Business Lounge
The Ides Of May Investing During A Crisis
by Andre Burnett
“W
ell, the Ides of March have come”. According to Greek historian Plutarch, these were the words that Julius Caesar used to poke fun at the seer who had predicted danger for the Roman leader on the 15th day of the month. The seer responded, “Ay, they have come, but they are not gone”. This seer’s response finds relevance over 2000 years after the birth of Christ much as they did 44 years before. The events that unfolded in communities and on the streets of Jamaica’s capital city in late May, 2010 have inevitably found their way to the eyes and ears of the world and the picture painted could be one that will have dire ramifications for years to come. Forget the Ides of March; May might have done the damage.
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The truth is that investors are not tourists and a violent uprising might not be sufficient to deter one form of investment but it may well deter another.
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Stock value is largely about forecasts and perception and Jamaica’s stock, at least to those watching damning reports from around the world, has taken a swan dive from the cliff that it was teetering precariously from. Tourism is usually the first thing to be affected by such occurrences but foreign direct investment inflows into a developing country such as Jamaica is also easily affected by turbulent political and social factors. Common sense would suggest that violence in a host country influences the flow of money negatively and as such investors we would assume that common sense would be applied before any other scientific rationalizations. This may not be so.
covers 129 countries between 1976 and 1996 shows that unanticipated violence in a country negatively affects FDI flow but anticipated violence does not. Risk of violence thus becomes another variable can easily be introduced into a SWOT analysis. Another interesting finding of Professor Li’s paper is that unanticipated violence affects the probability of a country being chosen for foreign investment but it does not affect the size of the investment. Once again, investors are not exactly tourists but if they find the right accommodations they will come, no matter what. Our image won’t be restored anytime soon and a set of stringent social and economic policies will have to be established before any real long term progress is made towards stemming the woes of our country. What industries can we endeavour towards developing that will withstand even the worst battering of our image? I am loathe to suggest that we find a way around our crime problem instead of fixing it but what if our way around eventually becomes our solution? What if… indeed.
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Maybe common sense is not a common thread among leaders of multinational corporations but conventional wisdom sometimes goes out of the window when the decision is made to pump money into a new territory. The truth is that investors are not tourists and a violent uprising might not be sufficient to deter one form of investment but it may well deter another. Andreea Mihalache’s 2010 paper shows that FDI flows in agriculture, manufacturing and finance sectors remain the same regardless of violent conflict while investments in industries that rely heavily on physical assets decrease with an increase in violence. A pragmatist might offer that we try to mitigate our crime problem by developing industries that are less susceptible to the effects of lawlessness thus buffering ourselves suitably. A look at Associate Professor of Political Science at the Pennsylvania State University, Quan Li, also gives some perspective. In his findings he states that examination of empirical data that yourmoney ezine
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New media:
Reinventing Basic Communication
T
t could be argued that the decision not to include any traditional channels in the promotion of the inaugural Your Money eZine Business Summit (YMeBS) as a headstrong attempt to prove a point. Of course, the team here at Your Money would second that argument at the proverbial drop of a hat. Indeed, a point is being proven but wouldn’t we be missing an opportunity to reinforce our belief in New Media if we didn’t? We think so. On the 28th of July 2010, the YMeBS will signal a paradigm shift and in the weeks leading up to the event we hope to do the same in terms of promotion. Your Money is by no means traditional and as such, this is a chance to promote our first event solely through the channels provided by the internet’s ability to connect individuals and groups. As such the term “New Media” might be a bit misleading because New Media is not new at all. In fact New Media reintroduces the most basic form of communication into what we know as traditional mass media. The Interpersonal Medium Conversation between people is the most widely used communication medium and through technology, its reach has been extended through letters, telephone and e-mail. As such a basic conversation will fulfil the basic requirements of the participants but once the number of participants increases so does the chance of the information descending into cacophony. Mass media fixed this but it lost a very important facet at the same time. Mass Media Mass Media involves the dissemination of information from one source to many, originating from speeches by ancient tribal leaders to the transmission of a sporting event to millions worldwide using television. But this means that the content sent cannot be individualized to fit the needs of the recipients and of course the content cannot be changed by the recipient. The Best of Both Worlds New Media is the child of both these forms of media but with only the best qualities of its parents. Just as technology enabled the sky to become a practical mode of transportation, the internet has enabled us to reach millions of recipients but its unique social capabilities has allowed for targeting like never before. And while cost will always be a factor, the limit is often the limits of one’s imagination. As part of our lead-up to the Your Money eZine Business Summit we will be providing insight into our efforts and our successes and failures if any. Watch this space. yourmoney ezine
Contact: Sophia Somers Williams Account Executive Mobile Interactive Services Division Commercial Graphics Division 3M Jamaica 20-24 Barbados Avenue, Kingston 5 ssomers1@3m.com 1 876 399 4017
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Graphic courtesy of: www.timesonline.co.uk
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