Manufacturing pains from civil unrest
THE manufacturing sector may take over six months to recover from the three days of unrest arising from security operations in Downtown Kingston last week, says Jamaica Manufacturers’ Association president Omar Azan.
The manufacturing sector has declined for five consecutive quarters as a result of compressed demand in the global economic downturn. Azan said rising unemployment, inflation and its effects on manufacturing inputs such as electricity, water, gas and telephone use have all contributed to the decline. He said there was an expectation that a rebound might occur in the next six months, but this optimism has been derailed due to violence prompted by the security forces’ attempt to execute an arrest warrant on Tivoli Gardens strongman Christopher ‘Dudus’ Coke.
The unrest caused many businesses to shut down and economic activity within the corporate area came to a virtual standstill.
“I don’t see a rebound at least for another six months and, with what has taken place, I’m not sure what kind of rebound we would have,” Azan said.
The manufacturing sector was heading slowly for growth it would appear as it moved from a 6.1 per cent decline in the January to March quarter of 2009, to a 2.3 per cent decline in the corresponding quarter of 2010. Food and non-alcoholic beverages were already up 0.7 per cent in April, and inflation slowed to 1.3 per cent in the month.
Azan said, as a result of these issues, the local consumers must rally around the sector so that it can generate more production, employment and revenue, from which taxes can be paid over to the government, to grow the economy. “Now more than ever we need to support the local industry,” Azan said.
However, despite the effects of the unrest in Kingston and the possible fallout in the Manufacturing sector, Azan said he supports the actions that the security forces have taken to bring back the city to a state of normalcy.
He noted that the effects of the operation will have a more positive long run effect if it serves to reduce the level of crime within the country.
“We can look at it as a plus, in that it will be good if we are going to get the guns off the streets because crime is a major deterrent to investment in Jamaica,” Azan said.
“I think it will be a positive more than a negative. We may be a few months down in revenue but there will be a greater effect in the long run,” said Azan
“What’s important is that we try and ensure that law abiding citizens are safe and that we are able to carry on as best as we can with our business,” he said. “Lets hope that we can bring this to an end as soon as possible.”