amaica and Singapore, two island states that emerged from British colonial rule at the halfway point of the last century, are often compared most times to rue the missed opportunity for the former to become as economically viable as the latter. In 1965, the Gross Domestic Product (GDP) in US dollars was $2,850 per person for Jamaica,

a figure slightly higher than Singapore’s $2,650. By 2006, Sin-gapore’s GDP was $31,400 per person while Jamaica’s figure stood at $4,800, a drastic difference to say the least. So both countries started out almost evenly matched, in fact Jamaica might even have enjoyed a slight edge with more natural re-sources and a greater potential for a robust tourism industry. What are the reasons for the disparity in growth and which of these reasons has a possible solution?

After independence Singapore, which is fortuitously located on key shipping lanes to and from East Asia, invested aggres-sively in strategic infrastructure such as its port, which led to a steady source of income from the seas? While Jamaica me-andered through years of political and economic instability highlighted by the turmoil of the 1970s, Singapore subsidized education, maintained an open and corruption free economy and created a sovereign fund that was used to make key in-ternational investments. All of these developments can all be attributed to two extremely poignant differences between the two countries, leadership and long term emphasis on fostering entrepreneurship.

LeadershipJamaica cannot boast a leader like Singapore’s Lee Kuan Yew, who stepped down as Prime Minister in 1990 after 31 years in power. Lee’s style of government was direct, forceful and to-tally singular in its promotion of Singapore, some say he ruled with an iron fist without the velvet glove. His style of gov-ernment is unlikely to have been welcomed in Jamaica where Western thoughts on democracy and leadership would have influenced many of the policy changes that Lee implemented. Population control campaigns with strong incentives for fami-lies with two children worked wonderfully in helping to curb Singapore’s runaway population. The shorter maternity leaves and higher hospital fees might not have gone down so well with Jamaicans.

The Central Provident Fund, which is used by Singapore’s gov-ernment for economic development is financed by savings of 25% of each worker in the country, the savings are then made available when said worker reaches the age of 55. A perfect mix of socialism and government capitalism that if implement-ed would probably have cost a party an election in Jamaica.

Discipline in Singapore’s society is extremely high with severe punishment meted out for the slightest of infractions, from noise restrictions to graffiti and street side activities. Freedom

of speech isn’t as valued in Singapore as it is in the West, criti-cisms of the government was usually met with prompt ramifi-cations. The point is that Lee Kuan Yew’s vision of Singapore prospered with the help of his brand of leadership but the differences in the social makeup of the people of the two countries means that one size does not fit all. So if emulating governance is a less than viable option, what of the emphasis on entrepreneurship?

Jamaica and Singapore

yourmoney ezine

Business Lounge

J

While Jamaica meandered through years of political and economic instability high-lighted by the turmoil of the 1970s, Singapore subsidized education, maintained an open and corruption free economy and created a sover-eign fund that was used to make key interna-tional investments.

“

”

advertisment

Leadership and Entrepreneurship

The New waveCurrently, Singapore boasts over 50,000 businesses being formed annually, which works out to approximately 103 for every 10,000 Singaporeans, a figure which eclipses states such as the United Kingdom with 53 for the same number of peo-ple. This focus on entrepreneurship was fostered by a govern-ment that has employed a wide range of tactics designed to stimulate entrepreneurship. From providing public funds for venture investors who are interested in setting up shop and subsidies for firms in targeted areas to encouraging potential entrepreneurs and mentoring fledgling enterprises and even an award for failed entrepreneur which supposedly rewards risk-taking and hopefully not bad management.

While Jamaicans have long had the spirit of entrepreneurship ingrained into their psyches as confirmed by a 2006 Global Entrepreneurship Monitor survey which placed it among the highest of the 42 countries surveyed, doing business in Jamaica is especially hard. In the World Bank’s Doing Business series Jamaica ranked 170 out of 178 with regards to the burden of tax compliance.

The analysis says that 50% of the entrepreneur’s profit goes to tax and the processes surrounding being tax compliant. With so much of a business’s cash flow being redirected to taxes it is unlikely that the business will have the resources to actively invest in the areas that it needs to grow. For comparison, Sin-gapore’s burden is 23%. Even the cost of registering prop-erty in Jamaica is exorbitant at 13.5% compared to the United States 0.5%. This means that less entrepreneurs register their holdings resulting in less assets to be borrowed against, a criti-cal step in growing any business.

The significance of entrepreneurial emphasis is highlighted all the more by the disparity in growth between the two coun-tries and while Jamaica has caught on it is necessary that public figures note a number of things. Providing capital for entre-

preneurs is one thing but it is impossible for entrepreneurs to function in an environment that is not entrepreneur friendly despite the amount of money handed out.

Reducing the barriers to entry is extremely essential. That be-ing said the government should resist efforts to micromanage the sector and instead allow the sector to grow as organi-cally as possible. It is evident the impact that a strong entre-preneurial emphasis can have on a society and with our eyes opened and work already being done, its time to be a part of the new wave.

yourmoney ezine

Business Lounge

While Jamaicans have long had the spirit of entrepreneurship ingrained into their psyches as confirmed by a 2006 Global Entrepreneurship Moni-tor survey which placed it among the highest of the 42 countries surveyed, doing business in Jamaica is especially hard.

“

”

Jamaica and SingaporeLeadership and Entrepreneurship

yourmoney ezine

insights

vs The BillionairesLebron JameS

hether or not you are a fan of Lebron James or even basketball, it would be hard to miss the dog and pony show that the 25 year old NBA superstar’s free

agency negotiations has become. A free agent in profes-sional sport is a player whose contract has expired and is therefore able to sign with another franchise. With a player like Lebron James, whose value to a team is as undeniable to his league’s attempt to create artificial hype around play-ers that they think are marketable, the franchises that are able to pay him the exorbitant figures that he is “worth” are queuing up hoping that James makes the choice to hop onto their bandwagon. For an industry steeped in the selling of concocted images and hype, this type of media attention and financial speculation is helium to a player like James’ nar-cissistic balloon.

There is a three letter word that starts with the letter “e” and rhymes with “amigo” that obviously governs the partici-pation in and management of professional leagues. Owning a sports franchise often seems to be a massager of the afore-mentioned three letter word rather than a sound business investment especially when your business is subject to the whims of an egomaniac the likes of Lebron James. Where else do you find billionaires at the complete mercy of their so-called employees? Former NBA star Latrell Sprewell fa-mously asked of a franchise that offered him a $30 million, 3 year contract, “How am I supposed to feed my family with that?”

Warren Buffet has a saying that is quite possibly the reason a sports franchise is not one of his holdings, “When a man-agement with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputa-tion of the business that remains intact.” Dan Gilbert, the owner of the Cleveland Cavaliers, James team, has repeat-edly insisted that he will not grovel for James to stay despite the obvious value of a player who transformed one of the poorest franchises into a powerhouse despite being unable to transform hype into silverware. It just all seems a bit silly and I suppose that Americans place such high value on their sports superstars that all of us including the billionaires are at their mercy.

James has repeatedly stated that he wants to become the next billionaire athlete, joining the heights of a certain golfer, an aspiration that is becoming increasingly tangible. So, the self-made billionaires line up to court, forgive the pun, the aspiring billionaire and at the same time create unimaginable

hype for the NBA. Decision 2010 sounds like a presidential election but it is merely the selection of where the “King” rests his throne next; marketers twitch nervously, agents rub their palms greedily and fans wait to see when the less im-portant game will start.

W

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact. “

”advertisment

Read Your Money today...