A time for non-traditional thinking
There is a time when being wedded to tried and unsuccessful ideas is simply devastating to the cause of progress. I tried very hard to address that in the 2012 GraceKennedy Foundation lecture in March this year.
I attempted to show the recurrent nature of our economic pursuits over the course of 90 years, and in spite of the congratulations I received then, very few people wish to confront new ways.
Noted Caribbean diplomat and trade consultant Sir Ronald Sanders continues to draw attention to trade realities as they affect Caribbean industries in world trade. His highly informative columns never cease to inform us of the many challenges faced by certain traditional industries such as bananas and rum. What they do not do is to impose a reality check on our strategic alternatives.
One scenario is the linkage between climate change and the susceptibility of certain crops to more frequent hurricanes. Sugar and bananas have a long history of devastation by hurricanes in Jamaica going back centuries, all resulting in a need for some refinancing and bailouts of varying degrees.
Nothing would be wrong with that, except for the fact that centuries later we have made no preparation in good years that would offset the devastation of the bad years.
Have we really made progress? Would someone please weigh the sales and profits from bananas and sugar over the years, deduct the costs of the bailouts and reinvestment and see if we have really made a profit? It would be an extremely important piece of financial information and would do a lot to dispel the emotion that surrounds these two politically sensitive industries.
Many will speak glibly of the "social significance" of these activities, but are the "social dependents" getting any benefits? Are the uneducated labourers who toil in these two industries any better off in terms of wealth or living and working conditions? Or do they only represent a large number of politically malleable voters?
A well-known marketing dilemma is the strength to challenge your own products and services even when they seem to be doing well, but the case studies abound here and internationally of the successes (and failures) associated with marketing reinvention.
Simply think of Bill Gates or Steve Jobs as employees of the mainframe giant IBM, bringing their Microsoft or Apple ideas to the board of that giant corporation. Well, I can assure you that in most companies those two madmen would be on the street in short order.
Crazy fools would be the final edict of the board, and perhaps the CEO would be congratulated and given a hefty bonus for snuffing out "subversives".
Unfortunately, hefty bonus payments do not seem to attract retroactive reduction or recall, and once again the ordinary triumphs over the imaginative. This is even more devastating when we simply learn nothing from those experiences and continue on our merry way.
Can you imagine a Jamaican hotel industry without the all-inclusive properties in the midst of our criminal anarchy? Well, I can't, but I have lived long enough to remember John Issa and 'Butch' Stewart suffer the indignation of a stagnant industry when they started.
Now they are seen as heroes of the industry in the 20/20 vision of others' hindsight. Hindsight is a wonderful concept as it suggests that your head can spin around like the character in The Exorcist and what you see is really your ass (not a pretty sight for most of us). Yet we choose to continue to praise development in areas of technology, science, and innovation only as users and not originators.
Let me deal specifically with J Wray and Nephew, or perhaps I should call it "the rum that got away". In a worldwide marketplace the most valuable part of the company is contained in the brand "Appleton" and the science and processes that make it the really great rum.
It has now been acquired by the Campari Co, which seems to know the look of a deal when it sees it. So we sold to the Trinidadians and they sold to Italy, notwithstanding the efforts of a local consortium.
They seemed not to have wanted the whole Lascelles Group and I am sure that in "hindsight" we will be astonished to find out that the perceived value of the brands will outweigh the total value of the fixed assets, buildings, and land inclusive of the Appleton estate.
We the local analysts, and the public in general, will find it hard to assume that the value of a concept or brand is worth more than a building and land. That reality needs to be a wake-up call to our financial institutions that are reluctant to lend without hard assets.
So the world's single largest inventory of aged rum goes to Italy along with so many opportunities. This is a store of value built up over the years and cannot be recovered or replaced in decades, so with the other players left here we will only be white rum producers and some young unknown brands, in an increasingly sophisticated world market where one good "whites" will put you in the DUI category.
So much for expanding sales worldwide. Even if we started today it would take nearly three decades to regain any prominence in the premium market.
The very talented people doing the distilling and blending could have been used to have Appleton rum distilled in every market that produces molasses and gradually copy the Guinness/Heineken model of producing carefully monitored quality products to exacting standards through many contract-packing arrangements.
This shift of mindset is very important for entering a large marketplace opportunity that transcends the small markets and shrinking economic indicators that define Jamaica currently. The purpose of an acceptable and legal business is to produce profits for reward and sustainability.
This seemingly "selfish" motive is what creates jobs that support families, education, and the communities that we live in. This is wealth creation, not wealth redistribution. This is making bigger cakes, not eating increasingly smaller slices.
Well, congratulations to President Obama on his re-election, and I know all of us are happy for this. I found it interesting how engaged and knowledgeable we were about the intricacies of each state and the candidates.
If only we would apply the same diligence to local elections, then perhaps citizens would force good governance practice. Unfortunately, the energy spent on US elections will do little to reduce our energy bills.
We are Democrats and Republicans, but we can't say what our political contributions were to the JLP and PNP. Strange, but very true.