Home' Trinidad and Tobago Guardian : April 27th 2014 Contents APRIL 27 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
NEWS | SBG3
One of the country s most
has called on the Gov-
ernment to promote the
orderly importation of
labour in order to address
the manpower shortages
that are being experienced locally.
Arthur Lok Jack---chairman of two large,
publicly listed companies---said the low unem-
ployment rate in T&T was one of the causes
of the low rate of investment by the private
Lok Jack made the point in an extended
intervention during the question and answer
period following a presentation on Thursday
night at the Hyatt Regency hotel by Prof Peter
Blair Henry, a Jamaica-born economist who
is Dean of New York University s Leonard N
Stern School of Business.
Henry, in his presentation, made the point
that stock market reactions to economic
reforms provide a powerful forecast of policy
efficiency and that share prices respond to
revelations about a country s economy.
Henry cited Latin American countries, where
the price earnings ratios went from an average
of 3.5 per cent to 14 per cent between 1993
and 2012. This, in turn, caused a reduction in
the cost of capital in those countries.
Lok Jack explained he was the chairman of
a number of pan-Caribbean companies that
headquartered in Trinidad. He was referring
to Guardian Holdings Ltd, Neal & Massy Hold-
ings---both of which are public companies---
and his family firm, Associated Brands.
He said that in Jamaica, the companies face
cost of capital of 18 or 19 per cent, while in
T&T "our cost of capital runs at around nine
He said in T&T stocks sell at an average
multiple of about ten to 11 times earnings,
while in Jamaica the price earnings ratio is
about five times.
He said that the disparity in the price earn-
ings ratios between T&T and Jamaica reflected
what Henry had said in his presentation.
Lok Jack said: "So basically that shows that
the uncertainty about the future in Jamaica,
to a large extent, at that high cost of capital,
reflects a very low multiple.
"People buy stocks for the future, what the
future earnings are, not for what it is currently.
In Trinidad, people buy a stock at ten times
earnings. Similarly, in Jamaica, they think it
is only worth five times earnings."
Lok Jack made the point that in T&T there
is full employment and there is a "hue and
cry from every manufacturer, every retailer,
everybody for labour" as there are not enough
workers "to go around."
He said: "Despite low interest rates and low
inflation, low unemployment brings about low
investment. It is very difficult for us to put
a new plant or a new factory with absolutely
He said he thought that Trinidadians were
quite entrepreneurial, but the country needs
to remove some of structural impediments.
"We should go definitely for, in my view,
organised, official immigration policies, rather
than the type of immigration policies that we
have where we close our eyes to people coming
off a boat or whatever have you.
"We should have it where they can come
in, get employed, pay their union dues, be a
part of the society and help to grow the econ-
omy because the GDP of this economy is not
going to grow one single percentage more
because I cannot increase my production. And
neither can anyone else."
Lok Jack added: "Despite the fact that we
have gone to robotics and all sorts of things
in our factories, we still cannot get the growth
that we need, although we may have the
demand internationally for it."
The businessman also said: "I know democ-
racy is good, but I have a problem when we
have governments changing and throwing
policies out the window and new policies
"The only time that I ever saw policies con-
tinue in T&T was after Mr (George) Chambers
made some very tough decisions in an election
year. He lost the election, and the new party
coming---the NAR (National Alliance for
Reconstruction)---continued with the same
policies. And it was that five-year term---even
though we had all sorts of problems with it;
we had a coup and all sorts of things---we had
consistency, in respect of the policy, which
brought us back out from the ten years of
"I don t know how you get political parties
today to continue that disciplined sustainability
that you talk about."
On the issue of democracy, Lok Jack said
he and former Finance Minister Wendell Mot-
tley were in China when that country was
adopting its reforms. But China, he said, was
not a democracy.
Lok Jack continued: "As someone said, India
is democracy of steroids. It s par for the course
in that China and India are moving forward,
but China seems to be doing a lot better than
India because of their democratic issues.
"How do you do that in developing coun-
How do we turn that around?"
Lok Jack: Import labour
to increase production
Full employment limiting new investment...
ARTHUR LOK JACK
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