Gordon Swaby

On becoming 25…

Quarter Century, wow. I’m 25!

2015 was a year of transition for me.

The first quarter of the year was personally very challenging. It allowed me to rediscover how supportive family is and I experienced the kindness of friends and strangers. As it turns out, the best time to find out who your true friends are is when life throws you an unwelcome curveball.

I fell out of love, I experienced great betrayal and I fell in love; an emotional rollercoaster would be an understatement.  I was told by a close friend as a teen that the only thing constant in life is change. That thought has stayed with me ever since. So, I welcome change in whatever form it may come. Change has allowed me to rekindle old friendships and create amazing new ones.

In March, I was invited by the World Bank to speak to a group of young professionals at their HQ in Washington DC. It was an amazing experience and I truly enjoyed speaking and interacting with them. I will close 2015 having spoken to more than 3,000 people. I am truly grateful for the opportunity to speak to others and I do jump at it every opportunity I get.

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In July I travelled to Canada for the first time for a Global Shapers event. It’s truly a privilege to interact with so many millennials who are doing great things in their respective countries. I left Canada inspired to continue to contribute to Jamaica, the region and the world.

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EduFocal continues to grow and I couldn’t be happier. Happy, but I’m certainly not satisfied. Our team is strong and we continue to expand our reach in Jamaica and we have plans for an even larger expansion. In 2015 we made our first multi-million dollar cash acquisition; purchasing a defunct competitor’s content base. This acquisition allowed us to become the largest online GSAT resource in Jamaica. We’re still very much a small company, but 2015 saw us giving back more than $300,000 in cash and kind to students, NGOs, the local tech community and others. This year’s EduFocal Excellence Awards has also been our largest yet.

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I’ve been writing my “Year in review” posts for a few years now and it’s been such an interesting and worthwhile exercise for me. It forces me to reflect on the year I’ve had it helps me to plan for the year ahead and it helps me to reflect on the progress I’ve made both personally and professionally.

2015 was a year of challenges and change, but it was also a year of growth and opportunity. The mission continues in 2016 and I know that it will also be a year full of more opportunity and growth.

A big, big thank you to those who continue to help and inspire me on my journey. My family, my better half, my board of directors, friends and even strangers. Thank you to those who are honest with me, those who encourage me and provide invaluable feedback. I truly do appreciate and I look forward to continuing on this journey called life with your guidance and support.

Happy 25th birthday to me!

As usual I want to thank local, regional, international media and others for following our journey. Here are some of the many stories throughout the year:

Jamaica Hosts First Ever Nexus Caribbean Youth Summit” by Huffington Post

Jamaica’s move from ‘education for all’ to ‘quality education for all’” by Virgin

EduFocal Provides More GSATready Resources” by The Jamaica Gleaner

GSAT, CSEC Students Top EduFocal Excellence Awards” by The Jamaica Gleaner

EduFocal Awards top Users” by the Jamaica Observer

 


The Jamaican dream and happiness in a broken country

First, I have to declare my bias. I love Jamaica, dearly. I have been privileged to visit and explore at least 9 countries and many cities. Each time I travel there’s one feeling I always look forward to, the feeling I get when the plane hits the runway at the Norman Manley International Airport (NMIA) in Kingston, Jamaica. Oh, what a great feeling that is; the joy of home.

The requirements for happiness varies from person to person. Your requirements may be different from mine. My advice to you? Go where you can find your own brand of happiness. I have found mine in my home country Jamaica.

I am the product of a broken country and imperfect education system.  I was educated at Sacred Heart Academy, a small catholic school in Christiana, Manchester, Knox College, a high school in Spaldings, Clarendon, Holmwood Technical High School, a technical high school in Christiana, Manchester and the University of Technology, one of Jamaica’s major Universities.  Many of my peers grew up in countries with better healthcare, a better education system, safer environment, but despite that, they are my equals. In March 2015, I was invited by the World Bank to speak to a group of young professionals at their HQ in Washington, DC. A part my talk was encouraging  them to acknowledge and leverage their privilege. Because yes, living and working in DC is a privilege. I try to do the same, to acknowledge my privileged life in Jamaica. My success is a privilege that I am acutely aware of.

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At 24, I have little to no personal debt and through my company, I am able to fully maintain myself financially and provide temporary and permanent employment for a few others. What is my brand of happiness? My brand of happiness is value creation. Creating value for myself and others. It so happens that in Jamaica, a lot of value needs to be created. I am privileged to own a growing company that is creating value for myself, others and children. A company that can stand toe-to-toe with a similar company in Silicon Valley or anywhere else in the world. In 2014, I was recognized by the Inter-American Development bank (The IDB) as 1 of 10 innovators in Latin America and the Caribbean. I consequently had the opportunity to travel to Brazil to present to the IDB’s board of Governors and President, Luis Alberto Moreno. I don’t do what I do for recognition, but it’s humbling to know that an entity like the IDB can honor  and acknowledge the work of a country boy from Christiana and his team; I’ve achieved this in a broken country, imagine the possibilities for me and others if we were even marginally better off. What if I didn’t have to worry about the struggles of a 3rd world Entrepreneur?

In 2013 and 2014 I had the opportunity to travel to Geneva, Switzerland. I visited the World Economic Forum and something that its founder, Klaus Schwab said in regards to his foundation resonated with me. He said “…I am happy, but I am not satisfied”. A shared sentiment; I am happy, but I’m certainly not satisfied. I am not satisfied because the success that I’ve had as a young adult in Jamaica is the exception, not the rule. I am not satisfied because I have been provided with opportunities and support that many others don’t have access to. I am not satisfied because too many Jamaicans go to bed hungry each night. I am not satisfied because too many Jamaicans continue to be victims of crime and violence. I am not satisfied because there’s so much to be done. However, I am happy because unhappy people don’t produce great work, and I want to produce great work. I will always see the opportunities in challenges and I will always seek to create value for myself and others.

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Jamaica, I love you. Happy 53rd birthday. Let’s continue working to fix our amazing, but broken country together.


My Gleaner Column: New Media Must Pick Fights They Can Win 

At 180 years old, the Jamaica Gleaner is one of the oldest newspaper companies in the western hemisphere and the world. Today I help them to celebrate with a guest column. Read, enjoy and share. Happy 180th Birthday to the ‘Old lady of North Street’. 

The company is celebrating its 180th birthday today, and that’s not by chance. It’s still alive and thriving because it has adapted with time to appeal to a different generation of readers. But this time is different – different because of the Internet.

Now more than ever, the modern press has to deal with increased competition. Who is this competition? I am. You are, too, if you’re armed with a cell phone and an Internet connection. In fact, everybody who has a cell phone and access to the Internet is competition to the modern press. What’s even more interesting, we are all ‘journalists’ that aren’t in it to make money. With the rise of social networks, we have been conditioned to share a lot of our lives, from the very mundane to the very important


Response to Damion Crawford re: Critique of my post on Government Withdrawal tax.

I appreciate that Junior Minister, Damion Crawford took the time to craft a response to my blog post titled “ The Jamaican Government’s Withdrawal Tax is anti-business, does not protect the poor and weakens the middle class” You can find his response to me here. 

It’s important that we distinguish between revenue/income, profit and day to day working capital needed to run a business.  The $6,000,000 mentioned is not profit or income, it’s day to day working capital, i.e money that you use to make money; the government is essentially taxing the money that businesses will use to make money and if they’ve made any money then the government taxes the business again. Day to day capital is crucial in the running of any business and I think that your math calculations oversimplifies how much of an impact the withdrawal tax will have on businesses and individuals.

I am not opposed to taxes and I don’t think any well thinking Jamaican is opposed to it either, but I strongly believe that it can and must be equitable to the majority.

A relevant and poignant example:

John Brown is in construction and he is the owner and operator of a company called Brown’s Construction Limited. Mr. Brown recently took on a house building project for his client, Miss Sandra Miller (She took a loan). To get the ball rolling, Miss Miller sends $1,200,000 (She wires the money to him as it’s illegal to have more than a million or equivalent on your person) to Mr. Brown solely to buy construction material for her house (e.g blocks, steel etc), in this particular scenario a withdrawal tax of 0.09% would be applicable to Miss Brown. She would then pay $1,080 ( of course the bank’s charge has not been factored in).

Needing to purchase the material, Mr. Brown would then need to pay the hardware store or his supplier the $1,200,000. This is considered a withdrawal so the 0.09% tax would again be charged. Bringing the total tax for more or less one transaction to $2,160 JM + Bank charges.

This is another potential scenario and I’m afraid that raising the income tax threshold will not offset the other additional expenses that Miss Miller and others will inevitably have to deal with.

You mentioned in your post that it “protects the most vulnerable”, I disagree.  Everybody is affected, some much more than others. Government policies – particularly taxes – have knock on effects that ripple through the economy. It can show up in many different ways, sometimes in inflation (in this case price increases right across the board) – which hits everybody – or sometimes not as prevalent as economy wide inflation but just price rises on many goods and services.
There is a reason why it is the largest revenue measure for FY 2014/2015.

If after understanding what I’ve said above and still holding the view that it is fair for the majority then there’s not much else I can say.


The Jamaican Government’s Withdrawal Tax is anti-business, does not protect the poor and weakens the middle class

I commend Peter Phillips on the work that he has done in the Finance Ministry thus far. Our debt to GDP ratio is down, interest rates are not as high as they used to be and inflation is down, but the recent move by the Jamaican government to implement a levy on bank withdrawals is a bad move. It is an anti-business and retrograde move.

Let me explain.

A little bit over a year ago I published on this blog a debit card charge comparison chart for Jamaican banks. You can find that blog post here.  The chart has not been updated , but I am certain that bank charges have been adjusted (upwards) since.

To summarise the chart, two of our largest banks, National Commercial Bank ( NCB) and Scotiabank had some of the highest charges, Scotiabank charging $66 JM for each multilink withdrawal while NCB charged $60.34 per withdrawal from a multilink ATM.

In January 2014, the Jamaican government launched an investigation into the fees that commercial banks and credit unions charged, I believe that consensus was that bank fees were too high. See a news release on the issue here .

You can find the ministry paper for the withdrawal levy here.

Side note: Why are we getting scanned copies of ministry papers in 2014? Why can’t we get the original document in PDF format?

Information on the Levy is #3 in the paper. For convenience, see it below:

a) As part of Revenue Measures FY 2014/2015, the House is being asked to approve the introduction  of a levy on withdrawals from deposit-taking institutions  and encashments from securities dealers.

b)  This levy will be chargeable  on all withdrawals from deposit taking institutions by means of: –

i. Electronic banking (e-banking)
ii. Point of Sales (POS)
iii. Cheques
iv) Withdrawals – ABM/ATM/ETM or over the counter and;
v  Internet transfers (with the exception of transfers between accounts of the same person in the same financial institution)

If you’re withdrawing less than a million JMD from the bank the government will take 0.1% of it.
Between a million and 5 million the government will take 0.09% of it.
Greater than 5 million, but less than 20 million and the government will take 0.075%
Greater than 20 million dollars and the government will take 0.05%

So, if you go to the ATM and you withdraw $1,000 or you pay it at your favorite restaurant  the government will take $1.
If you buy $5,000 worth of gas for your motor vehicle and you use your card the government will take $5. Not a big deal, in fact, it’s negligible. Surely you can give your government $1 on every 1,000 up to $999,999.

With close to 1 million Jamaicans unbanked this move  still (supposedly) protects the most poor and vulnerable.  Great, but not exactly.

The government, understanding how tough things are for their people even moved the personal income tax threshold from $507, 312.00 to $557, 232.00 causing  a whopping 12, 823 persons to fall outside the tax base.

On an individual level the levy is in fact negligible, but that that’s not where the real issue is. Inevitably the banks will pass this charge on to their customers via an increase in bank charges, this is fair, but bear in mind, the consensus was that bank fees were already high. Not only will the bank charge you for the actual tax, they’ll charge the customer for the administration involved in paying the government the tax monthly, implementation of the levy etc, so expect increased fees from the banks soon if the levy is not revised or removed.

The second and larger issue. Many llegitimate medium sized and large businesses pass millions of dollars through their respective banks daily, i.e millions of dollars worth of deposits AND withdrawals. Legit businesses that both the poor and middle class utilise. e.g restaurants, gas stations, supermarkets etc.

Here’s a scenario:

John Brown owns a business that deals with a lot of cash (e.g money gram locations, bakeries, supermarkets etc). On a daily basis John deposits 6 million dollars into the bank. John needs 5 million $ to cover his bills daily.  So, John would need to withdraw that 5 mil. John (or that transaction) would therefore fall in the 0.09% bracket.

$5,000,000 * 0.09/100 = $4,500. John is paying $4,500 in taxes DAILY. Not a big deal, right? But wait, John operates 300 days out of the year. So, 300 * $4,500 = $1,350,000 in taxes.

John loves his country, but he’s also operating a business and will have no choice but to pass on these charges to his customers, of course prior to this John was struggling with the already high bank charges. This is just one example, but there are many others.  There are other consequences, but I think these are the ones that will affect us the most in the short and medium term. The poor and middle class will suffer.

Of all the revenue measures, the government will make the most from the Withdrawal tax ($2.250 billion), but I would encourage them to reconsider and explore more equitable and sensible alternatives.

Feedback is of course always welcome.


Debit card charges comparison chart for Jamaican banks

I couldn’t find this anywhere else online so I thought it would be a great reference for the people who care.

These figures may seem negligible to many, but they add up. Especially if you do point of sales transactions regularly. Let’s say you use your scotia card  on average once daily, that’s $115.5 weekly, $511,50 monthly or $6,022.50 yearly. Many of us more than one bank so that’s a conservative figure. Also take into consideration ABM charges etc. Another good thing about tracking bank charges is that it’s easy for them to charge you in error without you noticing, especially if you have large balances.

I will add more banks to this chart in the future and also update them as the bank changes them.

 

Notes

Feel free to scrutinize my figures. 

The figures quoted from Scotia are for their regular savings account.

You can avoid Scotiabank’s charges (for their POS and ATMs) with their Electronic Access Account with a flat figure of  $190 per month

You can avoid all of NCB’s charges (for their POS and ATMs) with their midas plus facility. Unlike Scotia’s $190 charge, NCB’s MPF is free.

Scotiabank charges 2% for all online visa debit transactions.

Scotiabank’s and First Global’s fees will be raised as of May 1, 2013. Chart shows new fees.

If your Jamaica National account goes below $2,500 JM $75 is deducted monthly.

Sources:

NCB Fee guide: http://jncb.com/docs/NCB_Fee_Guide.pdf

First Global Bank: http://www.firstglobal-bank.com/news/newsarticle.aspx?id=95&cat=1  (Rates are being modified on May 1, 2013, table reflects such. )

ScotiaBank:  http://www.scotiabank.com/intl/jm/PDF/about/Schedule_of_rates_v5.pdf (Rates are being upgraded on May 1, 2013), table reflects said charges. )

First Caribbean: http://www.cibcfcib.com/uploads/pdf/Schedule%20of%20Charges/Personal%20Banking/Jamaica-Schedule_of_Charges-Retail.pdf

RBC: http://www.rbtt.com/jm/personal/file-706105.pdf

Jamaica National: I couldn’t find a fee guide from their website so I got the information from their customer. The name of the CSR that I spoke to was Kimberley. Customer care # is 1876- 5343

VMBS:  http://vmbuildingsociety.vmbs.com/express_24_abm.php


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