Phillip
Paulwell: What we are seeing is jobless growth. We are
getting investments, we are getting growth but we are not
seeing the employment being created and that really has to
be a major mandate for the future and we intend to deal with
it in a number of ways. Apart from those jobs that we intend
to create in these sectors that we have identified, large
scale jobs, we are going to have to focus a lot more on the
small and micro businesses because in any economy, this is
where you are able to maximise in a quick way your growth
in the economy.
There
is the major project, Highway 2000 which will create a lot
of jobs and there are some spin-offs from Highway 2000 , the
Vernamfield Development, the construction of fibre optics
along the routes so that you can have IT parks along the route
and of course, very importantly, as far as my Member of Parliament
role is concerned, the Port Royal project.
We
have to have it going but it's going to be done more in a
phased way than the big bang approach because of the difficulties
we had especially since last year in getting some of the major
players to invest US$100 Million that we need. What we are
going to be doing now is to work with the Port Authority using
what they have done in Port Antonio to work towards establishing
a cruise ship facility in Port Royal and then to look at the
island village concept in Ocho Rios that Chris Blackwell did
to get some shopping promenades established in Port Royal
and at the same time while we are doing that, we are re-developing
the housing and other infrastructure support inside there.
Karl
Samuda: I think the most important thing to look forward
to is the establishment of macro economic stability in order
to achieve sustainable growth and by sustainable growth, the
means by which you do that will have to depend on low interest
rates, a stable exchange rate, the creation of job opportunities
especially for the young. With the advent of globalisation,
the indisputable fact is that one has to be internationally
competitive. Regrettably, Jamaica has lost its competitiveness
over the past five years in particular and as a consequence
what we have experienced is, we have experienced a fundamental
shift from production or activities surrounding the productive
sector into one of more designed for consumption where we
are now focusing more on trading rather than on producing
goods and services for export, both domestic and export. In
order for us to be competitive, our people, our human resource,
have to receive a level of training that will make them able
to accept the introduction of applied technology.
The
question of collaboration between the Government, academia,
the trade unions, the private sector must be established and
strengthened and perhaps the most difficult thing facing this
country at the moment is the extent to which we are strangled
by bureaucracy. We need to streamline and simplify the ways
by which we approve projects, the manner in which we pay our
duties and generally speaking, instead of becoming an impediment,
a cumbersome mechanism, Government needs to remove the bureaucracy
so that we don't continue using an elephant to crush a peanut
and that has unfortunately been our experience.
ON
CARIBBEAN SINGLE MARKET AND ECONOMY AND FREE TRADE AREA OF
THE AMERICAS (FTAA)
Phillip
Paulwell: The time-table now is that within the twenty-four
month period we will achieve the Single Market and Economy.
Attempts have been made but I don't think it has gone far
enough and we therefore have to now do a much more comprehensive
public education in our schools, advising our micro and small
entrepreneurs and the business sector.
As
we move to the Single Market and Economy, we recognise the
importance of the FTAA because we can take the benefits of
the Single Market and Economy into the FTAA.
Karl
Samuda: Jamaica is not ready for the FTAA. The fact is
that we have had a growing trade deficit with CARICOM that
threatens to swamp us. We are no longer exporting to CARICOM,
we are importing. We are the source of their wealth within
CARICOM because we have failed miserably to maintain our competitiveness
and as a result they are ahead of us. Trinidad and Barbados,
for example, are far more prepared for FTAA than we are. We
have lost competitiveness primarily because our trade policies
have exposed our fledgling industries to a level of international
competition that has strangled their opportunity to be able
to get up to a starting point where they can then launch into
the third countries market.
We
have strangled them before they had a chance to get up and
get running and what we are doing now is there trying desperately
to play catch up and that is why I said earlier we have seen
a fundamental shift away from manufacturing to importing.
You
have situations where the President of JMA is now into imports.
He has given up manufacturing, everybody is giving up manufacturing.
PREPARATIONS
FOR THE CARIBBEAN SINGLE MARKET AND ECONOMY
Karl
Samuda: Nothing can happen overnight, that's the first
bottom line. Whatever happens is not going to be revolutionary
over the next two years. What we are certainly expecting,
that if elected, just the fact that there is a new team, new
players with some new ideas will generate a sort of interest
in Jamaica and will take a second look by investors who are
no longer interested.
Phillip
had a situation where we benefited from NAFTA which opened
up our markets considerably, gave us facilities which we never
had. We got the facility but what we were not prepared for
it because a Kirk Salmon report that was given to the Ministry
in 1997 showed that Jamaica was the third highest cost destination
of the companies surveyed within our region. So we were losing
because not only were we suffering from the difficulties of
NAFTA but because of our own internal mechanisms that made
us uncompetitive.
When
we face the reality that we are uncompetitive and we have
to do something about it at the shop floor, giving incentives
to investors to improve their infrastructure, to improve their
plant, to improve their investments and to apply technology
with properly trained staff, then we start dealing with what
is ailing us.
Phillip
Paulwell: I think this question of competitiveness is
so critical and fundamental that I just want to spend a few
moments because we have to be careful in recognising that
shifts are taking place and there are certain realities and
there are certain areas that Jamaica has to understand that
we are not going to do well in, and at the same time to recognise
that there are other areas.
Now,
Karl focused almost exclusively on the goods producing side
and I appreciate Karl that there are certain areas in goods
producing that we can still maintain competitiveness in but
not the garment industry as you know it. It has to be a different
industry.
We
are focusing a lot on a lot of the services industries because
these are the fastest growing industries of the world now,
tourism, entertainment, consultancy services, (and) the information
technology revolution.
In
agro-business you are going to find some opportunities. For
example, we are now exploring the possibility of entering
the flavours market. There is this thriving flavours market
worldwide. We are not going to make it as primary producers
of yam, of melon, of onion but when you extract the flavours
and our flavours are richer than many of the competitors,
you are going to be able to sell at a price which will ensure
the viability of farmers. And we now have the technology.
In fact we have just ordered what is called a spinning cone
device which is going to enable us to extract our melon flavours,
our ackee flavours and be able to package and sell them overseas.
So
that is one area that we are focusing on but I think when
we argue we are not appreciating sufficiently the fact that
Jamaica is moving away from being goods producing. Right now
Mexico is complaining that the jobs are going to China which
Mexico three years ago took our jobs. They are now saying
that they can't compete because China is taking over 200,000
jobs in the garment industry. That's an industry that we don't
have a future in unless you move to the upper end which is
the fashion side of business where Jamaica is focusing. Next
month we stage the Caribbean Fashion Week trying to promote
Jamaica as a destination of high quality design, high quality
fashion, greater value added than just stitching button holes
all the days of your life.
ON
PROMOTING BUSINESS DEVELOPMENT
Phillip
Paulwell: We do have programmes targeting all the sectors
excluding none. This year we started with the JMA and we have
had an excellent working relationship with JMA. This year,
every single Friday I am out in the field, not focusing only
on large businesses but those medium size businesses as well,
trying to encourage them to utilise technology for greater
efficiencies and so on and we are seeing some benefits as
a result of that. I think you are seeing now a greater appreciation
now on the part of the private sector. It's long in coming
but it is there now where they have to make a transformation
and we provide the incentives. The Industry Modernisation
Programme is now being heavily called on for getting new equipment,
retooling, and about $2.5 Billion last year was spent on companies
in Jamaica, not only large companies but medium size companies
as well utilising that incentive for greater retooling. We
also have the Capital Depreciation Programme, the Accelerated
Depreciation Programme. Those are all assisting in the retooling
effort.
Karl
Samuda: Phillip said I am emphasising the goods sector.
No such thing because tourism is not considered under the
goods sector, and I think tourism has been the cornerstone
and I have spoken about this repeatedly in Parliament of the
immediate kick-start that we need for our economy. Just to
simply move the occupancy level right up to 70 per cent would
improve our foreign exchange inflows by nearly US$250 Million
per annum which is quite considerable, so that is an immediate
response to our unemployment and to our growth.
The
services sector up to the end of last - the most recent end
of play that he has available to him, that is the last financial
year shows a decline of US$221 Million in that sector. In
the goods sector, the trade balance is minus $1.5 Billion
and it exceeds - the trade deficit alone exceeds the total
export of goods from this country and it's climbing. Now,
you may ask the question, what is propping up this economy.
The current account ladies and gentlemen in the foreign exchange
account, the balance of payment account up to the end of the
year was $723 million in deficit. The IMF considers that unsustainable.
The
fiscal deficit right is now 5.8 per cent of our Gross Domestic
Product, another unsustainable level that the IMF says it
cannot continue and they will not permit it to continue and
have their name used as a staff monitoring agency for accessing
funds from the financial institutions of the world. It's as
simple as that. ``` What we are looking at is a serious economic
crisis in the country, 64% of our total budget is used to
service debts.
ON
JOB CREATION
Phillip
Paulwell: Job creation is the most important issue that
we face on the campaign trail and earlier Karl acknowledged
that the official figures will show that there has been some
slight improvement in terms of our unemployment level but
we cannot sanguine about an unemployment level of 15 per cent,
it's far too high. What we have found in many cases is that
as the economy is transformed, people are doing a number of
things that we are not really taking note of. You will see
a great experiment being done in Portmore now where we are
using waste water from the housing development to regenerate
some land back into farming, over forty hectares. But what
I am saying is, it can't be old time farming, you have to
now understand there is a market for certain things and that
you have to go and get it and also, and this is where the
younger people come in because I think they might be able
to more appreciate the need for greater value added and to
use technology. ``In St. Elizabeth now, they are drying pumpkin
and making it into pumpkin powder which has a longer shelf
life and greater marketability and this is the way we are
gong to take our agro business and I am determined in the
next term that we need to get some higher profile being put
on agriculture.
Karl
Samuda: Government needs to look at bringing industries
into the communities and not necessarily the other way around.
We have got to go into every community across the country
and establish facilities where you can have mini factories
set up. Where you access the technology that is derived from
these high flying trips that Ministers take abroad, where
people offer technical advice, where you can get the guys
from Taiwan and other sections of China, the whole Far East,
experts in the field of craft, experts in the field of small
item manufacturers, like little curios and so on, you go in
the shops, in the most exquisite stores in New York, Miami,
anywhere and you see these little items, they are expensive
and when you check where are they made, Taiwan, China, this
, that. How are they made? They are made with human hands
but there is a technology that's applied to them. I am saying,
import the technology, bring it to the inner cities, bring
it to the communities, establish the facilities in what I
call special community economic zones, you have the population
ready to be trained, give them that access and give them a
kick start by funding them.
Look
out for part two of this feature
