Paulwell still hoping for growth in IT sector
BYRON BUCKLEY, Senior political reporter
Thursday, March 14, 2002
Technology minister, Phillip Paulwell, speaks to journalists yesterday at a press conference at his ministry in Kingston. Beside him is Rex James, the president of the National Investment Bank of Jamaica.
TECHNOLOGY minister, Phillip Paulwell yesterday appeared hopeful about the growth potential of the information technology (IT) sector, even after a damning report by Auditor General, Adrian Strachan revealed serious flaws in the management of state funds to support the establishment of new IT firms.
"We have seen a recovery in the United States (US) economy of the interest that people have in re-establishing facilities in Jamaica," Paulwell told journalists a day after reporting on Strachan's findings in Parliament. (See Pages 6 and 7)
"After September 11 many of the businesses now see the need to have offshore facilities. Jamaica is regarded as near-shore and they (American firms) do prefer to travel to Jamaica than to India," Paulwell said.
However, neither he nor Rex James, the president of the National Investment Bank of Jamaica (NIBJ), which managed government's Intec fund, accepted the bank's culpability for the sloppiness that the Auditor General found.
James said yesterday that he accepted responsibility for the actions of his staff at NIBJ although he was not involved in the details of all transactions. But he said there was no reason for him to resign or be dismissed.
"The decision as to whether I stay...is not only mine. Other people will be in a position to judge ...," he stated.
The Patterson Administration, prompted by calls from the Opposition, last December requested Strachan to audit the entire Intec Fund from which loans were granted to local and foreign investors to start up call centres and other variations of telecommunication businesses.
Questions were raised about the fund following the collapse of NetServ Jamaica Limited and the revelation that the company had received $180 million in loans despite government receiving unfavourable due diligence reports about Paul Pereira, NetServ's principal. Furthermore, it appeared that NetServ did not place matching equity in the project.
The company collapsed after six months, blaming its troubles on the terrorist attacks on the United States on September 11 last year as well as bad publicity emanating from Jamaica about the company and its principal, Paul Pereira.
But Paulwell sought to defend the role of technocrats in the NetServ controversy during yesterday's press conference.
Said he: "If NIBJ were allowed to handle it without any interference (or) involvement from the ministry (of industry, commerce and technology), as it does now with other projects, the NIBJ's board would take full responsibility and provide the kind of guidance that the staff would need to ensure that guidelines are properly adhered to.
"In hindsight it was unfair to bring a bank that has to have other considerations around the same table with us. And that's the reason we are divorcing them," he added.
The minister said that apart from NetServ, he was pleased with the performance of technocrats pertaining to the Intec programme.
"On the whole the management process was much more effective and better ... (After) looking on one project in the light of all the others ... on the balance I am still in support of and have confidence in the team," said Paulwell.
And the technology minister admitted yesterday that the administration was "very ambitious" in its original goal to generate 40,000 jobs in three years in light of the experiences of other countries such as India and Ireland, which took 10 years for their IT industries to be established.
In addition, he said government was refocusing its marketing strategy to target mature firms in the IT industry abroad, rather than pursue start-up operations, which are dependent on receiving soft loans from the state.
This strategic shift, he said, was necessary because the finance ministry has had to redirect funds from the $5 billion originally earmarked for the Intec programme, resulting in the expenditure of only $1.2 billion after two years and the shortage of funds for the sector.
Said Paulwell: "We are meeting directly with businesses and one of the focus of the ministry now is to go out and spear fish. For example, we are going to go back to America OnLine and we are going to say to them that we have certain space in Jamaica now equipped. Will you come to Jamaica?"
"We are going to AT&T. They have over 5,000 seats in North America. We will invite them to come to Jamaica and cut their costs by 40 per cent. We are looking at some of the airlines such as Delta. We are looking now at established companies...," the technology minister told journalists.