Talking the logistics hub to death...and we are good at that!

Thursday, January 30, 2014    

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IN the old days when a runner committed a false start, he or she was not disqualified but was put to start several paces behind the starting line. Regarding the creation of the logistics hub, Jamaica is like a runner who was late in hearing about the race and turned up late to the starting line.

In addition to this, Jamaica is in the position of starting the race several paces behind the starting line and the other competitors.

Since the world economy can only support a certain number of global logistics hubs, then the race is truly on. Jamaica, by starting behind the other competitors, will have to run much faster than the others if it is to get to the finish line to join Dubai, Rotterdam and Singapore as global logistics hubs.

The logistics Performance Index for 2013 produced by the World Bank indicates that this is going to be a difficult task. According to this report, Jamaica is ranked 124 of 155 countries. That is a lot of catching up to do if Jamaica is to provide world-class multimodal forms of transportation.

While infrastructure is only one dimension of the establishment of an internationally competitive logistics hub, it is critical to every other aspect. The questions that arise are, first — assuming everything falls into place — does Jamaica have enough time to catch up in having world-class infrastructure? Second, how much will it cost to bring Jamaica's infrastructure up to acceptable standards? And third, where will this money come from to undertake the installation of new and/or improved infrastructure?

Any estimate of the cost at this stage before there is a blueprint for the logistics hub would be a guestimate. The only certainty is that an enormous amount of money will be required.

Given the debt burden of Jamaica and the need for a very tight limit on government expenditure and borrowing, the Government can contribute little in cash or kind. The amount of money involved is far beyond the capacity of the local private sector; although Jamaicans must be given every opportunity to provide the private investment, if necessary as joint ventures with foreign investors.

The only feasible option for financing infrastructure on a sufficient scale is private foreign investment.

To facilitate this Jamaica has to create the conditions conducive to attracting foreign investors. Does this sound like we should be hurrying up with our negotiations with Chinese investors?

If we had a dollar for every word we spoke in this country, Jamaica would be the richest country on earth. We talk things to death. Let us ensure that the logistics hub is not buried under a multitude of platitudes in a cemetery of inaction. Having a good idea, a suitable location and much enthusiasm is not enough. Time for some strategic policy decisions.





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