Have Jamaicans lost the culture of production?

Wednesday, September 03, 2014

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OUR large and persistent trade deficit means that Jamaica is spending more on imports than it is earning from exports and tourism, and the gap between expenditure and earnings of foreign exchange is being bridged by remittances and loans.

Clearly, as a country with a debt/GDP ratio of almost 150 per cent — minus what little the International Monetary Fund programme has managed to shave off it — Jamaica cannot afford to borrow anymore.

Remittances have grown steadily over the years but it is not a variable we in Jamaica can increase by domestic policy measures. The amount of remittances depends on the charity of Jamaicans living outside of Jamaica. That leaves us with the option of spending less on imports and increasing foreign exchange earnings from exports other than tourism.

Greed expressed in the unlimited profiteering by too many of our merchants, both corporate and individual, will stifle local productions by importing products, especially food. The Jamaican consumers have exhibited little commitment to local producers often purchasing more expensive and inferior foreign products while overlooking better-quality Jamaican products.

The urgent task therefore is to increase foreign exchange from exports. The problem is that Jamaica seems to have lost the culture of production, and the will, the confidence and the belief in our capacity for internationally competitive production. Yet we retain that confidence in tourism. We need to learn how tourism became the engine of the economy and repeat that strategy.

First, exporting must be made a priority in the Government's economic growth strategy. Second, an export strategy must be formulated. None exists because it has been created by the Private Sector Organisation of Jamaica, Jampro, the Planning Institute of Jamaica, Jamaica Manufacturers' Association or Jamaica Exporters' Association. Third, expose production to international competition as was unavoidable in tourism. Fourth, support exporters who perform, tolerating no excuses such as high cost of energy.

One inexpensive way in which the Government can support exports is with export market information, the lack of which is often the barrier to exporting. This information should be a public good, freely available to the public and covering such issues as what goods and services are in demand, where they are in demand and by whom, what are the standards required and what is the prevailing price in global markets.

Removing the information deficit would enable local producers to be converted into new exporters, encourage the establishment of exporters, and facilitate existing ones to expand their output, introduce new exports, and diversify export markets.

We know we are speaking to the converted. But let's do it.




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