Delroy ChuckPEOPLE WITH money seek safe havens to invest, grow and secure their wealth. Yes, it is important to earn well but even more important to save and place one's earnings into safe and reliable assets. Nowadays, hundreds of billions of Jamaican dollars are searching for better returns and, at least, the preservation of purchasing value. Government paper, saving accounts and short-term deposits are the preferred investments but significant sums are moving to the stock market and long-term bonds.
Pension Funds, with close to a hundred billion dollars available, are largely invested in government paper, stocks and bonds. The banks invest mainly in government paper, and lend to government agencies and for consumer durables. Capital in Jamaica is hardly being used to develop our country. It is not used for production, or for expanding businesses, or for education or health, or to rehabilitate and renew our agricultural crops, or for lasting infrastructure. Capital, for the past decade and more, has been used mainly in a massive paper chase, in which a few companies and individuals have got extremely rich. The government's domestic debt of over 400 billion dollars is owed primarily to rich companies and individuals.
It is such a pity that so much capital is tied up in paper instead of real assets. Yet, it is government policies that have shifted money from real assets to paper, and it will need the right government policies to reverse the trend and induce investors to put their money into real and productive businesses. At present, the country is desperately in need of houses, at least 20,000 annually, according to Everton Hanson, the CEO of the Jamaica Mortgage Bank, in the special advertising section of Time Magazine, March 15th, 2004. Reasonably priced houses are in short supply, and I am aware that houses in the 3-10 million-dollar range can easily be sold. Still, in spite of the housing shortage, most private investors have to search hard to find land in preferred communities, and then wait inordinately on government agencies for building approval before they can even get started.
To ease the housing shortage, it is time the government takes a proactive approach to facilitate, simplify and encourage private housing development. Every family has a sacred and strong wish to own and cherish a home, and will stretch far and wide to invest in one. Pension Funds and private sector investments are also sources of capital for expansion and development in the housing sector. In truth, we must find innovative ways and means to provide housing solutions for prospective home-owners and for investors who seek safe and reliable rental income.
It is government intervention that allowed nearly 500 homes to be built in the green areas at the top of Beverly Hills, overlooking the city, and many more homes are being built on the plains and hills of many parishes. I think however that government should stop using and allowing the green and open spaces of our country to be used for housing solutions. Just think of Hong Kong, or Singapore, or other city-states, which are smaller than most of our parishes and yet accommodate larger populations than ours. We need to learn from these formerly Third World countries that have provided housing solutions. They made development a priority and so can we.
PRIORITY
Urban renewal and development should be a priority in our towns and cities but it can only come if capital is invested and attracted to these areas. The pockets of poverty, expanding ghettoes and decaying neighbourhoods are the direct consequence of the depletion, deprivation and withdrawal of capital investment. Many homes in hitherto well-to-do communities have been neglected, abandoned and allowed to fall into disrepair as owners move on and/or allow tenants and squatters to override and destroy their investments. The decay and decline of formerly middle class communities can only stop if government focuses on their renewal and, preferably, through transparent programmes and plans for development, and the unleashing of the entrepreneurial energy of the private sector.
I believe we need to focus on our inner-cities or areas in which the houses are old, dilapidated and hungry for development. Government should reclaim, purchase or acquire parcels of ten or twenty acres at a time and sell these parcels to private developers to build gated-communities, which provide the safety and security for home-owners and discerning investors. Gated-communities, attractively designed and developed, well secured and protected, etc. will find ready purchasers even in areas that are now in decline, and provide the solution and inspiration to rebuild these neighbourhoods. I would suggest further that in the main city centres, we need high-rise buildings to provide decent and well-appointed apartments for city dwellers.
Admittedly, there are much better minds that can plan and provide a blueprint for the development of our towns and cities, and it is time they give the leadership and vision to do so. I can only hope that our present government will buy into the urgent need for urban renewal, facilitate the private sector and pursue policies that will allow capital to move away from the paper chase and into real development.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by e-mail at delchuck@hotmail.com.
