(Jamaica Observer) – Jamaica attracted US$699 million in foreign direct investment (FDI) in 2014 or 7.0 per cent higher year-on-year, according to just published data from a United Nations-based regional body.
The president of the Private Sector Organisation of Jamaica (PSOJ) William Mahfood welcomed the investment levels but argued that the island could surpass US$1 billion.
“Investors will put their money where they feel confident. If we had the right environment and the right facilitatory processes and policies rather than focusing on tax and finding ways to take money away from investors… then US$1-billion would be peanuts,” Mahfood said on Monday in responding to queries from editors and reporters at the Jamaica Observer Monday Exchange at the its head office in Kingston.
Mahfood emphasised that, going forward, the FDIs will benefit from pending investments in tourism, road construction and energy. He also urged the Government to aim for higher levels of growth. The heavily indebted island has languished from one per cent annual growth over the last four decades.
“We need to stop talking about one per cent growth. Jamaica can grow at five to six per cent per annum on a compounded rate over five or six years,” he said, outlining growth-led policies which included streamlining taxation and custom fees.
“We have to look at the tax rate. We have to look at the ability for investors to feel comfortable [investing], and we have to look at the barriers to doing business at customs, services, etc. If those things happen you would see an explosion of investment,” he said.
The regional UN body, Economic Commission for Latin America and the Caribbean (ECLAC), stated in its Foreign Direct Investment in Latin America and the Caribbean 2015 report published late last week that FDI into the Caribbean subregion shrank 4.7 per cent in 2014 to total US$6 billion.“This nearly 5.0 per cent decline in FDI directed towards Caribbean countries is less severe than the 16 per cent drop registered in Latin America and the Caribbean as a whole, where flows fell to US$158.803 billion in 2014 from US$189.951 billion in 2013. Nevertheless, since 2008, FDI inflows into the Caribbean have fallen 37 per cent,” stated the report.
Dominican Republic received US$2.209 billion, up 11 per cent from 2013, Trinidad and Tobago had inflows of US$1.394 billion in 2014 or 30 per cent lower year on year, Jamaica registered US$699 million, an increase of 7.0 per cent, and The Bahamas, with US$374 million or 9.0 per cent less than in 2013.
Governments within the region have pursued policies aimed at improving the overall business climate including the use of financial measures to stimulate FDI inflows, such as exemptions on income tax and customs duties, said the report.