Foreign direct investments (FDI) into Jamaica hit a five-year high of US$567 million in 2013, as investments into the country continue to recover from the late 2000s global economic meltdown.
According to data released by the Economic Commission for Latin America and the Caribbean (ECLAC) yesterday, Jamaica primarily benefited last year from Chinese and tourism-related projects.
“China Harbour Engineering announced a US$1.4 billion project to build a new port on Goat Island, to tap the opportunity afforded by the expansion in the Panama Canal,” ECLAC said of Jamaica.
“Sagicor of Barbados acquired and upgraded the Jewel Paradise Cove Resort and Spa, while Playa Hotels & Resorts (United States) purchased the former Ritz-Carlton in Rose Hall to refurbish, and Blue Diamond of Canada purchased Breezes Negril for an unknown sum,” the report continued. “A new Courtyard Marriott is also being built at a cost of US$22 million.”
Investments in business process outsourcing (BPO) and banking were also cited by ECLAC as having boosted Jamaica’s FDIs in 2013, which were 16 per cent higher than the year prior.
In the field of BPO, US company Sutherland Global Services opened a centre in Jamaica in December, which will ultimately create some 3,000 jobs. Royal Bank of Canada (RBC) withdrew from Jamaica and sold its assets to Sagicor for some US$85 million, the report highlighted.
Despite the increase, FDI flows into Jamaica are still well below the annual average over the previous decade, which stood closer to US$700 million. Jamaica had a record inflow of US$1.4 billion in 2008.
The 2013 report was presented yesterday at the United Nations organization’s headquarters in Santiago, Chile. ECLAC is a UN-affiliated body.
The wider Latin America and the Caribbean region recorded a historic high of US$184.9 billion in FDI inflows for 2013, five per cent more than 2012.
“FDI towards the region has grown steadily since 2003, with the exception of 2006 and 2009, although in proportion to the size of the economies it has remained practically stable since 2011. This growth has been sustained by an increase in domestic demand and high prices for commodities exports,” said the report.
Dominican Republic, the Caribbean’s largest economy, correspondingly attracted the most amount of FDIs in the sub region in 2013. According to the report, there was just under US$2 billion worth of FDIs in the DR during the year, a significant drop from the 2012 figure of US$ 3.1billion, which was heavily influenced by the acquisition of Cervecería Nacional Domincana by Anheuser-Busch Inbev for US$1.2 billion.
Trinidad & Tobago did not have data for the fourth quarter of 2013. The twin island republic reportedly received inflows of US$1.9 billion during the first three quarters of the year compared to a 2012 figure of US$ 2.5 billion.
The role of FDI in the Caribbean rose significantly in the 1990s, when many state-owned assets were privatised and many sectors, which until then had received little FDI, were opened up and deregulated. It held steady in the 2000s, before starting to trend upwards since 2010.
In particular, in the larger countries of the Caribbean, such as Trinidad and Tobago and Jamaica, the total FDI stock is as high as 80 per cent of the economy.
Job creation is also a significant feature of FDI in the Caribbean, especially where tourism-related activities are the target of the investments.
ECLAC estimates that,for each US$1 million of investment, six jobs are generated in countries such as Bahamas, Barbados, Belize, Haiti, Jamaica and Saint Lucia.
Source: Jamaica Observer
Published Date: May 30th, 2014
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