Linda Hutchinson-Jafar, Business Writer

Shaw

Jamaica's Finance Minister Audley Shaw sug-gested greater co-operation and integration among Caribbean countries pursuing International Financial Centres (IFCs), with each country specialising in products it offers, based on its comparative advantage.

Speaking Thursday at the Caribbean Investment Forum 2008 in Port-of-Spain, Trinidad, Shaw said with more and more Caribbean nations looking at becoming IFCs, the question needs to be raised as to what kind of regional cooperation can exist to help countries maximise the potential benefits.

"Who knows? Once we have worked out the kinks in creating a streamlined, regional capital market, we can start considering the entire region as an IFC, with each nation specialising in the products it offers based on its comparative advantage. I think that is the appropriate thing," he said on the final day of the conference.

"Greater cooperation and integration between our capital markets may just lead the way to greater cooperation amongst regional IFCs."

Highest incidence

He noted that the Caribbean, as a geographic region, has the highest incidence of IFCs in the world.

Cayman Islands, Bahamas, Bermuda, British Virgin Islands and Barbados top the list in terms of the number of companies registered and the total value to operations.

The per capital GDP of the Cayman Islands in 2004 was US$43,800 compared to the per capita GDP of US$4,800 in Jamaica in 2007.

Following on the success of these countries and more recently, Antigua and Barbuda and St Lucia, both Jamaica and Trinidad and Tobago are exploring ways to enter the lucrative IFC market.

"I think what will be nice here is that Trinidad and Jamaica compete together in a friendly kind of atmosphere because we are the larger territories and we have much to offer," said Shaw, who also holds the portfolio for Public Service.

He told the conference that opportunities must also be found for persons in Jamaica who have graduated in studies related to insurance, banking and finance since they were facing hardship finding employment.

"Too many of them are graduating and looking for a visa to leave Jamaica, so we must find opportunities in order to keep our people at work," he added.

An environment must also be created for the Jamaican Diaspora, many of whom would like to return home.

Most sophisticated

Shaw described Jamaica's financial services sector as being the most sophisticated, well-regulated and robust in the Caribbean.

Jamaica's stock exchange has 44 listed companies compared to 32 in Trinidad and Tobago and 26 in Barbados.

He pointed out that Jamaica's financial companies have already developed cross-border trading expertise as the country has the most domestic companies that are cross-listed on regional exchanges, such as GraceKennedy, Jamaica Money Market Brokers, National Commercial Bank Jamaica, Capital & Credit Financial Group and Scotia DBG Investments.

An IFC in Jamaica, he said, would be a natural outgrowth of its well-developed and fast-growing ICT sector that already does back-office data processing and is a hub for international business calls.

"Not only do we have a strong financial industry with a relatively large and appropriately trained labour force, we also already have in place legislation and a robust regulatory regime," he said.

"The truth is that regime will have to see the necessary changes to accommodate the IFCs. We will be making those changes."

The blacklisting of several Caribbean offshore centres by the OECD in relation to tax evasion, according to Shaw, has pushed all countries in the region towards greater transparency and more effective regulation.

"The truth is, and we should accept, that an International Finance Centre should not be a synonym for lack of transparency."

In Jamaica, an anti-money laundering law, counter-terrorism financial framework, the proceeds of crime act and the banking act are already in place in Jamaica.

Jamaica also established the Financial Services Commission in 2001 to regulate non-deposit taking financial institutions.

Relevant

"I'll be taking certain additional steps to ensure that the FSC is even more relevant to the time. We are going to have to review laws concerning the accommodation of more investment products - mutual funds, derivatives, hedge funds - we have to create the framework that can accommodate even more dynamism in the financial sector," he told the conference.

Giving an update on Jamaica's progress towards their IFC, Shaw said a market assessment of the global IFC industry and an appropriate implementation strategy will end in mid-July with a detailed submission to Cabinet on the gaps that need to be filled and the steps to be taken prior to the centre's launch.

A sensitisation seminar is scheduled for the end of summer.

Phase two which will focus on the execution of the plan outlined in phase one will begin as soon as Cabinet approves the submission of the IFC strategy.

Phase three will focus on an aggressive marketing plan for Jamaica's IFC.

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