Lavern Clarke, Business Reporter

The 2006 inflows of foreign direct investments to Jamaica, US$850 million (J$56 billion), is the country's largest in any given year since 1985, a review of trade data indicates.

The outturn easily outclasses the previous peak of US$721 million recorded in 2003. But Jamaica FDI growth last year at 24.6 per cent was well below the global growth of 38 per cent to reach US$1.3 trillion.

Conversely, Jamaican-based companies invested US$108 million overseas (J$7.1 billion), more than the prior year's US$101 million, but US$8 million shy of peak capital ouflows in 2003.

Big companies - in the Jamaican context - like GraceKennedy and Jamaica Producers, as well as financial institutions, notably Jamaica Money Market Brokers, have been pushing more aggressively into the Caribbean and Latin American region, and even wider markets, to build out their businesses.

The upturn in inward investments comes even as Jamaica's reputation for business friendliness is being choked by red tape and heavy taxes.

Fell 13 Places

Last year, the country fell 13 places to No. 63 among 178 countries ranked under the World Bank's Doing Business survey, which covered a one-year period to June 2007. Its ranking for taxes was No. 170.

Still, the country's ability to command capital pales in comparison to regional countries like Dominican Republic, which wooed US$1.18 billion of investment last year, and US$1billion in 2005.

Offshore financial centres Cayman Islands grabbed US$2.88 billion - though this represents a significant drop in foreign investments for the tiny island state which were near US$11 billion the year prior - while the British Virgin Islands topped the region with US$6.46 billion.

Cuba, still weighed down by a U.S. economic blockade, had only US$1 million of investment, down from US$2 million in 2005.

Jamaica Far From Satisfied

Trade Minister Karl Samuda, whose portfolio covers investment, has signalled that Jamaica is far from satisfied with its regional position as the No. 4 place to invest and would be shooting for the top slot, by wooing more transnational corporations. "We are not simply promoting investment in Jamaica in terms of products. We are expanding that to include Jamaica as a brand," said Samuda, Minister of Industry, Commerce and Investments, at last week's launch of the World Investment Report 2007 in Kingston.

"We have proximity to the most developed economy of the world; we have infrastructure that in some cases is second to none; we have a stable democracy, sophisticated financial institutions, highly skilled workers and we will be expanding on training of our workers, and we have an environment that is conducive to business."

Samuda said the new Bruce Golding administration is ready to attack the bureaucracy to make it easier for both locals and foreigners engaged in commerce to operate. The World Invest Report 2007 suggests that FDIs within the Caribbean doubled to US$14.4 billion in the past year, up from $7.7 billion in 2005.

However, the region's 2006 performance still pales in comparison to the $30 billion of investments in the region in 2004.

Trinidad for example, has seen two years of decline in FDI flows to US$788, placing it at the No. 5 spot for investment below Jamaica. The most spectacular plunge, however, was Cayman, from US$11 billion last year to US$2.9 billion.

lavern.clarke@gleanerjm.com

Taken from the Financial Gleaner, Friday October 26, 2007.