Support local businesses – buy Jamaican!

Author : teriann

Recently there have been some stirrings in the media as consumers were encouraged to focus on buying Jamaican products. I wonder just how many of us are doing this and supporting our local businesses.

Local Fare in Supermarkets

A quick visit to one of our local supermarkets reveals that a lot of the products we buy are not made in Jamaica. True there are Jamaican products on the shelves but they are not often the most popular choice.

There was also a wider range of the products that were not locally produced. The local products were not really highlighted in any distinct way from the other products on the shelves. In fact, I must admit the packaging of some local products did not measure up to their rivals. There was also no stirring of national pride to purchase the products with the proud stamp of, ‘Made in Jamaica’.

Some might claim that there is a slight chance that although some of the products were made in various Caribbean countries they might have been packaged in Jamaica thereby purchasing them results in keeping Jamaicans employed. There might be some truth in that statement but the truth is a lot of consumers don’t even seem to care where their favourite product originated.

Price

The biggest factor for most consumers is the price. They simply chose the products that have the best price regardless of where it was manufactured. So if the local version of the product is more expensive it will be bypassed for its cheaper alternative.

Some consumers are connected with products because they are familiar with them, whether through advertising or family tradition. As a result, they purchase the same products without any real desire to change based on their pattern of buying.

Benefits of Buying Jamaican

Besides the obvious benefit of adding economic stability to Jamaican businesses, buying locally made products provides additional jobs and strengthens the investment potential of the country.

Buying locally made products means that more of the money that is spent on services and resources by a local-based company will in most cases stay within the region, providing a boost to other resident businesses, workers and families.

The currency also circulates more quickly, thus passing through more hands. So this means that more of the country’s people would likely have had the benefit of the money and its purchase in comparison to that of a foreign-based business.

So would you like to build the local economy? Then buy Jamaican!

Let me hear from you! Do you buy Jamaican products?

Teri Ann Renee Paisley

Gleaner Online Writer

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3 Responses to “Support local businesses – buy Jamaican!”

  1. JOHN ANTHONY says:

    We often in Jamaica make serious mistakes in reasoning
    by “starting in the middle instead of at the beginning of processes.” What happens then is we turn the concept of cause and effect upside down because a effect then become a cause leading to often undesirable effects. So for instance if one wants to make more money one does not concentrate on money, one concentrates on the things that lead to more money!

    Second the best way for companies to grow is to understand human nature and how humans think and make decisions. If there is a bus stop at point A then a salespersons places a stall near point A and not at point B!
    Remember that humans make choices often in their own self interest first. To spend less money for products is in the interest of consumers. To spend more money for something because it may may be providing some related benefit as local jobs, is against most consumer interest, and as a economic policy needs examining. First, the so-called local product may very well have been sourced internationally or parts of it may have been produced overseas. So the contribution to another country still takes place.
    Second, patriotism and charity are good but cannot be the way for a country to build an economy because when they are expensive against than alternatives they are against human nature. When you go
    contrary to human nature failure is certain eventually or at the least, success is difficult to maintain. Then imagine if all countries of the world had patriotic buy first policies? International trade would collapse leading to confusion and dis-array.

    A far better approach is what we need to look for and implement. But best policies need best efforts and best education and we have been trained to seek short cuts instead of best cuts and so buy first policies and ponzi schemes will always entice those who lean to short cut economics. Look at the most successful economies of the world and see how strong is their buy-first patriotic schemes? The US has a trade defecit with many countries! So what makes for a successful economy?

    The most successful economies are:
    1.The most educated
    2.Have the strongest family unit
    3. Concentrate on products in their competitively advantaged sectors
    4. Have strong international trade efforts
    5. Have sophisticated equity and debt financing markets.
    6. Have strong consumer credit systems

    Unfortunately Jamaica receives a F in four of these categories and significantly in the most important ones, 1 and 2!. This is why Jamaica struggles and yet few persons are willing to start at the beginning..PRIMARY EDUCATION. Jamaica is ranked #107 on the UN education index. Jamaica has a 85% out of wedlock birth rate. Most Jamaicans cannot name the products in which the country has strong competitive advantages and one sector TOURISM Jampro does not know how much of it is locally owned!

    Certainly a case may be made for buying first locally produced foods but the case should be made on something that contributes to the interest of consumers and the argument has to be phrased properly. Locally produced foods in any country are more nutritious and safer for consumers than imports. That is of interest to consumers so even if locally grown potatoes cost more in out of pocked $ they could be cheaper in safety and nutritious $s and there may be enough persons who this will appeal to.

  2. teriann says:

    Thanks for sharing John! It’s great you had so many interesting points to share. Keep visiting and commenting!

  3. JOHN ANTHONY says:

    Here is an expanded version related to economic growth

    WHAT MAKES AN ECONOMY GROW? THE ROLE OF THE EQUITY MARKETS. DID YOU KNOW THE IMF AND WORLD BANK INVESTS IN STOCKS AND BONDS AND GOLD IMF- 75.9 billion SDR worth?

    We often in Jamaica make serious mistakes in reasoning by “starting in the middle instead of at the beginning of processes.” What happens then is we turn the concept of cause and effect upside down because an effect then becomes a cause leading to often undesirable effects. So for instance if one wants to make more money one does not concentrate on money, one concentrates on the things that lead to more money! If a country wants the economy to grow then the country should concentrates on what makes economies grow not on economic growth; simple. This is the mistake Jamaica has made for decades – focussing on the effect instead of on the cause. So then the real question emerges; do we know what makes an economy grow?

    The economy grows when individuals and businesses succeed in recognizing new markets and new opportunities and accept the risks involved in pursuing these opportunities in the hope of earning income or persues old markets and opportunities with the hope of increasing their share of such markets and opportunities. Simple put; make / grow / or process products or services, sell them, make profits, invest and save some of the profits and repeat the same. So how many Jamaican companies have seen any mega-improvement in their market share over the past 40 years? Has the country concentrated on any new or old market with the same vigor has it has on its 15 IMF agreements? No. So it is quite clear that the country does not practically understand what makes an economy grow significantly. Imagine if all those short cut economists who invested in Carlos Hill had invested in the Jamaican stock markets and were now receiving dividend payments? The fact that so many Jamaicans invested in Hill’s Ponzi scheme but now are not in the stock or bond markets should be real serious cause for concern.

    BEST policies need best efforts and best education but we have been trained to seek short cuts instead of best cuts and so buy first policies and ponzi schemes will always entice those who lean to short cut economics. Look at the most successful economies of the world and see how strong is their buy-first patriotic schemes? So what makes for a successful economy?

    The most successful economies are:
    1. The most educated.
    2. Have the strongest family unit.
    3. Concentrate on products in their competitively advantaged sectors.
    4. Have strong international trade efforts.
    5. Have sophisticated equity / stock and debt financing markets.
    6. Have strong consumer credit and monetary banking systems.
    7. Have growing populations.
    8. Some have a natural geographical locational advantage.
    9. Strong entrepreneurial initiatives
    10. Have strong retirement / pension systems.
    11. Have strong legal decision-making systems

    Unfortunately Jamaica receives a F in five of these categories and significantly in the most important ones, 1 and 2 and an A in only one – geographical locational advantage! This is why Jamaica struggles and yet few persons are willing to start at the beginning – PRIMARY EDUCATION. We read and hear some of the most educated Jamaicans; Dennis Chung, Ralston Hyman, Damien King. Aubyn Hill etc seemingly do not want to admit that a dunce country cannot attain and maintain permanent economi growth. Jamaica is ranked #107 on the UN education index. Jamaica has a 85% out of wedlock birth rate. Most Jamaicans cannot name the products in which the country has strong competitive advantages and one sector TOURISM, the investment arm of the government, Jampro does not know how much of it is locally owned! Then how can anyone really wonder why the economy has not grown? Strange. If you build a house on sand what happens when the earthquake hits? When you build an economy on dunces what happens when a Carlos Hill emerges? Or what happens when the IMF announces that the dollar will be devalued? Because the populace is not sufficiently educated it has no idea what to do to hedge its savings. We remember Justice Forte complaining on her former radio show how the devaluation was eroding her wealth. Here is one of the most accomplished educated persons in Jamaican history and had no idea that all she had to do was go down to NCB Capital Markets open an account and buy shares of any company who earns revenues in USD or purchase shares in the USD eft, UUP. So then because the country is largely undereducated the devaluation destroyed hundreds of billions of purchasing power and not a single person spoke up. How devastating.

    If we look at Jamaica over the decades what is evident is that the country has divested or sold or not concentrated on some major competitively advantaged sectors and has tried to make a profit on competitively dis-advantaged sectors. The Air Jamaica fiasco is a classic of trying to make a competitively dis-advantaged sector profitable. The billions of hardcore dollars, not counting the man-hours, wasted on it if invested in simple pass-book saving accounts would by now be larger than the deposits in the NHT!

    Jamaica divested the management of its bauxite industry reserves to foreign companies because it did not have the education and expertise to manage the processes of mining, processing and marketing bauxite. Fine. But the country has never educated itself on the sector with an aim of directly getting involved in the industry. That is madness or has been madness. It could still have made far greater profits from the sector if someone in government was educated on the equity markets and their contribution to economic growth. As far as we know Jamaica has never owned any shares of stock in any bauxite company that invested in the local bauxite industry and why not? All the government had to do was to open an account in London or New York with Goldman Sachs, negotiate for stock options on any bauxite company wanting to mine and process local bauxite and place those shares in that account and use some of the bauxite levy income to purchase additional shares. Untold US billions was lost by not tapping into this. Dividend payments and stock price appreciation over the decades would have been worth US billions by now. So why did the government not do this? Simple. Jamaicans are grossly undereducated in the role the equity markets can play. China has shown how the equity markets can be used as a powerful force in growing an economy. Does anyone know how many public companies trading in the US, London, and Hong Kong are owned by the Chinese government? Two of China’s most successfully owned public companies China Natural Petroleum (PetroChina’s parent) – 2014 revenue = USD426 billion; Sinopec Group 2014 revenue = 446 billion, are both in a competitively advantaged Chinese sector – petroleum.

    On this year’s Fortune Global 500 list ninety-eight companies are based in China, including those headquartered in Hong Kong second only to the U.S., with 128 companies on the list. Fortune magazine

    Look how profitable the tourism sector has been. How many Jamaicans have ownership stake in the sector? This is complete madness! There is only two tourism companies on the stock exchanges and yet it is the strongest competitively advantaged sector in the island. What madness! While we have companies trying to compete in growing sorghum and corn when Jamaica clearly does not have the land scale or cheap energy to produce a price competitive product with countries that have cheap energy and vast lands suitable for growing such crops. It is quite true that a profitable company does not need to list on any stock exchange but why are there no Jamaican start up tourism efforts to raise JMD500 million to engage a joint effort in tourism? There are none because Jamaica lacks serious entrepreneurial capitalistic talents and lacks real practical education. I mean Carlos Hill’s ponzi scheme was so easy to decipher for what it really was and yet it seemingly concerns no one that so many locals were deceived by it. That alone proves that the country is largely undereducated and undereducated populations are easy to deceive. Perhaps this is an attribute that politicians do not want eradicated

    We opined years ago that the government should divest its 19% share of JPS by listing on the stock exchanges if it had to sell. The positives seem irresistible. Imagine the perfect hedge for consumers against rising petroleum prices and this is it. John Brown purchases 50000 shares of JPS which is a profitable company. JPS pays dividends. John Brown’s dividend payments are a partial hedge against increasing electricity bills when petroleum prices rises. JPS stock appreciates, then John Brown’s share value increases. He can sell shares or hold. JPS being a partial monopoly will always be a profitable company – these are the best stocks to own. Large companies that owns shares will thus be hedged against rising utility costs and thus would not necessarily have to pass as much on onto consumers via price increases. The government has positives too as profits from the transactions would filter in via taxes. We have never seen a more win – win-win scenario in Jamaica’s history.

    We find it incredible too that there is not an educational program in the high schools that lead to a CXC examination in investing and credit markets. How could this be? Yet there is talk of Garveyism and other “feelgoodism” subjects. What we envision is a subject based on investments and credit that covers the debt and equity financing and their markets and consumer credit management. Education is one best way to affect behavioral change. The converse is also true. Marlene Street-Forest has more work to do and she can do it. This woman alone has outdone the past three Jamaican Prime Ministers combined.

    We find it really curious that the IMF is partially negative on the Jamaican Junior stock market. A few years ago we criticized the IMF for not using derivatives to hedge itself. They listened.
    Read here; “Derivative instruments, including options, forwards, futures, and swaps, are allowed for the Endowment Subaccount but only for hedging operations authorized under the Rules and Regulations or to minimize transaction costs in the context of subaccount rebalancing and benchmark replication.” What does this means? Well while they criticize Jamaica’s Junior stock market with ridiculous unscientific, unproven comments let us see what the IMF actually does.

    “It shouldn’t be a surprise to you that we are not a big fan of giving tax incentives. The main reason why tax incentives typically don’t work, or from our standpoint why we don’t encourage it, is that it sometimes distort decision-making,” she said.
    Yhomo Hutchinson
    Uma Ramakrishnan, IMF mission chief to Jamaica.

    “And in this case, by leaving incentives for the junior stock exchange, it may dis-incentivise small firms from growing in order to keep the size small so that they can maximize on the incentives that they are getting.” IMF Mission Chief to Jamaica, Dr Uma Ramakrish-nan

    But let us take a look at one of the IMF’s own investment accounts;

    “pursuant to a strategic asset allocation benchmark that includes
    1. 20 percent in developed market sovereign bonds,

    2. 20 percent in developed market inflation-linked bonds,

    3. 15 percent in developed market corporate bonds,
    4. 10 percent in emerging market bonds,
    5. 25 percent in developed market equities,
    6. 5 percent in emerging market equities, and
    7. 5 percent in real estate investment trusts (REITs).”
    imf.org/external/pubs/ft/finop/2015/pdf/finop2015ch5.pdf

    Following of our serious critique a few years ago the IMF sold billions in gold reserves (yes the IMF invested in gold) to set up several seb-accounts to maintain or increase their portfolio performances and sizes. Investment in bonds make up a sizable portions and we would if find it incredulous that all those bonds are not based on some sort of underlying incentive, most likely tax incentives.

    The World Bank too does not give out all the advice that it follows. It has accounts with hedge fund Bridgewater Associates one of the largest and most successful hedge funds in the world. So the IMF and World Bank are using stocks and tax-incentive-based bonds to improve their accounts so they can stay in business to convince countries like Jamaica to cut back on their Junior stock markets? Huh!

    Do not do what the rich says just do what they do

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