The major sectors of Jamaican society reported mixed fortunes in 2003, a year in which the pendulum swung violently. The Government was forced to flip flop over its tax package but tourism and bauxite were big winners. The Sunday Observer invited some sector leaders to take a last look at 2003.

Many of the larger Jamaican manufacturers were forced to swim against the tide in 2003, citing the perennial problems of high interest rates, bureaucracy in government, competition from illegal imports, high utility rates and crime.

Adding to their woes were devaluation of the local currency and taxes associated with the 2003/2004 budget. Of particular distress to the sector, according to Doreen Frankson, president of the Jamaica Manufacturers Association (JMA), was the two per cent non-refundable user fee that impacted negatively on production and planning.

Some local companies also took the decision to invest in other countries, the investment climate being more favourable in the manufacturing sector.

“Manufacturing companies have reported that in some countries they have benefited from special export programmes, special grants, and loans of between four and six per cent, and assistance with factory construction,” Frankson said.

She said that a number of local companies had also been engaging in contract manufacturing in other countries, including Trinidad and Tobago, Costa Rica, and Mexico, where the goods can be produced at a more competitive rate, then shipped and distributed in Jamaica.

“What this means is that Jamaica has forfeited employment, expansion of manufacturing and those sectors linked to manufacturing, increased tax earnings, and a better standard of living for Jamaicans,” Frankson complained.

In spite of the difficulties, however, the sector achieved a number of positives, such as its successful lobby in May, to have Finance Minister Omar Davies re-implement deferral of GCT on packaging material. A policy change announced during the budget required manufacturers to advance GCT on imports of packaging, but through the efforts of the lobby, by July the GCT on packaging material was again being deferred.

Currently under active consideration by the government also is a JMA proposal that includes recommendations for kick-tarting the productive sectors through retrofitting and retooling. A technical team working on this package has been mandated by Prime Minister PJ Patterson to present a report to the Development Council, and represented on a committee headed by Dennis Morrison are the JMA, Jamaica Agricultural Society (JSA), the Jamaica Exporters Association (JEA) and the Jamaica Business Development Centre.

Also launched by the JMA in 2003, was an aggressive campaign to assist producers in “taking back the home market”. The campaign which has focused its efforts on the uniform and furniture sectors, has been working to cluster manufacturers in the uniform section of the industry to seek some of the large local contracts. The Association has also been seeking to ensure that the government puts a portion of the taxes manufacturers pay, toward supporting local industries in the form of uniform purchase.

Through its participation and defence of the interest of manufacturers at major trade negotiation meetings during the year, the JMA stepped up its efforts to prepare the manufacturing sector for the looming Free Trade Area of the Americas in 2005. Meetings attended included the eventful Fifth Ministerial Meeting of the World Trade Organisation, the Eight Ministerial Meeting of the Free Trade Area of the Americas and a number of bilateral meetings on the Caricom side.

In October, the JMA and JAS, which have agreed to collaborate on issues of international trade and to strengthen linkages between their sectors, signed a memorandum of understanding.

Small businesses

Many small traders who have not upgraded their business practices, are floundering and finding it increasingly difficult to compete against the” MegaMarts and super stores”, according to Dena Davis, president of the Small Business Association of Jamaica (SBAJ), whose reflections on the fortunes of her sector in 2003 paint a gloomy picture.

“I don’t think our people are being educated as to where the world and this economy is going and that you can’t do things in the same old way. We have a number of traders as members and they continue to trade in the same way that they have been trading since 1989/90 when certain goods were scarce and there were no ‘MegaMarts’ and ‘Super Plus’ supermarkets. These super stores are coming out with things that are much cheaper than what small traders can afford to go up and buy and come down and sell,” she said.

Davis said that small manufacturers had not re-tooled sufficiently and were therefore “not feeling the three per cent growth that is being talked about”.

The SBAJ president is of the view that the government should focus more attention on small businesses and that there should be a senator with responsibility for the sector. “It needs some injection of new energy, drive and motivation and training. I feel that the government should decide to focus on the small business sector. It is one thing to be able to get in the large investor who can employ 400 people at one go, but if I train 20 or 30 small persons who are in business, we might be able to get the employment that we are looking for.”

Interest rates which started the year in the low teens, then moved to the high teens before shooting up to 26 per cent also affected the sector, Davis said.

“The fact is that the sector can’t manage that kind of knee jerk situation. It is too fragile, so what you find is that some people started out well but by year end started to flounder because they cannot now manage the interest rate,” she said.

Exporters

Exporters experienced their share of ups and downs, but according to Jamaica Exporters Association (JEA) president, Dr Andre Gordon, they were successful in “laying some of the groundwork and achieving some successes that you will see multiplied next year”.

Performing reasonably well during 2003 was export of fresh produce, driven by an actual increase in the volume of root crops and horticultual items. The total value of exports climbed from US$24.17 million to US$27 million. Gordon attributed the improved performance to better weather.

“We didn’t suffer from the problems we had with weather last year and so there was better production in terms of volume of root crops, vegetables, flowers and other horticultural items,” Gordon said.

But perhaps the highpoint of 2003 for the JEA was the collaborative work done with JAMPRO, through its Jamaica Cluster Competitiveness Project to develop a 10-year strategy that the private and public sectors can agree on and work towards. The project to reform the competitiveness of Jamaican companies at the firm, sector and national levels has already made significant advances in the areas of tourism, agri-business and entertainment. Gordon said Jamaica would see the benefits of the project in 2004.

In the area of agri-business, the cost of packaging inputs for processors during 2003 had been significantly reduced, through the project, Gordon said. “We have been able to get processors to work together in terms of joint buying of raw materials and have managed to attract better prices for them. We have been able to have an overall reduction in raw material costs to the processors that have participated by over 12 per cent and of that the cost of packaging is a major contributor.

The Cluster Project has also been responsible for bringing major distributors to Jamaica to give the agri-business community insight into how sales incentive schemes and specific relationships with distributors drive them to push certain items as against others. “Because of this, some companies have managed to change their relationship with their distributors and have seen a signficant increase in their export sales, some as high as 40 per cent since August when those changes were made,” Gordon said.

In the area of tourism, Gordon added: “We have been working with the Jamaica Hotel and Tourist Association and the Jamaica Tourist Board and others to come up with a unique programme that will have visitors come in and stay at small hotels, spend time in the small attractions, and experience Jamaica in a way they haven’t experienced it before.”

The JEA is also satisfied with the groundwork it was able to lay this year to enable two more ackee processors to export to the US. The Food and Drug Administration (FDA) has already approved four ackee processors and two other processors are awaiting final approval. The FDA seal of approval has resulted in ackee exports moving from US$.5 million in 1999 (before approval) to $8.5 million in 2002 and exports for 2003 are expected to maintain or surpass last year’s level.

A Business Anti-Smuggling Coalition (BASC) chapter has also been launched in Jamaica, and two companies, Wray and Nephew Limited and Red Stripe, have been certified by BASC.

“This means that these companies are able to export their products into the US much easier, without the strict security scrutiny that would normally occur because they have been certified by BASC,” Gordon said.

Devaluation was a two-edged sword for exporters and while some companies increased the Jamaican dollar value of earnings some JEA members who are also manufacturers, suffered severe exchange losses. Because of the rate of depreciation they were unable to recover their costs on the exported items.

“We have information about some of our members that had previously concluded contracts at a certain price and had to absorb losses due to exchange rate depreciation,” the JEA president said.

Trade Unions

Based on the dialogue employers, trade unions and the government have been holding in 2003, Danny Roberts, Vice President of the Jamaica Confederation of Trade Unions (JCTU) appears more hopeful now that a social contract may be forged than he was in 1996/97 when attempts to forge a contract were unsuccessful . He said that in talks this year “some initial very positive steps” have been taken. “There is a willingness on the part of the three stakeholders to (deal with) the concerns of each in order to arrive at a consensus for all,” Roberts said.

Roberts said that the trade unions had made it very clear what were some of the issues “which prevented the process from being completed the last time”. “I think that if that is understood and if we can sit down and look at it again, I think that progress is going to be made this time around,” he said.

He said that the original social contract concept was misdirected because it emanated from a desire to contain wages. “I think that there is a greater sincerity on the part of the social partners to enter into a social dialogue now,” Roberts said.

The JCTU vice president said that attempts during 2003 to foster greater levels of labour management cooperation were not as successful as had been hoped for. Some strides were made in the efforts to improve productivity and to push the agenda for labour market reform but not much headway was made during the year in regard to the latter, he said.

Roberts said that the challenges facing Jamaica as a result of the FTAA and regional trade in 2003 and 2004 would have to be looked at in two dimensions. “We have to look at it both regionally and globally as well as locally, he said.

Agricultural Sector

Senator Norman Grant, president of the Jamaica Agricultural Society (JAS) said that not withstanding the level of fiscal difficulties being experienced by Jamaica, figures available for the third quarter showed that the farmers and agriculture had rebounded and “are seeing a growth in excess of seven per cent”.

He said that during 2003, coffee had done reasonably well, bananas were rebounding and sugar was also showing a “good sign.” Non- traditional crops had done “pretty well” and beef was on the rebound. But enough cocoa was not being produced as the price being paid to the farmers was a disincentive, Grant said.

The JAS president listed the Praedial Larceny Bill, now before a joint select committee, the tillage service developed for farmers, proclamation of November 25 by the governor-general as ‘Eat Jamaican Day’ and the establishing of alliances between the JAS and the JMA, Digicel and the Jamaica Business Development Centre as high points of the society’s activities during 2003.

A preliminary report from a Price Waterhouse audit of the JAS was tabled at the December board of management meeting and the society had started to implement corrective measures for some of the weaknesses that had been identified.

Grant said that the $60 million JAS debt is being sorted out. “When I took over (last year), it stood at over $60 million and we have recruited a legal officer who is meeting with the society’s creditors and all of which is aimed at presenting a credible and keen statement of capital employed for the JAS, as any other private sector company, to be properly managed,” he said.

Human rights

Dr Carolyn Gomes, executive director of Jamaicans for Justice (JFJ), the human rights watchdog, is of the view that the year under reflection in terms of human rights both locally and internationally was one of “ups and downs”.

The killings of two men and two women at Crawle, Clarendon, by members of the now disbanded Crime Management Unit (CMU) early 2003, and the fact that the issue was still outstanding was a severe disappointment, Gomes said.

“Crawle has fallen into the Director of Public Prosecution’s (DPP) deep black hole which seems to suck in cases and never release them. Crawle remains an open wound that needs some healing,” Gomes said.

She also expressed disappointment at the government’s handling of the children’s homes issue and said that the public had no idea as to what had been done in regards to the implementation of the recommendations of the Keating report.

The report exposed problems in regards to human rights issues in Jamaica concerning the treatment of children in children’s homes, Gomes said.

The Jamaican government needed to take urgent action to satisfy the Inter-American Commission in respect of a petition brought by JFJ on behalf of Michael Roberts (pseudonym for Kay Osbourne’s adopted son that prompted the KEATING report) and so remained under a precautionary measure.

Gomes, saying that additional investigators had been promised for the Police Complaints Authority but had not yet materialised, expressed disappointment that the committee appointed to oversee the implementation of the recommendations of the Committee on Crime and Violence had achieved very little during 2003. She said that Susan Goffe, the JFJ chairman who was a member of the committee which met every other month, had resigned in despair during September.

But Gomes saw some positives during 2003, such as the Use of Force policy announced by Commissioner of Police Francis Forbes near yearend. But Gomes was cautious.

“There have been some positives such as the Use of Force announcements which were important. But we await anxiously the actual work that is needed to enforce it and have accountability,” Gomes said.

Churches

For the churches in 2003, “the more things change the more they remain the same”, according to Rev Phillip Robinson, president of the Jamaica Council of Churches (JCC).

Robinson said that the primary problems of the society, such as crime and violence, and the corruption that had not yet been harnessed, as well as the widespread indiscipline and some degree of injustice continued to plague the society.

The man of the cloth was concerned too that even though people were living longer, health care was becoming so expensive that many people who visited the doctor could not afford the drugs prescribed. He said that he was also troubled that Jamaica was a nation about to gamble away its future and real fortunes.

“We seem to be finding answers in some things which appear to be economically sustainable for the moment but have socially serious consequences and are certainly not something that we can depend on for the future,” he said.

“Gambling has spread and there is a proliferation of gaming activities which are not as productive as one would expect an economic activity to be and will have far reaching social consequences.”

But Robinson took heart from Information Minister Burchell Whiteman’s expression of caution and concern recently while debating a particular matter regarding the gaming industry, that political expediency too often overshadowed wisdom in decision-making and popularity took precedence over performance.

However, the JCC president was upbeat that the midst of all the economic challenges facing Jamaica in 2003, there were entities in the country that were excelling. Two such were Manpower and Maintenance Services and National Commercial Bank (NCB).

Manpower and Maintenance Services had made its mark and Audrey Hinchcliffe, its chief executive officer, was recently awarded the Ernst and Young Caribbean Entrepreneur Award for the service sector, because of the corporate culture of the company. He believed that in a tight economic climate, Hinchcliffe’s company had been getting impressive contracts to provide janitorial services to such places as the Norman Manley Airport and University Hospital because of the high standard of service rendered.

He said that the revitalised NCB, under Michael Lee Chin, was another positive example.