Ashford W. Meikle, Staff Reporter
Ambassador Gerd Jarchow
JAMAICA CAN achieve economic sustainability but first it must invest in education and small and medium businesses.
That is the view of the head of the Delegation of the European Union, Ambassador Gerd Jarchow.
"Small and medium enterprises are the motor of the economy. They are much more determined than large companies. And they are much more innovative and dynamic they have to be since they have to compete with the big companies," the diplomat told Sunday Business as he explained how the country could become less reliant on international aid.
It is for this reason why the European Commission (EC) provides funding for the private sector development programme, which is being implemented by JAMPRO.
"Jamaica is becoming more service oriented. There are some very good companies who specialise in IT. The substance is there ... one has to use it. What we are trying with private sector development is to get the small and medium enterprises to come with some new ideas," he explained.
ACCESS TO CREDIT NEEDED
At the same time he argues that these businesses need access to credit, which Ambassador Jarchow said is difficult in Jamaica.
"If they are the motor of the economy, they need fuel and the fuel should come from the banking system and the banks do not do what they should do ... They are not willing to take risks that normally a commercial bank should take."
Expressing strong views on the topic, the ambassador noted: "In Europe, there are banks who specialise in risk capital, for people who take risks ... Here the banks, they don't take the risks. They are gaining more money with issuing government bonds ... instead of lending it out to small and medium enterprises."
He reiterated that banks should relax their collateral requirement, focusing on the business idea instead, a point raised by Prime Minister Portia Simpson Miller.
OTHER POSSIBILTIIES
Another means to becoming less dependent on foreign aid, the diplomat said, is for the country to make primary education a priority and retrain unskilled workers, especially those in the sugar industry.
"Jamaica has to look more realistically as to what [it] can do economically ... If it is not economically sustainable, financially sustainable, you shouldn't do it. You have to look for other other possibilities [and] there are other possibilities in Jamaica. In the sugar sector you have a lot of unskilled workers. Here is now the chance [where] the young sugar workers can be trained into skilled workers which is to benefit of the country."
But, for that to be successful, Jamaica "has to do much more with primary education -- I would say better teachers. Primary education is the basis. Tertiary education is essential but you have here where 60 per cent of the graduates are lost since they leave once they have the diploma."
INVOLVEMENT
In addition to the commission's aid to the sugar and banana industries to retool and modernise and to become more competitive on the global market, Ambassador Jarchow said he was proud of the EC's poverty alleviation projects in Jamaica which focus on community participation.
"We had the Negril/Ocho Rios Waste Water Management sewage project which was quite a big programme. Our first and largest programme is the water supply sanitation programme [in Whitfield Town]. It's quite a successful programme. It took a long time, because, as you know, Whitfield Town was always a very rough [place]."
These programmes are called participatory or decentralised projects because of the direct involvement of the people. "We want the people themselves, the communities organising themselves to get involved. They have the ownership of this programme. We ask for at least 25 per cent contribution from their side. This can be cash which they normally don't have or kind, such as labour. For example, in Whitfield Town they found their contractors, carpenters, plumbers [who] work for less than their normal work. This was their contribution."
Tuesday May 9 will be celebrated as Europe Day and Ambassador Jarchow, whose six-year posting comes to an end this year, expressed satisfaction with activities of the EC.
"The interest is there. You can see it by the hits to our website. I think the Caribbean looks more to North America [because of the proximity] than to Europe and I would like them to look a little bit more to Europe [because] of the historical links and also economic links the trade links because we are the biggest importers of Caribbean sugar, bananas and other products."
