THE GRASS MAY NOT BE GREENER

Jamaica 2018 | ECONOMY | INTERVIEW

TBY talks to Michael Lee-Chin, Founder & Chairman of Portland Holdings, Chairman of the Economic Growth, on doing well as a business, doing good for the community, and reversing brain drain.

Michael Lee-Chin
BIOGRAPHY
Born in Port Antonio, Jamaica in 1951, Michael Lee-Chin emigrated to Canada in 1970 to study civil engineering at McMaster University in Hamilton, Ontario. At the age of 26, he became a financial advisor and progressed to the position of branch manager. In 1983, at the age of 32, he borrowed money to purchase USD500,000 of Mackenzie Financial stock. After four years, the stock appreciated seven-fold, using these profits to make his first acquisition, a small Ontario-based investment firm called AIC Limited. Within 20 years, AIC grew from less than USD1 million to more than USD15 billion. Selling AIC in 2009, Lee-Chin remains firmly committed to creating wealth for investors as Founder & Chairman of Portland Holdings.

What is the role of Portland Holdings in the development of Jamaica, and what investment opportunities do you see?

Portland Holdings has major investments in terms of financial services with banks, such as National Commercial Bank (NCB), the largest bank in Jamaica, and Guardian Holdings, the largest insurance company in the Caribbean, which we have recently taken a large interest in. NCB is the largest financial conglomerate in the Caribbean and Jamaica, and thus, we have an opportunity to have a positive impact on its development. We have been a great role model for other companies in terms of our attitude of not only doing well as a business but also doing good for the community. When we took over the bank in 2002, it had a 24% market share and made USD6 million in 2001 in after-tax profits. In the year ending September 2017, we made over USD150 million. In the last 14 years, we have had cumulative profits of over USD1.5 billion and have paid nearly half a billion dollars in income taxes. The bank, therefore, is influential in that not only is it a role model but also an economic driver and the largest taxpayer in Jamaica. Its mission is to build an institution so eminent in its global success that young bright Jamaicans will not feel the need to emigrate to get their professional, financial, and entrepreneurial fulfillment, but can get it working for a globally distinguished financial institution hailing from Jamaica.

How would you characterize the overall investment climate in Jamaica in terms of foreign investment?

There is a great deal of liquidity in the system, and this is always a great thing. Secondly, business and consumer confidence is the highest it has been for 50 years. The government is working hard to make Jamaica business friendly, and the objective in the next three years is to be in the top 10 of the World Bank's ease of doing business list. The environment is extremely pro-business, the rule of law is absolutely strong, and there is confidence in the justice system. For a foreign investor, it is a great opportunity. Things can be acquired relatively inexpensively, and given the current environment, this is extremely positive.

What are the remaining challenges for foreign investment and the country's strategy to overcome these?

The biggest challenge is the reputation of crime. Jamaica has reduced its debt-to-GDP ratio from 160% in 2013 to about 115% in 2017, a challenge taken on when Jamaica signed the IMF agreement in 2013. Since then, Jamaica has been an A student at passing quarterly IMF tests; whatever task Jamaica puts its attention to, it does a wonderful job. The focus is now on reducing crime significantly, which is one challenge. The other is just resetting and recalibrating standards of expectations in getting things done by the bureaucracy.

What is your short-term outlook for the economy and your company's priorities for 2018?

I never have a short-term outlook because life is not linear. You know which direction you are aiming toward, and if you work toward that, then great things will happen. You just have to focus on what it is you are doing, put in the requisite intelligence and passion, and persevere and great things will happen; often they already are. It is not linear, so I cannot predict with any accuracy what will happen in the next year. However, the table is set in terms of the confidence level that is in Jamaica, not to mention the liquidity, strength of national reserves, and direction of debt-to-GDP, which is tumbling. This is all against a background of the government not having any room to maneuver to stoke the community. Once there is more fiscal space, the government will have the room to do more infrastructure projects and stoke of the economy.