Having pools of capital that can be used to pursue opportunities is conducive to the country’s growth and development, says Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke.
“Our aim is to commoditise capital (and build) the Jamaica, where if you have a good idea or a good plan, if you have the energy in your stomach, the mindset and the nerves to take on the hard path of an entrepreneurial career, then lack of capital should not stop you. The fact that you don’t come from a family that has generational money shouldn’t stop you,” Dr. Clarke said.
He was speaking today (September 22), at the first ‘Sygnus Day’, hosted by alternative investment firm, Sygnus, at the AC Hotel in Kingston.
Dr. Clarke outlined that the Government is supporting a deepening of capital markets to enable a Jamaica where capital is commoditised and pointed out that the country’s long-term sustainability will be best achieved through a robust private sector, with the capacity to mobilise investments on a scale “that far exceeds the Government’s capacity.”
Commoditising capital speaks to the accessibility and affordability of funding, especially to small and medium-sized enterprises (SMEs).
“The key is to have an enabling environment where investment is attractive, where there are investment opportunities, where the Government doesn’t stand in the way of investment and (where) there are means by which investment can be mobilised,” the Minister explained.
He said that the Government has been pursuing policies that are conducive to this mobilisation of private capital in Jamaica, to build a robust medium and small business ecosystem.
Some of these initiatives have been the removal of distortionary taxes, bringing private assets to market and by reforming regulations to make the accumulation of capital more seamless.
Furthermore, in 2019, a reform was made to the pension investment regulations, allowing for pension funds and institutional investors to invest in private vehicles that are dedicated towards venture capital and private equity.
Additionally, through the Development Bank of Jamaica (DBJ), the Government is sponsoring the emergence of a venture capital fund with an investment of $750 million, as announced in this year’s budget presentation. There is also an SME private equity fund, incubator fund, innovation fund, accelerator programme and others, which were launched by the Government.
“The fact that you don’t have an auntie or an uncle you can call…shouldn’t stop you. because a Jamaica where that is the prerequisite for entrepreneurial success, is a Jamaica that will turn on itself. That is a Jamaica that can’t last. That is a Jamaica where the forces of resentment will tear it down,” the Minister emphasised.
With the successful commoditisation of capital, Dr. Clarke said that what will make a difference between emerging entrepreneurs is “your energy, your acumen, your passion, your character, your ability to bounce back from defeat.”
“That is what should matter and should be the only things that separate men and women, not the condition of your birth. And that is the idea behind our pursuits. But if the private sector is not built on a foundation where capital is commoditised then it can’t last, it is not sustainable. So, to make it last, we have to commoditise capital now,” he added.
In the meantime, Minister Clarke is encouraging entrepreneurs to place a strong focus on delivering risk adjusted, real returns to their investors consistently, over a long period of time.
“And if you do that, you have a government that supports the mobilisation of capital,” he said