The Inter-American Development Bank's (IDB) top Caribbean executive Tariq Alli said that the hemispheric bank is championing the growth of micro, small and medium-sized enterprises (MSMEs) to drive the sustained economic growth of Jamaica.
Pointing to IDB studies that indicate MSMEs, which number about 400,000, contributing around 44 per cent to Jamaica's gross domestic product, Alli, the IDB country representative for Jamaica and general manager of the Caribbean Country Department, said businesses in the MSME group are "a real priority for the IDB".
This, he said, is the reason for the collaboration between the bank and the Ministry of Industry, Investment and Commerce (MIIC) on the launch of the MSME Business Roadshow, which took place Tuesday at IDB's Jamaica office in St Andrew. Alli revealed during the event that both teams have been working together on the initiative for over a year after realising alignment in strategies.
The MSME Roadshow aims to address several pain points that MSMEs face including managing intellectual property, meeting and maintaining standards, internationalisation and exports, among other challenges, over a two-year period. The IDB has provided US$250,000 or approximately $37 million toward the project.
"It will have several services in one location for companies at different stages in their business life cycle, from those that are just starting to companies that just starting to export. It will bring much-needed services to entrepreneurs in the north, south, east and west," Alli said.
In the first phase of the programme, the MIIC and it associated agencies will stop in Kingston, Mandeville, Ocho Rios and Montego Bay to offer business development services to MSMEs.
While acknowledging that the road show will not resolve all the challenges of MSMEs, Alli pointed out that the objective is to "help put entrepreneurs on the right track to achieving their financial goals.
"MSMEs are critical drivers to the sustained economic and social development of Jamaica. Development cannot happen without their growth and I think that such an initiative will make the life of entrepreneurs a bit easier and support them as they seek success," the IDB official stated.
However, he argued that while the country earns international praise and acclaim for its macroeconomic indicators continue to improve, including significant debt reduction and developing adequate buffers to shocks, "the day-to-day operations" of MSMEs do not reflect that economic reality. In this regard, Alli welcomed the Government of Jamaica prioritising MSMEs at the forefront of its economic development agenda and enacting policies to support their growth.
At the same time, he pointed out that working with MSMEs formed part of the IDB's country strategy of working closer with the private sector
"A significant pillar of the IDB's country strategy [for] Jamaica is working more closely with the private sector. This has been echoed in conversations with the authorities, that they see the private sector reactivation a key to leading the path to economic growth for the country," the IDB country representative said.
"But we know that the private sector is more than just the big name companies that we are well very much accustomed to — the household names in Jamaica. It involves the very, very important MSME space," he continued.
The MSME Roadshow will complement the IDB's Boosting Innovation, Growth and Entrepreneurship Ecosystem programme, which is being implemented by the Development Bank of Jamaica.
Minister of Industry, Investment and Commerce Senator Aubyn Hill, who spoke at the launch, noted that the Government of Jamaica is aware that supporting the MSME subsector is crucial given the important role it plays in creating jobs, strengthening communities, and increasing contribution to macroeconomic growth and sustainable development.
"This strategic and focused effort at engaging with and strengthening the MSME sector, through this MIIC/IDB MSME Business Roadshow is critical to the country's long-term economic growth. It comes against the background of the ministry's development and ongoing monitoring of the nation's MSME and Entrepreneurship Policy, and our recognition that many players within the sector face major challenges in their daily operations, thus impacting their profitability and sustainability," he explained.
Among the challenges he listed were the lack of formalisation, capacity building, upskilling, financial management and marketing initiatives.
In tandem with the road show, the MIIC will be hosting capacity building workshops with the Jamaica Business Development Centre in public procurement.
At the same time, the MSME Roadshow will also showcase the opportunities under the Productive Inputs Relief (PIR) for qualifying manufacturers. The PIR is an incentive available to qualifying manufacturers to assist with the duty-free import of raw materials, intermediate goods, packaging materials and equipment to go into the manufacturing process.
Senator Hill said his ministry estimates that 816 companies have benefited from the incentive with 202 in the last year receiving approvals valuing around $88.5 billion.