SINCE the present government was ushered into power in the election of 2011 there has been a great deal of hope that an International Monetary Fund agreement was necessary to put the economy on a sustained path for growth. A view I hold to be misguided — despite the importance of the programme. Of most importance is our own growth agenda.

The Government, having effectively concluded a deal with the IMF in May 2013 for a 4-year Extended Fund Facility commencing in 2013/2014, seems not to have given manufacturing any pride of place in the expected growth agenda of the Jamaican economy.

The 118-page report issued by the IMF recently only mentions “manufacturing” once; and the context was that HEART/NTA would train and certify workers in that industry as part of a labour market reform. The omission of the manufacturing sector from our primary growth strategy is unbelievable, given the contribution being made by this industry to our economy. Its omission also runs contrary to the IMF’s own expectation of the critical need to “switch from domestic demand… to net exports”. The IMF report names logistics, ICT and agriculture as the sectors that have the potential to drive economic growth. This, while manufacturing has contributed consistently an average of 8.72 per cent annually towards GDP over the last 5 years, compared to 5.78 per cent from agriculture.

Does manufacturing still matter to our economy? I believe so. I agree we are not more competitive in manufacturing at present. This I understand is due, in large part, to government policies and high energy costs. As a result, consumers favour cheaper imported products and our products cannot compete abroad.

I would argue, however, that it would be much more worthwhile for Jamaica to drive domestic demand for locally produced goods while simultaneously increasing exports. I also believe this should be done in concert with agriculture, and they should not be treated as mutually exclusive tasks. Seeking to grow manufacturing will have a more positive effect on improving our balance of payments, reducing unemployment and helping to boost government’s fiscal position through increased taxes. Moreover, manufacturing is one of the most transparent industries from which taxes are collected.

There is a strong linkage between manufacturing and economic growth. Advancing improvement in manufacturing capabilities therefore equates to economic prosperity of any nation. The majority of the world’s emerging economies primed for rapid growth have a strong focus on manufacturing. Jamaica needs manufacturing for growth. This industry can promote immediate economic expansion and job creation. We may not have a few factories with 3,000 workers, but rather 100 factories with 50 workers each. At some time in the near future the labour rate arbitrage in China, etc, that benefits large countries will disappear. Countries with the right combination of favourable competitive attributes will become attractive. We must position ourselves for this opportunity.

What then should be Government’s and the private sector’s focus? Spend on infrastructure (roads, ports, etc) that allows manufacturing and agriculture to flourish. Fast-track clean and effective energy strategies and policies to drive costs lower. Foster more innovation towards increasing local market demands and improve industry actors’ profitability. Align human capital development more towards science, technology and engineering. Finally, position public policy reforms to enable economic development by greater collaboration between policymakers and business leaders. This latter aspect is an awaiting opportunity.

Businesses thrive where there is consistency, stability and certainty in public policies that are developed through dialogue and collaboration. I submit that the manufacturing industry must be engaged, at once, on policy for a competitive and simplified tax policy; the promotion of free and fair trade; low-cost energy that is efficient and secure; workforce talent aimed at the sector; and engineering, science and technology policies that will help to promote advancement in manufacturing. Manufacturing is needed to grow the Jamaican economy.

Garfield A Edwards is a chartered accountant and planning specialist. He may be contacted at: garfieldaedwards@hotmail.com