The JLP's Karl Samuda (left) and the PNP's Phillip Paulwell. - Rudolph Brown/Staff Photographer

LAST week both the Minister of Industry and Commerce and Technology Phillip Paulwell addressed The Gleaner's Editors Forum at its North Street headquarters. The debate was lively with both men outlining creditable plans to attract foreign investment and executing a development path for the country.

Samuda and Paulwell MINISTER OF Industry, Commerce and Technology, Phillip Paulwell, debated Jamaica's development policies with Opposition shadow spokesman Karl Samuda last week.

Today, the Financial Gleaner, presents extracts from the Forum:

ON THE PRACTICAL IMPLEMENTATION OF PLANS

Phillip Paulwell: My hobby horse has been the ICT business, but even in inner city development, I am doing for example three projects now of ornamental fishing in East Kingston where we get a group of youngsters and we provide them with the fingerlings. In five months, the fish are purchased by a manufacturer who exports them. I think things like that are going to be increasingly more important.

We have to aim to train our people and one very good area is the ICT industry. We need to take that into all the communities because many people hear us speak about 40,000 jobs but that is a joke to what we can achieve.

Jamaica with our proximity to the richest market in the world, and because people are apprehensive now about travelling to India and those other places, we stand out because we have a labour force that speaks good English when it wants to or it can be trained to do so, and that has serious cultural blends with the US. We would be able to perform very well in this area once we are able to get our act together.

Karl Samuda: My Minister is very optimistic and there is nothing wrong with optimism, but the fact is, that it's not possible. One of things we agree on is the fact that the ICT sector offers great opportunities ­ far greater opportunities than the apparel industry in the 1980s. It can be an explosive area but it has to be taken step by step, it has to be carefully done. And the whole question of training our people, you have no idea of how hard - and I am talking now on the ground again - it is to get a team of people to be trained. The drop out rate is horrific.

ON ENABLING PEOPLE AND BUSINESSES TO CREATE JOBS

Karl Samuda: In my opening comments I spoke about the collaboration between academia, the unions, the private sector and the Government. I believe entirely that if you don't have this collaboration, you are not going to get very far because we are only there to facilitate. Government only facilitates ­ we don't create, we don't build.

Phillip Paulwell: Recently I spoke at a graduation of MBA students and the valedictorian who preceded me said: 'Oh boy, now that we spent so much money to get our MBAs, we have spent so much time and effort, what is the Government going to do to get jobs for us.' I had to challenge her because I don't believe at the formal level we sufficiently inculcate in our people the positiveness of doing business and that there is nothing wrong with trying to create their own. Especially those going through an MBA Programme should not be thinking about working for anybody else. You want to create jobs for others. What we have been doing in the smaller micro sector is just that, to try and encourage people to create jobs, but also coming out of the University of Technology there is a clear proposal now for a true venture capital window. There is nothing wrong with the University spawning this and the Government is prepared to support this.

What they have been doing is to engage a number of international agencies and local commercial interests to establish a fund that will be genuinely venture capital. The university now has a Technology Innovation Centre where they now incubate a dozen or so companies that is going to expand to deal with your higher level human resource.

But in Government, you have to be dealing with all the various elements and we can't allow the inner cities and rural areas to continue to decay. What I mentioned about the micro projects involving ornamental fish and the farming, those are designed to arrest those problems at the lower level.

ON INCENTIVES FOR LOCAL COMPANIES TO INVEST

Phillip Paulwell: We have an excellent example of a local company that has received some of the INTEC funds and it has done very well. Westcom in Westmoreland started with 45 people, they now are up to 200 persons and they are doing very well. In the remodelled INTEC programme, you will note that the NIBJ won't have the resources to lend large funds as before. We are now transferring much of that to Self-Start to assist Jamaican businesses primarily, and there is a maximum ceiling of $10 million.

When Digicel was coming to Jamaica, I said to them it is important for you to try and secure joint ventureship with Jamaican entrepreneurs. We gave them a list of top quality local companies and to every person they went to they were told, boy this economy is not moving and telecoms is not our field - and they were rejected. Now, people are disappointed that they didn't take up those opportunities. We have to get our people to understand the opportunities that exist in ICT and to use the good examples that we have like a Westcom and a Sitel and get them on that track.

There is nothing that is available to a foreign investor that is not available to the local investor, absolutely nothing.

Karl Samuda: The first thing we have to do is encourage local savings and we have a programme to deal with savings by giving incentives for persons to save up to 20 per cent of their profit tax free if they invest it in matters dealing with health, education, and pension. Because you gain momentum at the local level by generating internal savings - that is one of the key factors for economic growth ­ the locals must save so that you are not dependent on borrowed funds.

The second thing is, to encourage activity in production over trading. What has happened with us is that we have literally facilitated the import side of our existence as against the manufacturing and exporting side, so we are now more dependent. Each time I mention it in Parliament, my good friend Phillip gets up and says, I am living in the old time world because the new world is one where there is a free flow of information, goods and so on.

We recognise that, but we cannot recognise it to the extent where we destroy our local producers. I will go down fighting for that.

A local man has a business, gets himself in trouble because of Government's financial policies that created high interest rates which puts him in overdraft, the overdraft starts to mount, it starts to threaten his business, house, everything. He can continue his business if he gets his interest capitalised and extended over a long period, but oh no, the structure does not enable the capitalisation of debts; it does not even encourage the consolidation of debt for manufacturing. You go to NIBJ or DBJ, they will tell you the same thing, you have to give them your house, you have to give them the keys to your mother's jewellery box, you have to give them everything before they even talk to you.

So you are dead in the water, you can't access any money, you have your business, you can operate like any of the companies we have divested. Now, a sensible approach it occurs to me, would say let us look at the debt, let us restructure it, let us capitalise, let us refinance it, put it over a long period of time.

Another thing, in America, at 80 years old you can get a thirty year loan because they are not depending on you paying it off. If you die, insurance pays it off. They insure the loan. Simple. In Jamaica - 'Lawd we can't give you a loan because you are now 60 and you may go dead.' Madness! We are dinosaurs in terms of creating financing for the local businessmen.

Phillip comes here and tells you and will always tell you how the Government supports small business and local business. The first chance the Government had, the Minister of Finance had to do something for the local furniture manufacturers when he refurbished the new building in the Ministry of Finance, he gave it to a foreign company. Now, if the local company is not even as competitive, the spin-offs of employment and the children whose school fees get paid, because he is able to get work from the Government would help the domestic situation. But no, we must be globalised to the point where we give away what can be made locally to a foreign company where they don't put one Jamaican hand to make it.

ON CUTTING THROUGH THE BUREAUCRACY

Phillip Paulwell

It's not fair to say that we have not seen tremendous improvement in the bureaucracy. We have done a number of things in government, apart from the whole liberalisation/deregulation process of the 1990s. We removed licensing and those things. Before our time, it would take you two months to get a motor vehicle license and you had 17 different categories of import... The major problem now in relation to business has to deal with Customs. Right now you can access the Registrar of Companies files via computer. You pay a fee and you can trace any company you want in Jamaica. Before now you had to go there and pay a fee and stand in line to go through the papers. So we have to acknowledge that with the creation of certain executive agencies we have seen tremendous improvements.

Our business people are having difficulty in relation to getting goods out of Customs and the major reason for that has been the fight with drugs. We have to acknowledge that not only drugs but also illegal stuff, uncustomed things that are not properly declared affect trade and industry and I think that is a major difficulty.

Of course, in certain areas there is still some amount of overlapping and we are determined to remove that. For example - and we have conceded this - in one area you have the Bureau of Standards, the Ministry of Agriculture and the Ministry of Health engaged in ensuring the proper certification of goods to make sure they are wholesome. Technology is going to assist us and Customs is now far advanced in the Modernisation Programme which will ensure pre-clearance of goods and there are some companies already who are able to clear their goods within twenty-four hours.

Phillip Paulwell

That's only a small part. One of the most devastating things in terms of giving a local businessperson who has had difficulty, is disposing of their own property. They want to cut it up, but with the bureaucracy involved, it's just almost impossible to be able to dispose of your own assets within a year after having the desire and taking the first step. You have to go to about five/six agencies and you have to wait on each one, and if one disagrees you have to have a meeting. It's a mess. And then after it has been approved and after you have sold the land, it has to go to Titles Office which takes another eternity. The other day when I went there, I called the guy there, he said you are at the bottom and it's two to three months before I even see it. I am talking from personal experience. I accept the idea of a one-stop clearance centre, and to a certain extent, JAMPRO was going to fashion that. What we now have at the Development Council level is a facility where at the highest level where there are major problems with projects, it comes and all the agencies can resolve any outstanding issues. A Business Facilitation Board which will be chaired jointly by myself and the private sector.

ON CREATING MASS EMPLOYMENT

Phillip Paulwell

They can't stop the progress and we certainly have established a list of achievements in terms of telecoms. We are liberalising in March 2003 fully and we have not recorded the tremendous investments as a result of that liberalisation which was scuffed at by the opposition. With that liberalisation will come more businesses. The ICT sector is going to grow because we have now established companies that are good models, like Teleservices and Sitel, and it will attract your Fortune 500 companies which is really where you want to get eventually.

Phillip Paulwell

We are talking big business and you are talking tinkering. The focus will be the search for investors to introduce mega projects and the first on our list of priorities - to relieve the unemployment of the South Cost, Kingston Waterfront and South St. Catherine areas - is the development of 260 acres over in Fort Augusta to create a free zone, duty free shopping and resort, manufacturing and assembly.

Remember in the old days we used to have a thing where as Minister of State in the Ministry of Industry I used to scuff at people bringing in finished products and assembling and then selling it, in other words bringing in parts and assembling it. The world has shifted now and we can introduce that as a major element within our structure - to assemble goods in Jamaica because today we have seen where a car is made with parts from all over the world and assembled at one point. We are going to try to introduce an investment climate that is going to encourage people like we did with AT&T when we established Digiport in Montego Bay where we did not as a Government spend a penny. They came here and invested 100 per cent of their money.

In Jamaica today, Phillip is going around giving away Jamaica's money to try to encourage people who come here, take it and leave. What we need to do is to focus on those industries where people can't scamper overnight and disappear. The Fort Augusta project will be undertaken in the first term of office because the approval process, the design, everything, is going to take time. To transform that part of Jamaica, it is going to be a medium and long term investment.

Now, in terms of the immediate thing we are going to increase our marketing budget for tourism, to show that we can promote tourism in a more dynamic way so that we can raise our occupancy - instead of having the tourism sector as it is now in a state of free fall because we have not kept pace with advertising your market.

ON JAMAICA'S COMPARATIVE ADVANTAGE AND THE INDUSTRIES WORTH SAVING

Phillip Paulwell

We have established a National Industrial Policy that came out of tremendous workings, studying and understanding the economic landscape of the country. In that Bible we have enunciated the industries that we believe are winning industries and we have named them. We said that tourism is going to continue to be a strong industry and save and except for what's been happening over the last year with the US, we have been growing in tourism and we need to get back to a path of growth and we need to deal with the Port Royal project alongside that. I for example believe that we have not done enough in terms of heritage tourism, and that's why we are pushing Port Royal, we are pushing Falmouth and those, but you are not going to get away from sand and sea, that is going to continue to be the bulk of our tourism efforts in the foreseeable future.

Apart from identifying the industry, what we want to do is create the environment where people can go and explore, I don't want to be saying to a businessman that this sector that you have been involved in for ten years you must move away from it, even though he probably should do that.

On the sectors we will leave behind, we are not going to make it in 807 production. China eventually will lead the world and Mexico will suffer as a result, so let us not focus on that, let us look at the fashion industry and see how we are going to bring together our fabulous designers and craft people to develop a new industry now called fashion.

Karl Samuda

Well, our proposal is that we are going to build an additional 10,000 rooms in the next seven years that will expand the capacity of the industry. Simultaneously, we are going to be dealing with the question of refurbishing by giving assistance to small hotels who refurbish and bring their product up to scratch. We are going to increase marketing and advertising so that we can raise the level of occupancy and we are going to embrace the other areas of tourism such as, for instance, cruise shipping, pleasure shipping, we will have to look at legislation concerning the movement of boats and aircraft as they arrive in Jamaica because that's an opportunity that has escaped us.

In terms of the specific areas, agro industry is a key area where we transform primary raw material such as ackees, fruits into finished products, where we get the maximum value added ,and we are going to target the ethnic market abroad. We will be targeting specifically the six million Jamaicans who live away from Jamaica, plus the other Caribbean and Latin American people who like our taste and the products we produce - to immediately enhance our marketing possibilities.