Venue: The Jamaica Pegasus Hotel, 81 Knutsford Boulevard, Kingston
October 09 Montego Bay Chamber of Commerce & Industry Expo
Honey Bun Limited General Annual Meeting Venue: 24 Retirement Cresent, Kingston
Venue: Montego Bay Convention Centre
Jamaica Broilers Group Fair Play Awards of Excellence Venue: Terra Nova All Suite Hotel, 17 Waterloo Rd, Kingston 10
Sweet River Abattoir & Supplies Company Limited (SRA) 1st Annual General Meeting Venue: Golf View Hotel, Mandeville
Rotary Club of Mandeville Venue: Golf View Hotel, 5 1/2 Caledonia Road, Conference Room, Mandeville, Manchester
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Issue: 6
Regional Antigua: Travel experts advocates the twining of CIP to timeshare property sales
Neil Kolton
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he Director of Resort Sales and Marketing at Interval International Keil Kolto, has called on the government of Antigua and Barbuda to consider twining its Citizenship by investment programme (CIP) to the sale of timeshare properties. Meanwhile, Director of Interval International, Neil Kolton says CIP is an interesting twist to the investment market. He says Antigua and Barbuda and other Caribbean nations with CIP’s should consider exploring links with the timeshare business. He says it is a different market in that the government knows that it is selling to an investor more than a typical leisure traveler. However, he says it is a model that has worked and can work. Kolton says “if there is a nice quality product in a desirable location for a network and the developer happens to be tying those real estate interest sales with CBI we can certainly work with those projects.” The travel expert says linking CIP with the sale of timeshare property gives Antigua’s tourism product greater diversity and will make its CIP more competitive. He says timeshare or shared ownership gives vacationers a second home away from home. Kolton says other Caribbean countries with CIP should follow the lead of St. Kitts and Nevis which has already linked one of its CIP to investments to the timeshare market. BM
Issue: 6
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Bahamas: Ambassador objects to tax haven designation in DC legislation
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ahamian Ambassador to the United States, Dr Eugene Newry has written a letter to municipal officials of the District of Columbia and federal congressional officials protesting “in the strongest terms” The Bahamas’ designation as a “tax haven” by DC authorities in the District of Columbia Fiscal Year 2016 Budget Support Act of 2015 currently under review by Congress.
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Dr Newry says the matter is of “critical importance to the economy and reputation of my country,” following the decision to include the Bahamas “on the list of tax havens in this legislation on the basis of seemingly arbitrary and spurious grounds”. Dr Newry says the Bahamas has an exemplary history of functional cooperation through tax information exchange with the United States since 2003 and has met and exceeded international standards for tax information exchange as set by the OECD through the adoption of some 30 bilateral Tax Information Exchange Agreements. He says the country has also already committed to comply with the OECD and G20 automatic tax information exchange standard that will take effect from 2018, through bilateral mechanisms with interested and appropriate partners that meet standards on confidentiality, data safeguards and proper use of information. The Ambassador also highlighted that the Bahamas’ recent implementation “of the US Foreign Accounts Tax Compliance Act (FATCA), through a Model 1 Intergovernmental Agreement, notwithstanding the considerable financial burden associated with its implementation, reflects the resolute commitment of The Bahamas towards meeting US and global expectations for transparency and accountability.” He says the “listing of The Bahamas seems to be a peculiar instance of dissonance between your federal and state levels of government, which is particularly troubling in light of the unprecedented work that we have and continue to do to be fully compliant with United States and OECD tax authorities”. Dr Newry says the listing and legislation risks doing irreparable damage to an important sector of the Bahamian economy. Dr Newrye says the Bahamas “is a well-established, well-regulated and fully compliant financial jurisdiction and we protest, in the strongest terms our designation as a ‘tax haven’ by District of Colombia authorities”. BM
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Issue: 6
Commentary By Mark Wignall
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Mark s Laas Lick The perils of political leadership and job creation
J
amaica’s high unemployment rate is a natural magnet to politicians on the stump and it forces them to lie to the people as they adopt the mantra, jobs, jobs, jobs.
At the same time many Jamaicans with limited education and even less means are still unaware that the days of ‘factory work’ are dead. Pollsters and market researchers are very much aware that in rural areas and especially in crowded inner city communities where the unemployment rate may be as high as a staggering 70%, both younger and older people there are still convinced that all it takes to ease their immediate burden is to ‘build a factory in the area.’ Many are unaware that in many instances, labour and capital have the same expectations. The poorly educated but highly trainable young man wants the best weekly wage for his labour. The investor or shareholder in say a large multinational using that young man’s labour to produce garments wants the best possible return on his investment. The problem is, the Jamaican experience in ‘special economic zones’ is fraught with dangers, not the least of which is the Jamaican workers’ unwillingness to work too long in sub standard working conditions and to do that for what he deems, too little pay. Long before the special economic zones (Free Zone) of Kingston and Montego Bay of the 1980’s were in full swing and employed at its peak 36,000 workers, the vast majority of which were women, Jamaican social scientists had long determined that it is impossible to underpay a Jamaican worker for very long. If he believes he is being underpaid and, as in the 1980’s when most of the factories in the zones were operating outside of the ambit of local unions and, he has no recourse to any body which would lend him an ear, he does the next best. He undercuts his output to a level he believes will suit his pay packet.
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In the 1980’s that could not be done as weekly salary was directly tied to output. That resulted in a situation where many women were pretty much forced to a six day week of 12 hour shifts if they wanted to take home the US$15 which was the going rate at the time. The frustration and the tension existing among both the management and labouring class at the time were at crisis levels. Based on what has been touted in the much hyped special economic zones especially those which could arise in the Caymanas section comprising one part of the logistics hub that is still on paper, our politicians are afraid to tell our people that there will be no space for those leaving school with say, two weak passes in non science subjects. One would think that in the fast changing shape of labour there has to come a time when our politicians will be forced to tell the nation that the workplace at all levels will have absolutely no use for those who spent their times wasting five or six years of secondary education. If these zones do materialize there will be many thousands of young people who will be passed over for training because they wasted their years of secondary education. As they face social abandonment the politicians will still be on the stump making the blanket promise of jobs, jobs, jobs. The fact is, political leadership has always required that politicians play footloose with the truth. Tell the people the harsh truth about the job market and you will be voted out. Lie to them with fancy promises and you will definitely get another chance to devise a new and more believable declaration at the next elections. *The views expressed in this article are not those of Blackslate Holdings, Businessuite Magazine or any of its subsidiaries.
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