Trading relationships in difficult times
As I have previously stated, whether or not we have an agreement with the IMF, we have to survive individually and collectively. For those of us in the private sector, we have to earn our way out of the doldrums of decreasing Net International Reserves. To do so, we need to earn foreign exchange through effective import substitution where feasible, and the export of goods and services. There can be no other ways that do not increase the very debt trap from which we need to escape.
One of the facilitators of international trade in goods and services is the trade agreements to which we are a party. So towards furthering those goals, Jamaica has signed several agreements with other countries and groupings to allow for transparency and ease of trade. Some of these are: Caricom, USA, Canada, Costa Rica, Cuba, Colombia, Venezuela, the Dominican Republic, and the European Union. "So far so good," said the man that fell out of the 80th story building as he passed the 60th in freefall.
But all is not well in this regard, as signing is not the final step that needs to be taken to bring the agreements into full operation. Some of these are 20 years old and have not yet been completed, and now many companies here in Jamaica are in a bind when compared to their competitors in other Caricom nations. This, in part, is why our performance differs from those of our peers, and also acts as a deterrent in building export enthusiasm.
Our failure to act on the completion of the necessary details that bring agreements to become practical enhancers to trade is nothing less than a shameful act of inefficient bureaucracy, lack of political will or both. The charade needs to stop right now and the private sector as well as the public must know the truth, and the actions that will be taken to remedy this.
I have two graphs that outline the performance of imports and exports to some of the countries that we have agreements with, and I have yet to find any with a significant surplus in our favour. Shame on all of us who sit, complain and do little to attack the root causes of our problems. We reap only what we sow, and so far the outcome is nil.
So far, let me say that the following agreements have either not been ratified or not applied: EPA, Costa Rica, Caricom/DR, and Caricom/Cuba. The reasons that have been advanced in some circles suggest that although we espouse free trade, we are unwilling to grant reciprocity and thereby collect lower or zero import duties.
No wonder we have no production policy as we love to survive on import duties to supplement government revenues, and are too lazy or indifferent to cut out illegal imports.
So we prop up the government coffers through import duties, and borrow money to make up the shortfall instead of committing to productive endeavour. Then we attempt to rationalise our carelessness through convoluted economics that rely on rational behaviour. We should write a bestselling novel on irrational policy behaviour for dummies. Yes readers, I am angry at the system that marks time at best, and reverses more often than not, and yes, The Emperor has on no clothes.
We therefore have only two survival choices. First, we can simply tread water and go nowhere until we tire and drown. Or second, we can divorce governments that lead nowhere and go it on our own, leaving them to their own futile pursuits. It is obvious that no governmental options have the will or the guts to make policy decisions that will enhance growth.
I challenge them to prove me wrong. Until then, I am not holding my breath and I will continue to urge those in my circle of influence to join me in a serious swim to safety. How long can you hold your breath?