Stop the world, I want to get off: Jamaica better love China, because it loves us all.

Jamaica got another reminder this week of how the modern world works. We saw the unwrapping of a spanking new highway, linking the north and south of the island, which had been completed by Chinese investment. We have lots of signs of that in the island, especially on roads and soon we will have more if the whispered contract to develop a logistics hub goes ahead as whispered. We won’t get into the political spinning of “gifting”. We know free lunches are only on February 30th.

That is what China has been doing across the world for a good few years now. China’s population and land mass are so large that they scare the bejeebers out of most counties. It’s phenomenonal pace of economic growth, averaging 10 percent a year for the past three decades, has allowed it to do that. It has the world’s largest balance of foreign exchange reserves and also the world’s biggest appetite for materials to build its economy. Hence, it has funded investment in many places where it needs minerals, especially in Africa. Jamaica has some of those valuable minerals too, but China has put its footprint down differently here, choosing to help develop infrastructure. Now, I’m not going to discuss the geo-political rationale for what China is doing here. My basic point is different. People in Jamaica may feel swamped by things Chinese, but pop another spoonful of Maalox.

China is the world’s new investment kid on the block. We get sort of frothy at the mouth in Jamaica about the Chinese presence because we are very small and they are very large. So, we get ‘small man syndrome’ or the ‘Napoleon complex’. To boot, we know we are small and it’s usually called upon as we beat the living daylights out of some opponent. “We likkle but we tallwah!”

But, our history of Chinese involvement in our lives is a bit different. Chinese indentured labour was brought here and in a short time after they were not indentured, the Chinese Jamaicans started to run the Jamaican economy, with stores, initially, but then in many other areas, especially food. That influence is still huge, though blurred by corporate structures and names that do not appear eminently Chinese, such as Juici Beef or Tastee. What, they’re not…?

But, we are not even a blip on the Chinese investment radar screen. In 2013, Chinese investment in US companies doubled, to US$14 billion. This spree was driven by large-scale acquisitions in food, energy and real estate, and was done mostly by private companies, rather than state enterprises, as in the past. It’s no real wonder that when our new highway was opened by the PM this week, we could be mistaken for thinking the road was in Shanghai, for all the red dresses, Chinese writing, and serious absence of black, gold and green. Independence gift? Tek weh yuself! But, that’s how the world is bring repositioned.

In addition, we know that Chinese bond holders prop up the enormous debt of the USA, the size of which is so many times that of most economies.

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Though, the graphic is out of date, it tells a clear story. The world is China’s playground, and we and our region are far from being its main interest, which remains much closer to home, in Asia and Australasia. So, hold on to your knickers.

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Don’t mess with dissing China, learn to embrace it. Uncle Sam can talk all he wants about abuses of human rights spearheaded from Beijing. We hear cha-Ching–and that’s not meant to be a racist alliteration. If the US or others want a place in our hearts, do more than flood the airwaves with awful sitcoms and cardboard food. Put leather on the ground and sweat on your shirt, and come dig up some dirt. Why does Puerto Rico look like it does? That island is slightly smaller than Jamaica, and has a slightly larger population. But, its GDP is about 10 times that of Jamaica’s, and per capita is about seven times ours. Just check that flag.

IMG_1290.JPG Another accident of nature?

Well, we are independent, so let’s get on with what that’s given us. On three, “Eternal father…”

Whose country is it, anyway?

Late yesterday evening, I posed someone a question: Who’s really relevant to Jamaica, its politicians, foreign governments, foreign private investors, IFIs, domestic investors? If you answer that question, certain things become clearer. My basic point in my own head was that Jamaican politicians have made themselves less relevant to Jamaicans since Independence, except through the ‘favour system’ of passing through other people’s money, and that this is largely the result of rank mismanagement of the country. I went to bed tired after posing that question.

I can’t marshal all the data to answer the question precisely, but I think I have a good impression of how it shakes down.

Politicians have been given the local mandate to rule the country, and they have taken that and played with it in many ways that people could say are unpatriotic, favouring their group and friends over the nation in many instances. Stop me at any point, if you think this is garbage. They have not come forward with solutions to problems that can be seen as universally neutral in their impact, preferring often to side with those of the same political stripe. To my feeble economist mind, that must always have given the country at most second-best solutions.

Anecdotally, people will look around the country and lament the decline of local companies, taking this as a sign that foreign investors have taken more control of the economy. Local company names do not mean local ownership and control, and we know that many famous national companies are now in the hands of foreigners. I say that with no pejorative slant to the observation. Others may look at this as a very bad thing, and some will even be openly xenophobic about this. So, Trinidad is on the radar for some vile remarks, as their nationals own and operate many once-Jamaican companies. We know that other nations are in the business of controlling business in Jamaica. Right now, we are seeing a makeover of gas stations: Shell (Dutch-owned) is no more, after some nine decades of dominating local gas tanks; their stations are now to be covered in the colours and logo of Rubis (a French company).

People will look around at the swathe of major infrastructure investment projects and see the presence of Chinese investment, notably in the shape of the Chinese Harbour Engineering Company (CHEC),who are in charge of the Jamaica Development Infrastructure Programme (JDIP), ‘intended to be the catalyst behind the revitalisation of the country’s roadworks and bridges’. I have no grouse with that company, and have recently been in their company several times a week, as they are doing pipe and road construction work near a golf course where I play. I see lots of Chinese workers carrying equipment and talking to Jamaicans, smiling and loving the fact that they are spending each working day in the Caribbean sunshine. I don’t know which of them may be forced labour–that’s China’s policy figure out. But, it was notable at the weekend, how some people saw this presence. “We soon see lots of Chinese-black babies,” a lady said to me on Sunday, as we played a tournament and lots of bronzed Chinese men crossed our paths. She was just making a straight-forward point; no sense of fear in her comments. But, for some, that is a threat. In The Bahamas, where Chinese money and staff are building a massive new hotel resort complex, Baha-Mar, people have expressed fear of being ‘swamped’ by the Chinese. Admittedly, the Bahamian population is very small, and New Providence does not have a large indigenous group of Chinese living there. Jamaica, on the other hand, has had Chinese people as part of its population for the best part of 200 years, and Chinese talent and investment have done enormous things to build the Jamaica we know and love. Think food industry, say, and Jamaican Chinese influences are all over it. But, CHEC is different. We may be in for much more of their influence as they are the preferred developer of a transshipment and logistics hub. Chinese investments are already in mining and are due to expand according to reports, yesterday.

We see the Spanish in tourism. We see the Americans, Canadians, and Russians in mining. British influences are still there, though less. We have the French in the form of Total and their gas operations. Most of us know that Jamaica is not owned by Jamaicans.

How much do foreign companies call the tune? I am not going to try to answer that, but pose the question. The fact is that elected politicians cannot go around randomly endangering foreign companies and the investments that they have in place. Jamaica is not a country that has gone in for forced nationalisation or putting foreign investments under threat.

What about international financial institutions? Well, many would say they have Jamaica by the proverbial ‘short and curlies’. We have debt owed to these agencies and make up a large part of Jamaica’s 140 percent to GDP debt overcoat. Most of Jamaica’s debt is now domestic, about 60 percent. Foreigners are owed the rest, and about half of that is to bilateral or multilateral agencies. While that may seem small, it comes with enormous leverage because much of it comes with tough conditions for disbursement and the almost unavoidable need to repay. The multilateral ‘musicians’ make Jamaicans dance a jig and jump high and bend low. Many Jamaican say they don’t like this. Most disliked of all is the IMF, who tend to have a lot more leverage because other agencies need to see that the IMF is happy with a country’s economic policy before they will lend, and if the IMF says things are going off-track, then these other agencies will turn off the money spigot till things get back on the rails. The bliateral agencies can more or less suit themselves, though they are often prudent and want to see that they do not support what others have deemed not yet ready to be supported because of some economic mismanagement. Protecting tax payers’ funds is not to be taken lightly, and the bilaterals may even have conditions that are very tight and subject to rigorous oversight at home. It’s been very interesting in recent days to watch how Jamaica was skipping along and then slipped on a banana peel thrown their way by the Inter American Development Bank, which did a sort of ‘No way José!’ over financing a power generation project. “Que?” said the minister in charge; asking if the stringent procurement policy rules that the institution followed were really binding. “Si, señor!” The rest is recent history. So, the IFIs would be something that Jamaicans can understand–the debt to them is little but it tallawah. Anyway, let’s smile that for the moment, Jamaica seems to be making the most important one, the IMF, happy. The World Bank has just put a big smile on with a new lending program. I’m sure that, with the large range of things that they finance, the IDB will soon be grabbing Jamaica’s hand again to do a salsa. Nevertheless, the power of this group is enormous and has grown because Jamaican politicians have not been able to tie their shoelaces properly and keep tripping themselves up when trying to keep the economy on a good path. That’s the price for economic failure that the world has imposed. If you don’t like it, jump off at the next stop.

What then of domestic investors? They are not the same as local voters–they really matter a lot. Whether they are buying government bonds or putting their cash into physical structures, the local investors are not insignificant. They are not all the same, and I will gloss over the differences at the moment. What was also interesting this weekend, was how this group also had a big say in the shaking out of things in the energy sector. They are important partners in developing the country and found that they have big muscles to flex. They walked away from the Energy Monitoring Committee and said they wanted government to shape up. In a nutshell, government suggested that it will shape up. We can look back at the preceding week’s debacle–that a lot of debacling in a short time–over a proposed bank tax as another power play by domestic investors and their agents, because they were going to be hurt on several fronts if tax payments for withdrawals became effective. So, let’s say that these matter a lot.

So, for all that voters (in their roles apart from investors) give the political mandate, they are not the ones who matter the most. Yes, they can complain about the mess of water supplies, or the cost of electricity, or the problem of getting a bus to work, or the constant problems of praedial larceny, but how much do they move the SS Jamaica? I would say not that much.

So, if the politicians have had their leverage lessened by the claims on them from those non-voting entities, who do you think is more likely to help effect meaningful change in Jamaica?

Wok this way

The general population often make fun of public servants. Think of some negative sentiment–time wasters, pen pushers, etc.–and it will often be tagged onto those who do the bidding of government. I like to think that I can think, so I am wondering why the minds of some of our public servants and the politicians they serve don’t seem to want to do any yoga.

Jamaica’s Minster of Tourism has just announced that soon Chinese tourists will be able to visit our sun-soaked isle, and stay for 30 days without visas. The rationale given included:

  • China’s “potential for growth as a tourism source market for Jamaica”.

China is now the largest spender in international tourism, but Jamaica has had difficulty in achieving “substantial growth in Chinese arrivals, as many Chinese citizens have had to travel great distances simply to obtain a visa from the Jamaican Embassy in Beijing“. Wait a minute! This is the 21st century: information superhighway and all that. Why are we forcing Chinese people to travel to Beijing?130517141050-china-tourists-hong-kong-camera-story-top

Yes, it’s common sometimes to have to go in person to a consular office. But, other options exist, such as visa applications by mail or over the Internet. The actual visa may still be an endorsement in the passport or may take the form of a document or an electronic record of the authorisation, which the applicant can print before leaving home and produce on entry to the host country. Why can’t we have that option? Or, are we just wanting to do all we can for Chinese potential visitors?

The US State Department gave me the pleasure of spending 90 minutes recently on a computer to renew my visa, and uploading the picture alone took a good 15 minutes, including having it rejected for being too dark (hey, my skin is not pale). Why deny potential tourists such pleasures? Or, just let them boost internal travel in China.

Or, we could treat China like little Andorra (population 78,000), and let them get visas at the port of entry. True, all of Andorra could fit into Jamaica and not be noticed, but I suspect a worry about a tidal wave from the ripple of 1 billion Chinese people may be lurking around.

I honestly don’t care if visitors to Jamaica come from Timbuktu, or Wanganui, or Banjul. But, I’d like to think that government moves in a way that seems neutral and logical to the outsider and the insider of the country. Is it just the potential foreign exchange rather than the cultural exchange? Jamaica had already done the same for Russia. Jamaica’s embassy in Moscow is a nice little trek across the steppes from Siberia. So, the distance and hardship argument could apply there, too.

Interestingly, countries that are deemed ‘friendly’, such as those in the British Commonwealth, usually have no need for visas to visit Jamaica. That is, with the exception of Nigeria. I can only wonder why Jamaica would mete out such discrimination to our fellow Commonwealth brethren 🙂

So, it’s all about the Benjamins, baby. China, in 2013, recorded 72.5 million outbound trips for the first three-quarters of 2013. Chinese tourists spent US$102 billion abroad in 2012. Only 2,420 Chinese tourists visited Jamaica last year. What should yuan do?

 

Branded Jamaica

If I believe what I read yesterday, I would think that some Jamaican musical artiste is “appalled and disappointed”. Reports indicated that her appearance at the Rastafesta event in Canada has been cancelled. imageQueen Ifrica has been engulfed in a public firestorm since she used her moment on stage during Jamaica’s Independence gala to denounce homosexuals. Significantly, the Ministry of Culture, which put on the event, was not amused: it issued a statement where it regretted that an artiste had used the platform “to express her personal opinions and views on matters that may be considered controversial, rather than to perform in the agreed scripted and rehearsed manner”. She is, of course, entitled to her personal opinion, but should she have used her own time and space to do that, rather than at a government-organized public event?

Russia found itself recently in a similar swell of international disapproval because of its policies regarding propaganda supporting homosexuality. Russia is entitled to make whatever policy it wishes, but how did its views sit with athletes who have to visit the country to compete in the World Championships last week and what happens if they engage in the banned propaganda? The matter
takes on a different tone when Russia hosts the next winter Olympics, and its policies are set against the Olympic ideals of friendship, fair play, and solidarity.

Both artiste and country might have fallen on the same thorn, homosexuality, but similar controversy has faced others over other touchy issues. In the USA, those for or against gun control or abortion, for example, have had their views assessed and been forced to reconsider. China has found itself facing international condemnation of its human rights records. Years ago, South Africa’s apartheid policy was a hot potato.

In the Caribbean, I remember Barbados’ prime minister banning Jamaican dance hall artistes, Movado and Vybz Kartel, from visiting the country in 2010, citing concerns about consequences from their violent lyrics. Also Vybz Kartel was banned in other Caribbean due to his profane lyrics. Time was when Rastafarianism was vilified as both a religious and cultural movement in Jamaica. But, isn’t time a wonderful healer.

One simple modern truth is that you cannot hide in this world. Modern technology now puts any seemingly obscure event into the eyesight or earshot of the whole planet. A policeman beating a suspect. A politician saying something offensive. A burglar creeping through a window. All are now easily captured as images and sound, then shared. That wasn’t Queen Ifrica’s problem, but she seemed to forget that her provocative comments would be seen and heard, not just in little Jamaica, but also in a bigger country she was about to visit, and worldwide. Canada has a more-liberal attitude toward homosexuality and someone should have suggested to Queen Ifrica to hold her comment till after the rasta gig. Maybe someone did but she couldn’t resist the rush of excitement on stage in front of 25,000 spectators. I wonder if she had planned to give the same anti-homosexual message in Canada; we may never know.

Whether Jamaica realizes it or not, it has a multidimensional image in the rest of the world. Sure, it’s great to be known for producing fast runners like rain. We love to be loved for our music. But, the world knows us, also, for a range of less-flattering traits. All the recent talk about ‘brand Jamaica’ and whether that would be tarnished by revelations of failed drug tests by star athletes did not tackle the prospect that Jamaica has many brand marks. One brand is its violence: that is why some countries give their citizens severe warnings about personal safety when visiting the island, and why all-inclusive resorts are popular. “Jamaicans are violent. Beware!” The message is clear. Tourists are warned about driving on our roads: “Jamaican drivers are dangerous and reckless.” The message is clear.

Another brand is that the island is a drug paradise. Tourists may believe that smoking cannabis is legal and that they can get away with toting a spliff. Sorry! Jamaica tries to correct that image, but, I suspect the message is lost.

Jamaica is branded an economic failure. Some will try to contest that view; others will say only the blind cannot see it. The fact that we are trying anew with an IMF arrangement is clear enough to me.

One more brand is the country’s anti-homosexual stance, often seen as uncompromising and very violent. This is not something to deny, but it’s also something that the rest of the world seems to lie less about the island. We are not alone, but we are renowned.

Queen Ifrica could have wanted to promote that last brand. Was she naive to do so just before a gig in a country with a more-accepting philosophy? Canadian reactions shouldn’t have been unexpected. Perhaps, the adverse Jamaican reaction was novel. Did she, who seems so wise in her social and political observations, just lose the plot? I wonder if she’s getting ready to assail us on other dislikes she harbours. Watch out politicians. ‘Don’t cry, Mr. Bunting’ may soon seem like a nursery rhyme. Look out media moguls. Watch out other fans. Will the Queen call out at her next Jamaican concert those who bleach their skin? The mouth is ready to bite more hands that feed it? Why don’t I think so?

Jamaican ambassadors, formal and informal have their hands full trying to present their country at its best. I don’t know whether Usain Bolt has had to field questions on all or some of these brand images. Maybe the PM, on her recent jaunt to China, has had her ear bent. Did Canada’s High Commissioner to Jamaica have a word with the Ministry of Foreign Affairs in private or formally about how our Queen may be seen as an unwelcome guest?

Just as a brand may sell well, so too may it be taken quickly off the shelves. Sponsors running away from brands is often a bad sign. Tell that to the athletes. Who’s running to buy brand Jamaica? Who’s getting ready to clear us off the shelves?