Jamaica Vision 2030
Part 1: Fish or Fowl – When It Comes To Fare Fixing, Are We In The Public Or Private Sector? – To Achieve Vision 2030 For The Public Transportation Sector A New Business Model Is Needed Now…NTAG
The recently formed National Transporters Alliance Group Limited (NTAG) has outlined a very ambitious plan titled – A National Public Transportation Plan For The Jamaican People 2022-2030.
Interim President and CEO of the newly formed National Transporters Alliance Group Ludlow Mclean, is hailing the formation of this cooperative style representation body as game changing for the Public Transportation sector.
The organisation he said was formed to better represent the interest and welfare of Route and Hackney taxi operators islandwide offering rides and last mile delivery services, and courier bikers, all operating through App based technologies.
The plan outlines in some detail what NTAG describes as a new business model based on a number of strategic and fundamental changes and implementation of a technology platform.
The purpose of the NTAG plan is to present a pathway and course of deliberate actions that will improve efficiency, transparency, and fairness, while providing the framework to accelerate the economic growth and development within the public Transportation sector by 2030.
“Our Mission at NTAG is To Achieve Vision 2030 Outcome #9 Of A Modernized Public Transport System That Contributes To Improved Quality Of Life For All Jamaicans.”
In this Six (6) part feature, Businessuite takes an in depth look at the plan for wider public consumption and discussion.
Part 1: Fish or Fowl – When It Comes To Fare Fixing, Are We In The Public Or Private Sector?
“Governments do not expect to make profits from the necessary support for public transportation. An efficient service is important for productivity and other economic benefits that come with moving goods and people. There needs to be a more disciplined approach of how buses are run in urban areas and then those who are served will follow suit. Public transporting should be subsidized. The economic benefits of subsiding will not be direct. The more efficient the public transportation becomes is the more efficient workers become; they reach work on time. They do not have to spend two hours or maybe 30 minutes in traffic” Dr. Lawrence Nicholson The University Of The West Indies
Are We In The Public Or Private Sector? This is a key and fundamental question the plan first seeks to establish, indicating that it must be addressed and clarified without doubt, especially in the matter of fixed and controlled fares.
Government imposed fixed and controlled fares is seen as the most pressing factor impacting investors and operators in the sector, as it directly impacts revenue, profitability and increased investments in the sector.
NTAG poses the following questions.
“Are we operating as private sector entrepreneurs, like the supermarket, gas station,
market vendors, farmers, manufacturers, banks, insurance etc., putting up our own
capital, and paying taxes etc., with the expressed goal to make a decent profit and ROI….If we make a loss that is for our own account.
OR
Are we in the Government operated and controlled Public Transportation Sector offering a public service, supported, subsidised and funded in part by tax payers money, so the Government fixed and controlled fares to the public is lower, as in the case of the JUTC.”
This question is raised against the background of Government policy, as articulated by Finance Minister Nigel Clarke in his 2022 budget presentation where he stated with much fanfare and chest beating that his Government does not believe in price fixing, a very important point to note.
“There is lot of history of failure with the policy of price fixing. History has taught us that when you fix prices, quantity inevitably declines and quality frequently suffers.” Hon. Nigel Clarke Minister of Finance and the Public Service
According to Hon. Nigel Clarke Minister of Finance and the Public Service in his budget presentation on Tuesday, March 8, 2022…. “We do not believe that telling banks what they must charge for a package of services solves this (fee) problem. We hold this view, as we know it would make matters much worse. We don’t believe in telling the market vendor what she should charge for mangoes or the sky juice vendor what he should charge for a bag juice.
There is lot of history of failure with the policy of price fixing. History has taught us that when you fix prices, quantity inevitably declines and quality frequently suffers. The reason is simple: if it is unprofitable to provide the services at the fixed price, the provider will simply choose not to provide the service and then we have a real problem. You can’t compel anyone to operate at a loss.
Also, whenever you try to fix prices instead of dealing with the fundamental underlying malady, the entity whose prices have been fixed will simply pass the costs unto consumers in other, potentially more damaging, ways.
We don’t believe in telling people what to do and in fixing prices. We don’t fix sky
juice price, we don’t fix bulla price, and we are not fixing no price. We do, however, believe in protecting the poor and vulnerable.”
According to NTAG this pointed comment by the Minister clearly makes their case and argument for allowing market forces and not the Government to set prices.
“When I hear people talk about a 15 per cent increase it is relative. That is on a $100 fare. It is not like a private sector employee who would see it as a very good increase because they are getting that on hundreds of thousands of dollars. We are business operators, self-employed individuals. We have been given basket to carry water over the years. We have not got a fare increase in over eight years, and every single thing we consume, to include taking care of our families, we are affected by that as well. Other sectors don’t have to apply to the Government for an increase. We have to apply and wait on them, so it is hard on the sector. We are told to get younger vehicles and when we do we can’t maintain the fleet.”
Sophia Campbell Head Route Taxi Association of Jamaica
NTAG’s position is that we are a private sector group of individual, corporate investors and operators, our firm position is that we are operating as private sector entrepreneurs, like the supermarket, gas station, market vendors, farmers, manufacturers, banks, insurance companies etc., putting up our own capital, and paying taxes etc., with the expressed goal to make a decent profit and ROI….If we make a loss that is for our own account.
NTAG does not support the view that the Government should set prices in the sector and that the forces of the free market should prevail, as outlined in the Governments position firmly articulated by the Minister of Finance in his 2022 Budget presentation.
“The truth is that each operator is licensed as an individual not as a corporation, but the same operator may operate multiple vehicles and each with its own specific road license to a specific vehicle and route. The individual is only required to come through an Association to deal with the Transport Authority, actually creating a cash cow for operators of these Associations. So, the answer to your question is yes an operator should be able to set his own fare structure. The problem it would cause is major disruptions and lots of variances in prices on any given route. Free trade is allowed in Jamaica. Price structuring no longer exist in Jamaica. Gas stations have the right to set his own prices. In fact, some corporate area gas stations have multiple prices in a day to capitalize on the rush hour crowd. What would be needed to make it work, is that every operator on a given route should discuss and agree on the price per route. They could also capitalize on raising the fare each time the gas goes up and decrease each time the gas price decreases”
Marcel Antonio Clarke Transport Sector Investor
Like Hon. Nigel Clarke, Minister of Finance and the Public Service, NTAG believes that the Government has better and more cost-effective ways and means of protecting members of the Jamaican public it deems warrants assistance and support in their public transportation needs. This in much the same way it subsidies the JUTC or provides PATH and other related social services, targeted at those who really need it.
“The operators are complaining about high fuel prices. they have to overcharge passengers in order to survive in a competitive industry.”
Ann Pearl President of the North East Manchester Taxi Association
In his budget presentation on Tuesday, March 8, 2022 Hon. Nigel Clarke, Minister of Finance and the Public Service said.. “We do, however, believe in protecting the poor and vulnerable. We do, however, believe in making more information available and allowing individuals to make their own choices. We do, however, believe that such a system is ultimately superior to one where you are told what to do.
There was a time we used to fix who could bring in food into Jamaica. You know what happened? The business people just set up shop in Miami and became the suppliers of the basic foods to Jamaica. Instead of making their money here in Jamaica, they made it in Miami.
There was a time we use to fix who could import cars. You know what happened?
The restriction created a shortage and led to massive increases in the price of cars.
Knee jerk price fixing doesn’t work, no matter how much you shout or scream. Solving fundamental structural problems work. Freedom works. Protecting the vulnerable works. We believe in delivering targeted support and when we target we go big. As much as practically possible, the Government wishes to direct the relief
towards persons who have been, and are, most affected and who have the least ability to cushion for themselves.”
“I think the time has come for players in the public transport sector to decide whether or not we should continue to call upon government and wait on government for a fare increase. I put it to you that the time has come for the sector to let the market decide on the true cost to travel. The Transport Operators Development Sustainable Services has been for the past several weeks looking at the suggestion by the Minister of Transport Hon Audley Shaw for a review of fares and the subsequent statement by the Minister of Finance Hon Nigel Clarke on the subject of price setting and fixing.
It is my humble view that if the Minister of Finance is to be taken by his words then the policy must be change to let the market decide the fares for the privately-owned public transportation and have a set fare for the government owned public transportation.”
Egeton Newman President Transport Operators Development Sustainable Services
Here again NTAG is in full support and in line with the Minister and the Government that solving fundamental structural problems within the Public Transportation Sector works. Freedom to set fares and prices works, and importantly protecting the vulnerable works. NTAG also believes in the Government delivering targeted support.
Part 2 Public Transportation Sector Cannot Survive On One Foot!
Businessuite News24
Jamaica Open For High-Value Agricultural Investments – Minister Green
“Now is the time for high-value agricultural investment, right here in Jamaica. Things that we produce in Jamaica are sought after all over the world. As such, we do believe there are significant opportunities now in agro processing,” Mr. Green said.
Businessuite Markets
Unlocking Opportunities for SMEs in Jamaica’s Emerging Financial Hub
Rather than being overshadowed by larger corporations, SMEs can seize the moment to thrive in a rapidly evolving business environment, proving that small can indeed be mighty.
Businessuite Markets
Jamaica’s Leap Toward Becoming the Caribbean’s Leading Financial Hub
Jamaica, with its developed corporate sector, deep financial markets, and ambitious government policies, is poised to challenge these established players and emerge as the premier destination for companies seeking to domicile and expand in the region.
As global businesses look to diversify their operations and establish footholds in new markets, financial and economic hubs have become pivotal in driving investment, innovation, and growth. In the Caribbean, jurisdictions such as Bermuda, the Cayman Islands, and Barbados have long attracted international companies with favorable tax regimes and strategic incentives. However, Jamaica, with its developed corporate sector, deep financial markets, and ambitious government policies, is poised to challenge these established players and emerge as the premier destination for companies seeking to domicile and expand in the region.
Lessons from Regional Financial and Economic Hubs
Countries in the Caribbean and beyond have demonstrated the transformative potential of financial hubs:
Bermuda: Known for its insurance and reinsurance sector, Bermuda’s regulatory environment and tax neutrality have made it a magnet for global financial services firms. However, reliance on low taxes has also attracted criticism and regulatory scrutiny.
Cayman Islands: With no direct taxation and a strong legal framework, the Cayman Islands is a leading jurisdiction for hedge funds, private equity, and structured finance. Its reputation as a tax haven, however, underscores the importance of balancing incentives with transparency.
Barbados: By offering double taxation treaties, Barbados has positioned itself as a more compliant alternative to traditional tax havens. Its focus on substance and economic activities ensures companies contribute to the local economy.
These examples highlight both the opportunities and challenges Jamaica will face as it carves its path. The key lies in ensuring transparency, compliance with global standards, and alignment with domestic economic priorities.
Jamaica’s Competitive Edge
Jamaica’s positioning as a regional financial hub offers several advantages:
Highly Developed Corporate Sector: Jamaica’s professional services sector is robust, boasting experienced attorneys, accountants, and business consultants. These professionals, along with a business-friendly legal framework, are essential for supporting international companies.
Deep Financial Markets: Jamaica has the Caribbean’s most developed stock exchange, which has received global recognition for its performance. The Jamaica Stock Exchange (JSE) provides companies with access to a dynamic capital market, facilitating fundraising and investment.
Strategic Location: Situated at the gateway to the Americas, Jamaica offers logistical advantages for businesses looking to operate across North and South America and Europe.
Political Stability and Infrastructure: The government’s commitment to economic reform, coupled with ongoing infrastructure development, positions Jamaica as a reliable base for business operations.
Benefits of Establishing Jamaica as a Financial Hub
Transforming Jamaica into a financial hub could have far-reaching benefits:
Increased Foreign Direct Investment (FDI): A thriving financial hub attracts international companies, leading to increased investment in infrastructure, technology, and human capital.
Job Creation: Establishing headquarters and operational bases in Jamaica would create high-skilled jobs in sectors such as finance, law, IT, and consulting.
Revenue Growth: While balancing competitive tax rates, Jamaica could implement substance requirements that ensure meaningful economic activities occur locally, generating tax revenue and broader economic benefits.
Economic Diversification: Reducing reliance on traditional sectors like tourism and agriculture, a financial hub would add depth and resilience to Jamaica’s economy.
Knowledge Transfer: International companies bring expertise and innovation, fostering the development of local talent and boosting productivity across industries.
Mitigating Risks and Ensuring Compliance
One major risk of becoming a financial hub is the potential to be labeled as a tax haven. Jamaica must manage this by:
Adopting Global Standards: Aligning with OECD guidelines, including a minimum corporate tax rate of 15%, would enhance transparency and mitigate reputational risks.
Economic Substance Requirements: Ensuring companies domiciled in Jamaica conduct genuine economic activities locally—such as maintaining offices and employing staff—prevents the creation of shell entities.
Robust Regulation: Building a well-regulated financial sector with strong anti-money laundering (AML) and know-your-customer (KYC) measures would ensure compliance with international norms.
Leveraging Double Taxation Treaties: Like Barbados, Jamaica could negotiate treaties with major trading partners to facilitate legitimate business operations and reduce tax liabilities for investors.
Spinoffs and Strategic Opportunities
The growth of a financial hub would create ripple effects across Jamaica’s economy:
Boost to Allied Sectors: Legal, accounting, and IT services would see increased demand, driving growth and innovation in these sectors.
Infrastructure Development: Investment in office spaces, telecommunications, and transport networks would accelerate, benefiting both businesses and citizens.
Regional Leadership: Jamaica’s success could inspire other Caribbean nations to pursue financial diversification, enhancing the region’s global competitiveness.
Expansion of Local Companies: Jamaican businesses could leverage the improved business environment to scale internationally, using the hub as a launchpad.
Preparing Existing and New Businesses
For Jamaican businesses to thrive in this new environment, they must take proactive steps:
Embrace Digital Transformation: Adopting modern financial technologies and enhancing digital capabilities will be essential for competing in a global marketplace.
Invest in Talent Development: Companies should focus on upskilling employees in areas such as international finance, compliance, and technology.
Strengthen Governance: Adhering to international best practices in corporate governance will enhance credibility and attract investors.
Explore Public-Private Partnerships (PPPs): Collaborations with the government on infrastructure and regulatory projects could yield mutual benefits.
A Roadmap for the Government
To realize its vision, the Jamaican government should:
Develop a National Strategy: A clear roadmap outlining goals, incentives, and timelines will be essential for driving investor confidence.
Engage Stakeholders: Regular consultations with local businesses, international investors, and regulatory bodies will ensure policies are balanced and effective.
Invest in Marketing: Promoting Jamaica’s advantages as a business destination through global campaigns can attract high-profile companies.
Focus on Sustainability: Building a green financial hub aligned with global ESG (environmental, social, governance) standards would position Jamaica as a forward-thinking leader.
This Is Jamaica’s Moment to Shine
Jamaica stands at the cusp of a transformative opportunity. By leveraging its inherent advantages and learning from the successes and challenges of other financial hubs, the island nation can redefine its economic future. With strategic planning, regulatory diligence, and robust stakeholder engagement, Jamaica has the potential to leapfrog regional competitors and become the Caribbean’s premier destination for international business.
As the government and private sector work together, Jamaica’s vision of becoming a financial hub is not just achievable—it is inevitable. The time to act is now.
Businessuite News24
Why Jamaica Should Now Set Up a Sovereign Wealth Fund: Lessons from Around the World and Pathways Forward
In an era where economic stability, sustainability, and growth are increasingly linked to strategic investment, Sovereign Wealth Funds (SWFs) have become pivotal tools for countries seeking to secure long-term wealth and ensure fiscal resilience. From Norway’s Government Pension Fund Global to Singapore’s Temasek, SWFs have enabled nations to tap into their natural resources, surplus revenues, and financial assets to drive economic prosperity. For Jamaica, establishing an SWF could be a game-changer—particularly in strategically important sectors such as technology and logistics—boosting growth, infrastructure, and innovation. But what lessons can be drawn from other nations, and how can Jamaica begin the process?
Global Lessons: Why Sovereign Wealth Funds Were Set Up
Sovereign Wealth Funds are state-owned investment vehicles that manage a country’s wealth generated from surplus revenues. Typically, these funds are built from natural resource wealth, sovereign surpluses, or foreign currency reserves. Countries around the world have set up SWFs to achieve multiple objectives, including:
- Revenue Diversification: For countries heavily reliant on natural resources (e.g., oil, gas, minerals), SWFs help to diversify income streams by investing in international assets. Norway’s Government Pension Fund Global, for example, was established in 1990 to ensure that the country’s vast oil wealth would benefit future generations. The fund is now valued at over $1.4 trillion, providing a stable source of income and contributing to Norway’s high standard of living.
- Stabilizing the Economy: SWFs serve as stabilizing mechanisms during economic volatility. For example, the Abu Dhabi Investment Authority (ADIA) was created to manage oil revenue surpluses, helping the United Arab Emirates (UAE) balance its economy during periods of fluctuating oil prices. These funds can also help buffer countries against market downturns and reduce dependence on foreign debt.
- Social and Economic Development: Some SWFs are designed to invest domestically, driving infrastructure projects, technology innovation, and long-term economic development. Singapore’s Temasek has invested heavily in sectors like technology, finance, and biotechnology, turning Singapore into a global business hub and innovation leader.
Why Jamaica Needs a Sovereign Wealth Fund
Jamaica stands at a critical juncture in its development. While the country has made strides in stabilizing its economy and reducing debt, it continues to face significant challenges in terms of growth, unemployment, infrastructure, and innovation. The establishment of an SWF could address several issues:
- Diversifying Revenue Sources: Jamaica has limited natural resource wealth compared to countries like Norway or the UAE, but its burgeoning tourism sector, agricultural exports, and potential in renewable energy could serve as sources for building an SWF. By harnessing surplus revenue from these sectors, Jamaica could reduce its reliance on volatile industries and international borrowing.
- Investing in Critical Sectors: With a focus on technology and logistics—two key sectors for Jamaica’s economic transformation—an SWF could directly fund strategic infrastructure projects and innovation initiatives. Jamaica’s logistics sector, in particular, is primed for growth, thanks to its strategic location between the Americas and its modernizing port facilities. Technology, particularly in areas such as fintech, e-commerce, and digital platforms, offers significant opportunities to drive productivity and global competitiveness.
- Long-Term Economic Stability: Jamaica’s SWF could serve as a buffer in times of economic crises, reducing the country’s reliance on external loans or foreign aid. By investing in international assets and diversifying revenue, Jamaica could stabilize its economy during periods of local or global market downturns.
- Intergenerational Wealth: Just as other nations use their SWFs to secure the prosperity of future generations, Jamaica could use its SWF to ensure sustainable wealth. By building a fund with a long-term investment horizon, Jamaica could improve its fiscal health and create financial security for generations to come.
Case Studies of SWFs in Technology and Logistics Investment
Countries have used their SWFs to strategically boost sectors critical to their economic future. A few notable examples:
- Singapore’s Temasek: This fund has made substantial investments in high-tech companies, including stakes in global tech giants such as Alibaba and Facebook. By focusing on sectors like technology, innovation, and sustainable energy, Temasek has played a key role in transforming Singapore into a global business and technology hub. Jamaica, with its focus on a digital economy, can benefit similarly by using an SWF to foster its tech industry, from supporting local tech startups to attracting international investment.
- Norway’s Government Pension Fund Global: While Norway’s SWF primarily invests internationally, it has also funded domestic initiatives related to renewable energy and sustainability, sectors that could align with Jamaica’s Green Economy ambitions. As the world shifts towards renewable energy, an SWF could help Jamaica pivot to clean energy investments, such as solar and wind, helping to both diversify the economy and create jobs.
- United Arab Emirates’ ADIA: The UAE’s SWF has invested heavily in logistics infrastructure, capitalizing on the country’s strategic position as a global trade hub. The UAE’s investment in ports, free zones, and air freight facilities has turned it into a global logistics leader. Jamaica, with its proximity to key shipping routes, could use an SWF to fund logistics infrastructure such as ports, highways, and transportation systems, strengthening its competitive advantage in the global supply chain.
How Jamaica Can Start the Process
The establishment of an SWF requires careful planning and coordination among key stakeholders, including the Jamaican government, financial institutions, and the private sector. Here are a few steps Jamaica can take to begin the process:
- Set Clear Objectives: Jamaica should define the strategic goals of its SWF—whether for stabilizing the economy, diversifying revenue, or funding specific sectors like technology and logistics.
- Identify Funding Sources: Jamaica can consider using surplus revenues from key sectors (tourism, agriculture, remittances, renewable energy) as well as potential future revenues from investments in the logistics and technology sectors.
- Create a Governance Structure: Establishing strong governance is crucial for ensuring transparency and accountability. The SWF should be managed by an independent body, free from political influence, with a mandate to focus on long-term returns.
- Develop Investment Strategies: The fund should target both domestic and international investments, with a focus on sectors that will drive Jamaica’s economic growth, such as technology, infrastructure, and logistics. Investments should be made with an eye toward sustainability, creating jobs, and fostering innovation.
- Engage with International Experts: Jamaica should collaborate with international financial experts and countries with established SWFs to gain insights into best practices and avoid common pitfalls.
How It Can Benefit the Jamaican People
An SWF, when managed effectively, could provide significant benefits to the Jamaican people:
- Job Creation: Investments in technology and logistics infrastructure could lead to the creation of thousands of high-skilled jobs in emerging industries.
- Economic Growth: By funding key infrastructure projects and fostering innovation, Jamaica could become more competitive on the global stage, attracting investment and boosting exports.
- Social Benefits: The SWF could fund social projects in education, healthcare, and environmental sustainability, improving the quality of life for Jamaican citizens.
- Fiscal Stability: Over time, an SWF can provide a steady stream of revenue, reducing Jamaica’s reliance on international loans and enhancing fiscal sovereignty.
Conclusion
Establishing a Sovereign Wealth Fund offers Jamaica a unique opportunity to build a more resilient and prosperous future. By learning from global examples and focusing on strategic sectors like technology and logistics, Jamaica can leverage its natural and human resources to create a fund that ensures long-term economic stability, growth, and social progress. The time is now for Jamaica to explore the potential of a Sovereign Wealth Fund, laying the groundwork for a sustainable and diversified economy for generations to come.
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