Prior to the 1990s, the Jamaican business community lived a split life: families in Florida with a commuting businessman. That model did not work—investment plunged, making the businesses uncompetitive. By 1992, their dollar was reeling, causing much concern about social and economic stability.
Gordon ‘Butch’ Stewart then stepped up with the shocking news that he would pump US$1m per week into the official foreign exchange market at below prevailing rates to stabilize the dollar. A fellow businessman congratulated Stewart for ‘the new feeling of hope and positive outlook … now being experienced by all of us as Jamaicans.’
In 2002, Michael Lee Chin purchased 75% of NCB Jamaica for US$127m and has overthrown the Trinidad ‘invasion’ of entrepreneurs who had swooped in to purchase assets. NCB moved from a 24% to a 44% market share among their banks, under the mantra ‘Building a Better Jamaica’.
As Chairman of Jamaica’s Economic Growth Council, he is integral to the movement to grow the GDP, creating currency stability and heightened confidence. Jamaican business leadership stepped up in their crisis.
To be clear, I do not completely endorse the outcomes since poverty and household pain still exist there. To counter that, civil society has to rise up. We are poorer for the emasculation of the trade unions in this regard. But to their credit, the men stood up.
Our businessmen are adopting a reverse strategy in spite of the goodies they have enjoyed in our ‘period of unprecedented prosperity’ (IDB, 2007). In 2010, one of our own boasted in Jamaica: “[we] have been able to borrow for retooling at 5% interest rate … giving us the ability to invest in plant efficiency on a scale that has been denied to [Jamaicans] …”
Domestically, Vision 2020’s dream of sustained and balanced growth, where the benefits from growth would spread out to the entire population, died. Meanwhile, in the 1991-2018 period, our businessmen widened the existing compensation gap with their workers by a further 50%. This does not include bonuses and stock options.
Their wealth distorted the housing market, disenfranchising our young. The dream of a home has vanished for most unless there is a rich parent in the wings. The business class created private schools, hospitals and security forces. They live in a closed cocoon while at the same time feeding on the tenders and other government business deals.
They enjoy the best of the tax advice available so as to keep their liabilities, and therefore their contributions, low. They ignore the pain that is caused by a treasury that cannot fund the fundamental requirements of the wider community. Money, for them, is no longer about buying things, but a competition among themselves. How many Mercedes Benz and Porsches does one need in a single household?
They have benefitted from tax legislation starting with the Fiscal Incentives Act, shunting the social costs of their businesses onto the public. The average man has seen his basic dreams disappear, his back against the wall. But our businessmen keep wanting more.
This attitude flies in the face of the statement in a 2007 Inter-American Development Bank (IDB) report that “… whereas oil and gas revenues have financed local consumption, they have contributed little to investment in the country’s future productive capacity.”
The report also noted: “Increases of around TT$90bn in market capitalization since 1997 were due mainly to increases in share prices (around 75%) … regional companies access capital in Trinidad & Tobago … there are enough resources to finance local firms through the local stock exchange … but firms are not using the option.”
I endorse the sentiment expressed in the book The Third Pillar by Raghuram Rajan, an economist and past governor of the Reserve Bank of India. He said: “… society suffers when any of the pillars weakens or strengthens overly relative to the others.
“Too weak the markets and society becomes unproductive, too weak a community and society tends to crony capitalism, too weak the state and society turns fearful and apathetic.
“Too much market and society becomes inequitable, too much community and the society becomes static and too much state and the society becomes authoritarian. A balance is essential.”
We face big, complex issues that require systemic efforts and cooperation. When will the business community think beyond the next quarter’s results and help our country to be a better place? Will they intervene to make our government more responsive to the people of this country? Are they going to ship their money abroad or give us hope?