(Jamaica Observer) Jamaica will find it difficult to attract direct investments from Japan if the island fails to curtail its crime problem, says Japanese ambassador Hiroshi Yamaguchi.
According to Yamaguchi, theft and security are two major factors considered by Japanese companies when looking for possible overseas investments. And despite Jamaica’s improvements on security, Yagamuchi said the country has still not alleviated crime to adequate levels.
“I must emphasize here that Japan’s investors will not consider investments wherever they think they are in danger of safety and security,” said Yamaguchi at the Mayberry Investment Forum at Knutsford Court Hotel on Wednesday.
He added: “They always compare the safety situation of potential investment candidate countries with that of their homeland, where they have been enjoying one of the safest business climates in the world.”
Yamaguchi explained that removing the security threat will help local companies and overseas investors, as it will reduce their overall cost of production and increase their competitiveness.
His comments coincide with a spike in crime that has gripped Jamaica, with police year-to-date statistics showing that homicides are up by 20 per cent compared to the corresponding period last year.
What’s worse is that foreign direct investments (FDIs) inflows to Jamaica declined by over 60 per cent to US$201 million in 2010, hitting a 14-year low.
Japanese investors in Jamaica currently include Ueshima Coffee Company (UCC), the largest marketer of Jamaican Blue Mountain Coffee in Japan, which began operating on the island in 1981 with the Jamaica UCC Blue Mountain Coffee at the Craighton Estate in Irish Town, St Andrew. The other major investor is Marubeni Corporation, which purchased an 80 per cent stake in Jamaica Public Service Company (JPS) in 2007.
Yamaguchi said that while interest in the Kingston port or Caymanas Economic Zone is unclear, Japan’s private sector has a lot of interest in infrastructure projects that include power generation. He said this was revealed during a visit to Jamaica by a Japanese trade mission last November.
“Probably for the first time in our nearly 50-year bilateral history, executives from big giants like Marubeni, Hitachi and Fujitsu, in addition to officials from the Ministry of Foreign Affairs and the Ministry of Economy, Trade and Industry of Japan, received presentations from JAMPRO and toured prospective investment sites across Jamaica,” noted the ambassador.
Minister of Industry, Investment and Commerce Anthony Hylton listed among Jamaica’s strengths as an investment location, the country’s large English-speaking population; competitive wages; developed infrastructure and its proximity to the US and Panama Canal.
“Jamaica remains an attractive destination to business process outsourcing and has emerged as the leading contact centre location in the English-speaking Caribbean, with over 10,000 full-time agents in the sector,” said Hylton.
The recently appointed minister stated that his commitment to tackling major impediments to FDIs such as crime, corruption, taxation and high cost of electricity.
“These represent supply-side factors in the business environment which have a significant impact on cost, risk and uncertainty,” noted Hylton.