KARL SAMUDA, Opposition Spokesman on Industry and Commerce, lambasted the Government's handling of the manufacturing industry while speaking to members of the Jamaica Manufacturers' Association (JMA) on November 19 at their Duke Street headquarters. "A devastated sector" is how Samuda described the manufacturing sector of Jamaica.
And without immediate intervention by the Government, these same industries will "wither on the vine." During his presentation, Samuda discussed what went wrong with the Government's handling of the productive sector and criticised the now over-dependence on the services sector. He then outlined what can be done to revive the manufacturing and agricultural sectors.
Harking back to the past, Samuda stated that, "At its peak, the garment sector employed 83,000 workers, mostly women who were the breadwinners of their families. Garment manufacturing was a US$500 million export sector that now in 2003 employs 5,000 workers and earns US$3 million." And according to Samuda, this steep decline occurred because Jamaica has Liberalised on an accelerated basis over the past 8 years.
"We (the JLP) contend that the process has been too fast." Now, Samuda did admit that there were outside forces not acting in Jamaica's favour. "Rich countries protect their local producers through subsidies and non-tariff barriers while demanding an open door policy for others. The developed countries (group of 8) control 48 per cent of the world economy and 49 per cent of global trade. Coupled with the influence of what some call the unholy trinity of globalisation: the IMF, World Bank and World Trade Organisation, developing countries have to be very vigilant in their resistance of attempts by these forces to link liberalisation to loans and aid."
PRODUCTIVE SECTOR
However, Samuda lamented the Government's apparent attempt to use the services sector to make up for what the productive sector has lost in terms of jobs and contribution to the country's growth. Based on Samuda's calculations, without remittances and tourism, the country has a trade deficit of US$332 million. "We are living off the goodwill of Jamaicans and of others abroad.
"The argument that the services sector compensates for the continuous loss of exports from the manufacturing sector is false." Based on the numbers provided by the World Economic Forum, Samuda outlined where Jamaica falls short and why manufacturers are facing a daunting challenge."
COMPETITIVENESS
Out of 80 countries, Jamaica ranked 60th while Trinidad and Tobago ranked 37th. In 2001 Jamaica was ranked at the 51st place. Macroeconomic Stability Jamaica ranked 64th while Trinidad & Tobago 29th.
CREDIT RATING
Jamaica ranked 70th compared to Trinidad & Tobago's ranking of 39.
Samuda also made mention of the World Bank Policy Research Department Working Papers that revealed, "only Haiti ranked worst than Jamaica in the following areas:
Graft
Rule of Law
Government Effectiveness
Political Instability and Violence
In terms of the way forward, Samuda gave the following recommendations.
1. Examine all possible ways to reduce interest rates to single digits
2. Implement a national policy requiring the government to purchase Jamaica made goods
3. Remove all taxes from the craft industry
4. Bring in skilled craft people from the Far East or Africa to teach our local craftspeople to become more sophisticated in their art so as to make Jamaica a craft destination.
5. Implement a National Productivity Incentive Scheme
6. Facilitate the establishment of Marine Transport to move goods by sea rather than allowing our roads and bridges to be destroyed at a great cost because of the necessity to use heavy road transports
7. Remove all taxes on the introduction of new technology, including special concession to personnel teaching the new technology
8. Tax incentives to Venture Capital firms
9. Support the principle of refinancing through the use of interest capitalisation and consolidations and try to influence its introduction to the Financial Community.
10. Offer unused factory space rent-free to genuine manufacturers.
11. Offset electricity costs for manufacturers.
- D.W.
