Save more to cap­i­talise on in­vest­ments in the coun­try

Jamaica Gleaner - - GROWTH & JOBS -

MAU­REEN HAYDENCATER, man­ag­ing di­rec­tor, JN Bank, says a pro­gramme which in­flu­ences Ja­maicans to save more has to be a crit­i­cal com­po­nent of pre­par­ing for a fu­ture of in­creased in­vest­ments in the coun­try.

“The more you save, the more you’ll be able to in­vest,” she said.

She was speak­ing against the back­ground of a re­cent panel dis­cus­sion hosted by the In­sti­tute of Char­tered Ac­coun­tants of Ja­maica (ICAJ) as part of its Busi­ness Con­fer­ence, which dis­cussed in­vest­ments in Ja­maica and the Caribbean, and ahead of World Sav­ings Day, which is be­ing ob­served to­day.

“What we see is that Ja­maica has moved along a path of heavy spend­ing,” Hay­den-Cater con­tin­ued. “It’s not un­usual for peo­ple to spend ev­ery dol­lar they earn by the end of the month.”

The coun­try’s sav­ings, as a per­cent­age of its gross do­mes­tic prod­uct (GDP), is some­where be­tween 19 per cent and 20.5 per cent, ac­cord­ing to data from the World Bank and the Cen­tral In­tel­li­gence Agency (CIA). The CIA ranks the coun­try at 87 out of 181 coun­tries in terms of sav­ings.

NA­TIONAL SAV­INGS

Al­though Ja­maica is ranked above some de­vel­oped coun­tries, such as Canada at 98, and Italy at 99, with un­der 20 per cent of their GDP rep­re­sent­ing sav­ings; and even the United States ranked at 135, with its gross na­tional sav­ings rep­re­sent­ing only 14 per cent of its GDP, Hay­den-Cater said that sav­ing more would po­si­tion Ja­maicans to take bet­ter ad­van­tage of an im­prov­ing Ja­maican econ­omy.

“There are many de­vel­op­ments tak­ing place and touted to take place, such as the devel­op­ment of spe­cial eco­nomic zones; and in the tourism sec­tor; there­fore, Ja­maicans will be in a bet­ter po­si­tion to grasp op­por­tu­ni­ties that may arise from these projects if they have sav­ings to sup­port them,” she said.

IM­POR­TANT TOOL

The banker, with more than three decades of ex­pe­ri­ence, said sav­ings are an im­por­tant tool to ac­cess credit, which peo­ple need to ac­quire as­sets and build wealth.

“Your sav­ings in a fi­nan­cial in­sti­tu­tion is se­cu­rity, which you can use to ac­cess credit; but also, those sav­ings can pro­vide you with a foot­print for fi­nan­cial in­sti­tu­tions to use when con­sid­er­ing how much to lend you,” she ad­vised.

“There­fore, as op­por­tu­ni­ties emerge, you may need to bor­row to pur­chase the cap­i­tal to sup­port those op­por­tu­ni­ties in­stead of de­plet­ing your sav­ings,” she added, not­ing that more de­posits also po­si­tion fi­nan­cial in­sti­tu­tions to lend for a wider range of pur­poses.

Those sav­ings, she main­tained, can con­tinue to earn in­ter­est in your ac­count; or can be in­vested in other in­stru­ments, such as se­cu­ri­ties and bonds, to earn even higher yields.

“And, the op­por­tu­ni­ties to save and in­vest aren’t lim­ited to Ja­maicans in Ja­maica, but in­clude those liv­ing over­seas,” she said, not­ing that Ja­maican fi­nan­cial in­sti­tu­tions of­fer a higher rate of re­turn. Mau­reen Hay­den-Cater, Man­ag­ing Di­rec­tor, JN Bank.

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