Jamaica woos US business investment
US businessmen are being reintroduced to the idea of investing in Jamaica. And it appears to be an idea they like. Jamaican Prime Minister Edward Seaga appeared pleased with the reception he received from American businessmen during a tour of US cities as part of his effort to revive his island nation's economy.
"We now have on record over 300 investment intentions totaling in excess of 1 billion Jamaican dollars," Mr. Seaga said at the end of the tour last week. "Only a fraction of that will materialize, but more are coming in daily to take the place of those that don't materialize."
Seaga has been negotiating intensively for American investment since October, when his Jamaica Labor Party soundly defeated the leftist-leaning People's National Party of Michael Manley, who had courted Fidel Castro and lost American business confidence. Jamaica has become a focal point for the Reagan administration to show Caribbean nations that reliance on American capital provides more economic gains than President Castro's ideology.
During the past month, the prime minister visited New York, Chicago, Houston, Minneapolis, and Tampa with his party's minister of industry and commerce and minister of tourism.
"We have to build back the bridges of good relationships between Jamaica and the United States which over the past few years have become very shaky," Seaga said. "We have done this with a deliberate strategy of building bridges to the main centers of industry, commerce, and finance."
But Seaga is also looking toward smaller, growing industrial centers such as Tampa, he said, because those are the cities where American business is expanding and because the economies of scale in those areas are more in line with his nation of 2.2 million people.
Since the October election, Jamaica's economy has stabilized, he said, and the rate of inflation has fallen from more than 30 percent a year to less than 1 percent during the past five months.
"We have been able to mobilize financing that is necessary for enabling the government and the private sector to operate throughout this year with very little of the stops and starts we had experienced over the past few years, when, as a result of running out of money, there were shortages, outages, and stoppages of various sorts," Seaga assured American businessmen.
His government is looking for companies willing to form joint ventures with Jamaican concerns. Such ventures, he hopes, would improve the island's citrus, tobacco, light electronic, furniture, and garment industries.
"In our strategy of attracting industries to Jamaica, we feel that those industries with high labor-intensive content are the ones most likely to have an interest in setting up offshore production in Jamaica," Seaga said. "The form that we desire most is the joint venture which guarantees a continuing interest on both sides. . . . On that basis it is an equitable marriage, with one partner bringing technology, capital, and sometimes markets, and the other one providing local resources and local know-how."
Seaga's government has created a divestiture committee to sell back to private owners the businesses that Mr. Manley's government had purchased. Intense interest has been shown in the sale of eight hotels, a Jamaican official said. But with the price of sugar so low on the world market, few bids have been made for the eight sugar plantations the government owns.
The success of Jamaica as a model for the third world depends on the continued flow of capital from the United States, Seaga said. "The resource base of the English-speaking Caribbean countries is too narrow for the pace of development to provide for the standards of living which would make our strategies of development successful and viable models," he said. "In order to increase our resource base, capital has to flow from the outside . . ., and some of that has to be renewable capital that does not have to be found again every year."