This is going to be a quickie, as I journey through the landscape of modern Jamaica to touch notable qualitative differences since Independence. I’m not going to list the many changes in financial markets or institutions that have happened in Jamaica over nearly 60 years.
The quantitative aspects are clear in the number of banks, financial institutions, ATMs, points-of-sale machines, mobile money apps, opportunity to use payments other than cash, etc. For many, however, that quantitative expansion means little because they argue (simplifying) that ‘dem all a thif’, meaning the perception is that big money (sizeable profits) are being made off the humble citizen, but in return the society gets a hodge-podge of dysfunctional situations. Again, I wont list or try to explain those here. Enough stories abound about cards being eaten by machines, through accounts being cleaned out our closed without notice, through mystery or failed transactions, through unfathomable bureaucratic hoops to opening accounts, through… Many people have a poor relation with financial institutions. So, net, the quality of experiences tends to be negative. It needs to be fixed, and if we wanted to see a lightening rod for disgruntlement in Jamaica just mention banks and their service. Just a few months ago, Justice Minster, the Jamaica Gleaner qouted Delroy Chuck as saying ‘Banks operating in Jamaica are providing some of the worst service to customers,’:
“I say to these establishments, at this time, with business improving, spend some money, nuh, and increase the staff. It’s not fair to the customer that he comes to spend his money and he has to wait half an hour. By that time, he’s so hungry and wants to go elsewhere. I say the same to the banks. The banks are making billions of dollars and providing some of the worst service in the country,”
But, what has happened in the process is that many more Jamaicans have been exposed to financial transactions that were never there or possible for them in the early-1960s. Yes, finance has changed, but the country has not lagged so far behind that we can honestly say that Jamaica is some sort of financial backwater. We now have a buzzing Stock Exchange—and I am not going into what it’s trends may mean. We now have opportunities for those who want them to invest in local and foreign currency assets. Yes, it’s true that institutions dominate many markets; they have deeper pockets by design. So, that’s not a battle to fight. What’s true, and becoming truer in the past couple of years under the current government’s desire to divest, is that the smallest investor now can find a space. This is not a new playbook as far as I am concerned, because I recall well the UK government under Margaret Thatcher putting public corporations into the hands of the public through privatization rather than keeping them nationalized, as the Financial Times headlined Privatisation defined Thatcher era. It was the first opportunity for the majority to invest in stocks and shares, and use savings to own private assets directly, rather than public assets say through things like Post Office savings accounts or Premium Bonds. It was my first foray into that world; I still have some of my shares. As with any financial transaction, some wanted to be in for the hold over the medium- to long-term, others wanted to see if they could profit from a quick bounce. Some got burned either way. Some won either way.
But, Jamaica is seeing this sell-off of public assets as only a part of a bigger set of opportunities to invest directly (rather than through funds) as companies make initial public offerings (IPOs), or ‘come to market’ for the first time. IPOs tend to excite investors, not least because of the novelty of a company opening itself to new investors, but the tendency for excess demand means the initial price is boosted once the IPO is over and the new shares are listed. People love the chance for a quick profit, and many feel ‘clever’ to be able to sniff out these chances (which are not guaranteed). Inevitably, we also see behind that speculative behaviour (description, not value judgement) greater risk-taking in the form of say ‘leverage’ (ie borrowing to invest). This has happened in many countries and been the source of serious personal and systemic financial problems.
I’m not going to tell my friendly neighbourhood financial market supervisors how to suck eggs, but I hope they are doing their due diligence and watching how the rush of people trying to get their stake of private equity in play is being fed.
My concerns tend to go towards the fact that Jamaicans (not unique) have a penchant for ‘get rich quick’ schemes (Ponzi schemes, scamming, flipping house purchases, pyramid selling, etc). When people feel the pressures to raise their living standards fast and it cannot be done gradually they tend to go towards certain avenues. Let’s say it’s human nature. Yes, significant numbers will see real gains and maybe urge others on, who may or may not understand what they are doing, and make simple but costly mistakes. The general outcome is often that the ‘graveyard’ of failed investors is far fuller than that for successful ones.
So, there you have it. Jamaica is a richer (no pun) financial landscape now than before Independence. More Jamaicans are getting wealthy through financial dealings. More people who may be deemed ‘poor’ have opportunities to get rich through such routes, legally, and faster than say from tilling land or selling panties. Young and old can take their chances, so can men and women, almost equally. You don’t need Internet access, but it often helps, as does a working telephone. Good luck!