Interview With Jamaica Business Journal Publisher Brent Williams

This month we interview, Brent Williams, the founder and publisher of the Jamaica Business Journal. Before starting a career in publishing with the Jamaica Business Journal , he was the Chief Financial Officer of a US$26 Billion division at Wells Fargo Bank in San Francisco , California . He attended Wolmer’s Boys’ School, and completed his formal education at the University of Michigan where he earned an MBA in Finance and International Business. Mr. Williams splits his time between Kingston and Fort Lauderdale , Florida . His interests include travel, reading, golf and spending time with his family.

1. Why did you start the journal?
I started the Jamaica Business Journal and probably for many of the same reasons that you started As a Jamaican living oversees, I always felt that insightful business information about home was scarce and hard to come by. My hope is that Jamaicans all over the world will first turn to the Jamaica Business Journal as a source for insightful and relevant business and investment information about home. I love the idea of being responsible for providing and sharing more information about Jamaica for Jamaicans everywhere.

2. Is your main place of residence Ft Lauderdale or Jamaica ?
Presently, my primary residence is in Fort Lauderdale although I have lived in various parts of the United States since 1988. I travel to Jamaica frequently for business and to visit family. The majority of the staff of the Jamaica Business Journal resides in Jamaica , and most importantly, all of the writers for the Jamaica Business Journal are based in Jamaica , so they have first hand access to and knowledge of business events and happenings in Jamaica .

3. Being in both places what do you think is biggest miss opportunity investment for Jamaicans abroad?
Well, I think generally most Jamaicans, when they migrate, become very comfortable in their new environment and it becomes difficult to focus investment attention back home. But, I believe that investment opportunities abound in Jamaica . For example, every month the Jamaica Business Journal surveys the banks in Jamaica and reports the interest rates that they are paying on US$ and Jamaica$ deposits. The rates are much better than what you might find in the United States , and Jamaican banks are much more stable and much more disciplined than they were in the past. I see very little risk of another financial meltdown as we had in the 1990s. These days, Jamaican banks are well capitalized, backed by larger companies, and stay away from businesses that they know nothing about. In fact, in many ways they are much more conservative than American banks, so the risk of losing your money is slim these days. Another missed opportunity for investment is real estate, especially on the North Coast . My cousin is an engineer who has worked on the North Coast highway for several years, and he tells me that the Montego Bay road is almost complete. Soon, you will be able to drive from Kingston to MoBay in less than two hours. With this improved infrastructure and access, property values between St. Ann and Negril will continue to go up. If Jamaicans stay away for too long, all of the best properties will be owned by foreigners and there will be nothing left to buy or develop. I encourage Jamaicans to jump in.

4. What should Jamaicans in the Diaspora invest in? How is the stock market in Jamaica similar and different from the US?
As I mentioned, I think that real estate is a very good investment in Jamaica . To keep the Diaspora informed, the Jamaica Business Journal has been doing parish profiles covering the infrastructure, development, and business environment in each parish. If a Jamaican is considering a return home to invest or set-up a business, I believe that we provide a good source for information about the goings-on in each parish. With respect to the stock market in Jamaica , it operates similarly to the stock market in the United States , so there are not many functional differences. If you want to invest in the stock market in Jamaica , you can contact a broker and they will buy or sell shares on your behalf, which is no different from the way it works in the USA . The Jamaica stock market appears to be fairly well managed, and there is the opportunity to do well if you invest wisely. After a protracted slump, overall the stock market has increased by over 7% over the past year, which is decent performance compared to recent history.

However, there are significant deficiencies in the Jamaican stock market that are worth mentioning. First, the Jamaica stock market is fairly illiquid. Simply stated, if you were to purchase a very large block of shares in a company in Jamaica as a financial investment, you would have a difficult time finding someone to purchase that large block of shares from you without your having to take a loss on the sale. In the United States, investors are able to purchase a large block of a company, and turn around and sell those shares later on for a large profit, simply because there are several other entities with the desire and resources to do those transactions. Second, Jamaican firms that are publicly listed typically are majority owned by one or two individuals who also manage the firm, so there is never the likelihood that if these persons perform poorly, they will lose their jobs. This generally leads to poor governance and a lack of accountability. I believe that Jamaican firms that go public should offer at least 35% of their shares for public ownership to alleviate this problem. This will increase the interest in the stock market and keep the managers on their toes. Finally, I believe that there is a lack of impartial investment information in Jamaica . The only firms that do investment research in Jamaica are brokerage firms, which are the very same firms that make money regardless of whether they give you good advice or not.

5. Many have argued that the Jamaican Government cannot sustain subsidizing too many industries etc. What are your thoughts?
I think they are correct. I generally believe that a government subsidy for any business is a poor idea. However, let us be clear, Jamaica is not the only government that practices subsidies. The United States government subsidizes farmers who grow wheat, corn, and other grains in the Midwest, but do not subsidize farmers in California which is by far their biggest agricultural State.

As far as Jamaica is concerned, the government has had such a poor record of managing its own affairs, that they are least equipped to decide what makes good business sense. An obvious example of this is Air Jamaica . Over the past 3 years, the international airline industry has recovered from the impact of the events of September 11, and is seeing unprecedented growth and profitability. Despite this fact, Air Jamaica is losing more money than it ever has. I believe that poor management by government appointees is the reason for this. Thankfully, the existing government has already concluded that the right course of action is to divest Air Jamaica . This does not mean that there will no longer be an Air Jamaica, but it does mean that it will probably be out of government control. There are other industries in Jamaica like agriculture that have suffered due to global events beyond the control of the small Jamaican business person. In these instances, the Jamaica government should focus on providing technical assistance, start-up funding, and financing concessions that will direct people affected by these global trends to industries and roles that they have a chance to be competitive in.

6. The forex market and other investment clubs are the talk of Jamaica the past 4 years. I won’t get into the controversy on an individual level as I believe the recent ruling by the courts will add more to the this debate. Let’s talk about the government. I have heard that some countries have used it to get out of debt. Do you think Jamaica should do this?
To answer your question, I have to address the question of whether I believe these entities are legitimately investing in something that provides the returns that they claim. I have written frequently about these ‘investment clubs’ in the Jamaica Business Journal , and it is my personal belief that these clubs engage in nothing more than using one persons money to pay another person a return, without actually investing in anything. Of course, I cannot prove this because these entities do not disclose audited financial information. It would be impossible for investment returns from these entities to provide the resources necessary to pay down Jamaica ‘s debt because I do not personally believe that there is anything of value behind them.

7. What about using the subsidies on unprofitable efforts to invest there?
I do not believe that anyone should be ‘investing’ in these entities, let alone the Jamaica government.

8. What is the biggest challenge of publishing a businesses magazine?
The challenges of the magazine are probably similar to the challenges of most other businesses. First you need to develop a good product, then you need to learn how to market, distribute, and sell the product. We have had challenges with all facets, as was expected, but the important thing is to learn along the way and not repeat mistakes that may have been made.

The good thing about the Jamaica Business Journal is that there is never a shortage of great topics to write about.

9. There is talk of a world recession. They and US say when the US sneezes the world catches a cold. Do you think we will see a recession in Jamaica?
You touch on a few interesting points with your question. First, I believe that Jamaica has effectively been in a recession for the past twenty years. Technically, a recession is two consecutive quarters of negative GDP growth. Jamaica has grown by only about 1% per year on average for the past 15 years while the rest of the world has grown by over 7% to 12% annually.

The rest of the world typically catches a cold when the USA sneezes because the rest of the world depends heavily on the Unites States as an export market for their products or services. I like to call the USA the ‘consuming nation.’ If you are not selling in America , then you are not selling. Jamaica has yet to develop a manufacturing economy that effectively sells in America , which is perplexing given our proximity and common language. On the other hand, tourism experts are predicting a particularly strong year in 2008 due to the very cold winter in North America and Europe , so I believe that tourism will hold up well. I am a bit concerned about remittances which provide Jamaica ‘s number one source of foreign currency inflows. If the United States goes into a recession, it will be because of the protracted housing slump and credit crunch. Many Americans, and Jamaicans living in America , ‘felt’ rich over the past several years because their property values were increasing. This significant growth in home equity fueled consumer spending. Over the past 12 months, home prices have fallen significantly, so people will not be as generous as they have been in the past in sending money home, because that source of ‘feeling’ rich has disappeared. This is my theory. I hope time will prove me wrong on this.

10. Recent media stories s show poverty has decline in Jamaica . Many say poverty and crime are tied together. Do you think if this continues we will see a decline in crime?
If there is a decline in poverty, I think there will most certainly be a decline in crime. The two ills are intertwined. However, while statisticians and economists may say that there has been a decline in poverty, I do not believe that the ‘realities on the ground’ support this assessment. If poverty has declined, then people have moved from being really really poor, to just being really poor. At the end of the day, they are still really poor, so this statistic has no bearing on reality in my view. You just have to talk to the man on the street in Jamaica , and he is still suffering. Plus, crime has gone up again in 2007, so one has to question the veracity of this claim that there is a decline in poverty.

11. Do you think crime is the biggest obstacle to foreign investment in Jamaica ? How can the business community engage the youth in Jamaica to slow criminality?
I do think that crime is a big obstacle to investment in Jamaica , but I do not believe that it is the biggest. Jamaica government officials like to point to various reports that say Jamaica is one of the easiest countries to start a business. Well, I have to tell you that opening a bank account in Jamaica for the Jamaica Business Journal was the most painful process that I have been through in ages. Also, have you ever tried to register a company in Jamaica ? I had to make several trips to the Registrar of Companies because the punctuation in the application form was not correct—this is no exaggeration. The system of taxation is also a hindrance to investment. Having said all that, large foreign investors like the Spanish hotel developers are all very excited about Jamaica , because they have the resources and connections to circumvent these nuisances, and the government provides them with great deals and incentives to set-up shop. So, although the process is painful, I believe that investing in Jamaica is a great idea, because our country is still in the development stage, and there is still plenty of opportunity for those who dive-in. The process will not be easy for the small business owner who wants to ‘try a ting’, but nothing worthwhile is ever easy.

Crime is a big problem, but it is a result of a lack of opportunity and hopelessness. Unfortunately, there will always be a criminal element, but I believe that Jamaica ‘s criminal element is disproportionately large due to the lack of opportunity that has existed for so long. Jamaica ‘s government needs to focus on removing barriers to growth and development, making it easy for small businesses to thrive and provide employment and opportunity, and soon the only people who engage in crime will be the ones who want to be criminals. I do not believe that many of Jamaica ‘s criminals actually want to be criminals, they just see no alternative. The business community continues to rake in the profits, so I believe they can help by providing programs that focus on education and training of Jamaica ‘s young people. In the November/December issue of the Jamaica Business Journal , our cover story was titled ‘Corporate Giving’ and we highlighted a few businesses that do their part and how they do it.

12. What do you do when you are not working?
I like to spend time with my family and occasionally try to play a little golf, if I am lucky. I also read business books and magazines so that I can stay on top of trends and events that might impact our world. I love to read!

13. If you had a magic wand to change something in Jamaica what would it be?
Hmmm…that is a tough one. Maybe this is too idealistic, but I wish Jamaica would be like the Jamaica that I grew up in during the 1970s. Crime was not an issue, people were friendly, our leaders were well intentioned, and the sky was the limit. I am bullish on Jamaica and I believe we can get back to the way things were.

14. Thanks for the interview and all the best with the Journal. Any final words for the visitors to
Well, I would encourage them to go ahead and test the waters with doing business in Jamaica . I would also encourage your visitors to utilize the Jamaica Business Journal as a resource for learning about what is happening in business in Jamaica . I thank you for the opportunity to allow me to share my views on I think you are doing a fantastic thing for the Jamaican Diaspora.