3 months ago
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Improving education levels of Jamaica’s workforce is key to the country attracting some types of investment possible under large public-private partnership agreements, called PPPs, which can lead to rapid economic growth.
This is the view of Managing Director of the International Finance Corporation Makhtar Diop, who says the conditions are right for Jamaica to attract nearshoring business from the largest economy in the world: the United States.
The Senegalese native says, however, that Jamaican workers need the appropriate skill sets to attract American investments in areas such as business and healthcare services.
“Education is central to any growth trajectory, particularly in a country which is not endowed with a large amount of natural resources such as minerals. So you have to rely on your geographic position to attract investment in areas such as nearshoring,” said the IFC head during an interview with the Financial Gleaner on Wednesday, September 4, the third and final day of his working visit to Jamaica.
Nearshoring is the practice of companies outsourcing all or part of their operations to companies in a nearby country.
The IFC, which is the World Bank’s private-sector arm, offers investment, advisory and asset-management services to encourage private-sector development in less- developed countries.
Diop, among other things, signed a memorandum of understanding with the Government of Jamaica for the IFC to act as adviser on a portfolio of 10 major PPP projects valued at US$2 billion and due for execution over several years.
These projects cover a number of critical sectors in need of development such as water, roads, energy, and broadband Internet but also in areas such as oncology services, which could boost medical tourism in Jamaica.
Diop said with the Jamaican economy now stabilised, the country is in a position to attract investment for more growth.
“If you look at the wonderful job that the Government has done with the leadership of Minister Clarke in the Ministry of Finance in bringing back stability, there is more than five months of imports in reserves, inflation around six per cent its a totally different picture than it was in the past,” said the IFC boss.
With Jamaica in the proximity of the United States, Diop says there are great possibilities for nearshoring with more companies there than is being done currently.
Jamaica already has a large business process outsourcing sector, also referred to as the global services sector, with more than 50 companies operating in Jamaica, employing more than 50,000 persons.
However, Diop believes that with the right workforce, Jamaica could attract more companies in accounting, auditing, business consulting, and medical services.
“One example is medical tourism, which is why we are talking about PPP areas such as oncology. There are non-communicable diseases which are affecting the ageing population in the United States for which the services could be nearshored here. It is less than a two-hour flight from Miami to come here for your medical treatment or surgery and to go back,” Diop noted.
“When we are looking at better-quality jobs, that’s how we need to think. It requires targeting in those areas where there are identified needs so that people can look in the direction of Jamaica (for investment),” he said.
In recognising Finance Minister Clarke for his work, including Jamaica’s removal from the Financial Action Task Force grey list earlier this year, Diop said the type of investments possible today would not have happened in the past.
“People would not come to a country where inflation is so high or where people could not import a lot of related goods (for their businesses) because the reserves are too low. But now, with the conditions in place, we are able to do that (make the investments),” said the IFC head.
Diop said his visit to Jamaica at this time had much to do with the country’s improved economic conditions.
“It is not by chance. I worked in Latin America for seven years,” he said.
The IFC head left Jamaica for Rwanda on Wednesday.
English (US) ·