IN this its darkest economic hour, Jamaica must decide if it's fish, fowl, or red herring. The country will not increase in beauty, fellowship and prosperity if, like the man who is a jack of all trades and master of none, we continue down the path to ruination by being a producer of samples. By pursuing the misguided policy of being all things to all men, we have produced some iconic musicians, a sprinkling of respected academics, a handful of world-leading athletes, one or two brands that are known beyond our shores, and a few household name entrepreneurs who produce and market them. We have failed to do any single thing so well and on a scale to create wealth sufficient to satisfy the needs of a demanding populace with first-world tastes.
What are the options open to Jamaica to double its Gross Domestic Product (GDP) in, say, 5-10 years? Writing in the Harvard Business Review, Rosabeth Moss Canter said in the age of globalisation when countries must compete like companies do, there are three paths a nation can take to success. A nation can thrive by becoming a world-class centre of thinkers, makers or traders.
Thinkers develop concepts, operating systems, software and hardware which drive industry and produce a never-ending stream of new conveniences; combining talent and technology to produce the next generation of products and services. There are locations such as Silicon Valley in the United States and its equivalent in Bangalore, India, that lead the world in innovation. Jamaica has not invested enough in its human capital or in research and development, and loses too many of its highly educated and talented people through migration, to be immediately competitive in this area.
Makers have superior physical infrastructure, abundant well-trained workers, integrated services, a high level of technology and relatively cheap energy that support high-value, low-cost production. China and Brazil come to mind as examples of countries that have built a competitive manufacturing base. Jamaica, where the cost of production (energy, security etc) is high, workers are largely untrained, the physical infrastructure and technology capacity are sub-standard, and where there is an absence of linkage industries comprised of artisans and the trades generally, does not have the right mix of assets to effectively compete in a large-scale manufacturing arena.
Traders are ideally located at the crossroads of trading routes linking the world's great suppliers of goods and services on the one hand, and consumers on the other. Their excellent seaports, airports, convention and exposition facilities, hotels, warehousing, communications, cultural diversity, and language flexibility gives them an advantage in connecting buyers and sellers and serving as a transshipment point for goods and services moving across national borders. Miami, with its Latin American and increasingly global connections, has been the quintessential trading city. Rotterdam in the Netherlands, Dubai in the United Arab Emirates and Singapore have gone one step further in establishing themselves as logistics hubs. Jamaica has the potential to be the fourth logistics hub by capitalising on the increased maritime activities in the region that are expected to come from completion of the Panama Canal in 2014/2015.
Industry, Investment and Commerce minister Anthony Hylton is championing development of the Jamaica Logistics Hub as an idea whose time has come. Although far-fetched in terms of absence of the policies and the business-friendly climate needed to attract the huge investments that are needed, the country's limited capacity to implement such large-scale projects and missing elements such as the human resources and linkage industries, the minister should be taken seriously and given all the support necessary. We may realistically only in the first instance reach the goal of a strategically important and significant trans-shipment location building on what already exists at the Kingston container port, but his could in the medium to long term be the panacea for Jamaica's economic ills.
The impending agreement between Jamaica and the International Monetary Fund (IMF) will achieve little more than keep the country on life support. It perpetuates the simplistic neo-liberal conservatism of Ronald Reagan, Margaret Thatcher and others of their ilk, who blame the underdeveloped state of countries like Jamaica on poor governance, excessive government spending and intervention in the markets, and too much state ownership. The medicine they prescribe with little if any variation is liberalisation, privatisation, elimination of subsidies and reduction of the social safety net, and smaller government under strict IMF/ World Bank structural adjustment programmes. These prescriptions have proven, when applied in totality and all at once, to be contractionary in their effect on a country's economy; stunting growth and creating hardships, particularly for persons at the base of the economic pyramid.
There is no better time than now, when we are holding our collective breath, waiting for the announcement that an IMF agreement has been signed, for us to ask ourselves the paradigm-changing question first asked by the late quality management guru W Edwards Deming in his book, Out of the Crisis. Need any country be poor? Need Jamaica be poor? The answer given by Deming, which also must be our response, is a resounding NO. Any country producing products and rendering services that are in high demand by world markets and suited to the education and talents of its people, within an environment facilitated by business-friendly government policies and incentives, need not be poor.
It is only by growing the economy that we will eventually escape what Chilean development specialist and author Manfred Max-Neef in his book, Human Scale Development, calls the crisis of utopia; the unlivable space between the contending forces of neo-liberal conservatism who seek to impose their own prescriptions in a vain attempt to solve problems they claim are purely of our own making and those who feel, for example, that the stock of foreign debt is unpayable and that without concession from rich countries that caused the problem in the first place, may increase poverty and deplete our resources to structurally irreversible limits. It's time that our leaders go beyond the middle position of trying to balance the books and look towards producing growth.