$10 billion from PetroCaribe fueling growth in the BPO industry
Over the last five years the PetroCaribe Development Fund, (PCDF), has provided funding of approximately $10 Billion dollars (US$80 Million) to the Business Process Outsourcing (BPO) industry. This investment has made a significant contribution to the expansion of the BPO sector and a reduction of the unemployment rate which has moved to 9.6 per cent, the lowest rate in decades.
This funding by the PCDF also played a critical role in attracting increased inflows of Foreign Direct Investments (FDI) into the country with cumulative amounts of more than US1.7 billion recorded in 2015 and 2016.
The rapid growth of the BPO sector, is a central plank of the Government of Jamaica’s drive to achieve economic growth and job creation. The sector currently employs approximately 26,000
persons and is adding an estimated 5,000 new jobs per year. Reports from Jamaica Trade and Invest (JAMPRO), are that Jamaica currently has more than 50 outsourcing companies, 16 of which have been in existence for 10 years or more; most of the BPO companies operating in Jamaica are from the United States.
According to Dr. Wesley Hughes, CEO of the PCDF, “The PetroCaribe Agreement, with inflows into Jamaica of over US$3 billion since 2006, was critical for economic stability during the great recession, and equally vital during the current IMF programme when the 50 per cent debt-buy back deal with Venezuela resulted in a 10 percentage point drop in the debt to GDP ratio. The Agreement has given Jamaica much to be thankful for”.
The PCDF facility for the BPO sector is administered by the Development Bank of Jamaica (DBJ) which provides loans at an interest rate of 4.5 per cent per annum to investors to buildout BPO facilities across the Island, primarily in Kingston, Montego Bay, Portmore and Mandeville. The PCDF-funded facility has resulted in a number of new investments being undertaken including the Barnett Tech Park in Montego Bay and a new 230,000 square feet integrated Technology Park currently under construction at 58 Half-Way Tree Road in Kingston. When completed it is expected to be the largest BPO facility in the Caribbean. The DBJ describes the PCDF’s credit facility as “a game changer in the economy”.
Dr. Hughes, further notes that “by financing such projects, the PCDF is fulfilling its mandate of contributing to the country’s economic and social transformation, and improving human capital”. Established in 2006, the PCDF receives its resources when part of the payments due from the purchase of petroleum from Venezuela is converted to long-term low-interest loans, (25 years at 1-2% per annum).
The Fund contributes to Jamaica’s economic and social transformation through its loans and grants programmes, while fulfilling its debt obligations to Venezuela and generating significant surpluses through investments.