MONTEGO BAY, St James — The Government says it will table, by next March, legislation paving the way for Jamaica to attract increasingly wealthy, job-generating billionaire investors lured by a transparent incentive package.
The ambitious target was shared on Tuesday with great relish by Finance Minister Dr Nigel Clarke, who said it will make Jamaica “the breakout story of this decade in the 21st century”.
“We will be, hopefully by the end of this fiscal year, tabling in Parliament the amendments to the Large Scale Projects and Pioneering Act to make it operational. This is an Act that aims to attract investments of US$1 billion or more to Jamaica,” Dr Clarke announced on the first day of the Invest Jamaica 2022 Business Conference in Montego Bay.
He told the audience — which included potential investors — that there are projects forthcoming that fit the bill and it is therefore in their best interest to act quickly.
“To ensure that this is consistent with our framework going forward, of fiscal and debt sustainability, we will have a cap on the maximum amount outstanding at any point in time, which gives an incentive to the billion-dollar investors to get in early,” he said.
“The early billion-dollar investors are the ones who will catch the worm, because after we receive the first billion-dollar investment, and then the second and the third, and then the fourth, it’s gonna become a norm. When it becomes a norm, we… move into the US$5-billion club after that. So if you have US$1 billion to invest, get ready,” Clarke said, adding that there is also a job creation aspect in order for investors to qualify.
“I won’t give it all away today, but suffice to say that that Act will have some provisions in it that allow us to offer investors who are making that kind of a commitment to Jamaica, and it’s over US$1 billion with a minimum level of jobs created as well, …certain benefits.
“But we gonna do it in a transparent way. The days when you would go to a minister and work out a deal and come outta the office with some big incentive, those days are over. This will be an Act with the accompanying regulations that set out, in advance, what the criteria are,” he promised.
Qualified investors will be welcomed from anywhere in the world.
“Anyone — Jamaican or Latin American, European, African, Asian, North American — anyone who meets those criteria will benefit under this Act. But what is more, the Act requires that we lay out — because what we are going to be giving up will be so significant — we lay it out in Parliament so everybody is aware, and we count the cost,” said the finance minister.
He explained that, while the existing Omnibus Incentive Legislation, which provides the framework for everyday investments, has worked well, amendments were needed to attract even larger sums. This injection of larger amounts, he said, was possible because of Jamaica’s strong economic performance under the Andrew Holness-led Administration.
The Large Scale Projects and Pioneer Industries (Tax Relief) Act was passed in 2013 to provide a suite of incentives for companies which would be making substantial investments in Jamaica and/or creating new industries.
Though the legislation had passed in 2013, no regulations to give effect to the law had been done and thus no applications were processed. The process of drafting the regulations revealed significant gaps in the legislation itself, namely, rules for determining what “large-scale” and “pioneer” mean, lack of clarity on the types of incentives to be provided and non-specificity on the administration of these incentives, including the application process, claw-backs for non-performance and how the Orders are to be structured and administered.
The amendments, Dr Clarke explained, will detail qualification criteria in terms of investment threshold, jobs to be created among other factors.
Additionally, he said after the conference, there were issues of policy which needed to be clarified and amendments needed to be done to ensure that this legislation would comply with existing tax policy and international standards. These factors have required significant amendments to restructure the Act in addition to the formulation of the regulations to operationalise the Large Scale Projects and Pioneer Industries regime.
During Tuesday’s conference, the finance minister rattled off examples of the work Government has done to shore up the economy, foster private sector growth, and gain an international reputation as a sound investment option.
“You don’t need to look any further. If you’re looking for a place where the riskiness is low in comparison to other options in the region, then you are in the right place. I didn’t say that, the markets are telling you that. This hasn’t come by magic. Jamaica has been working,” he said.
The Government’s management of the economy also earned high praise from Inter-American Development Bank (IDB) General Manager, Country Department Caribbean Group and Country Rep for Jamaica Tariq Alli.
According to him, Jamaica’s investment climate “has never been more attractive” and the bank stands ready to help Jamaica and investors materialise business opportunities and maximise their value.
The IDB is Jamaica’s largest creditor, but with the island borrowing less, the annual Invest Jamaica Business Conference is its way of redefining its relationship with the country, by bringing investors to the table for the Government and others to woo.
The conference continues on Wednesday with panel discussions on agribusiness, special economic zones, and Jamaica’s financial ecosystem.