Exports critical, warns ex-Jampro boss
The government needs a coherent export policy to save the country from its economic woes, says the former head of Jampro.
Jamaica can no longer borrow to meet its fiscal needs and the only alternative is to sell more goods and services internationally, said Gordon "Butch" Stewart, who left office last year.
"There was a time in Jamaica when borrowing money turned us into heroes," Stewart said earlier this week. "Now, nothing could be further from the truth."
The country's finances are so parlous that - at least until a new IMF agreement is signed - the government would have to pay sky-high interest rates if it went to the international capital markets.
"Borrowing money is the biggest disease that can be inflicted on a person or a country, especially when the need to borrow becomes more and more necessary," said the owner of Sandals Resorts International and this newspaper.
"We have done such a great job of borrowing that we have lost our standard of living."
But instead of taxing exporters to help repay the $1.7 trillion mountain of debt the country has racked up, it should be offering them breaks on taxes and energy costs, he said.
"The time has come - if we really want to work towards making ends meet - to get radical, to design an export product that can survive in foreign markets."
Stewart led the country's investment and promotions agency for 15 months until last June, when he resigned due to pressing time commitments with his business. He was replaced by property developer Phillip Gore in September.
His departure from Jampro hasn't dimmed his interest in boosting Brand Jamaica, however. "I consider myself a submarine. When things get tight, I submerge to fix them," he said.
Stewart stressed that he wasn't attacking either his former agency or the government. "I feel strongly that Dr Peter Phillips is absolutely the right man for the responsibility of being Minister of Finance," he said.
But he's adamant that the country needs to return to an older economic model, one based on exports.
"It's been an awfully long time since we've had hard export policies that we have gone overboard to promote," he said. "Without them, we're never going to make ends meet."
Jamaica has plenty of assets and just needs to learn how to take advantage of them. The workforce, for example, is ready and able to work hard, said the country's largest employer.
"All they need is good training, good direction, and good management," he said.
"We have bauxite. We have minerals. We even make money out of limestone. Our soil is so rich that if you stick your finger in the ground it will start to sprout."
Stewart said there are many ways the government could act to help the export sector, but he singled out two, taxation and energy.
"If we're really putting together an export plan then all equipment that goes into factories has got to be tax free. And you need to get tax breaks on rental for factory buildings."
Energy prices should also be cut for exporters, he said. Discount Venezuelan oil, at US$40 a barrel, should be passed through to exporters at cost rather than being repriced at international rates and then burdened with profit margins and taxes.
"If we don't go back to the old time days, we're never ever going to get out of this rut," he warned.