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Jamaica logistics rank said hurt by slow infrastructure projects

Published:Wednesday | July 13, 2016 | 7:00 AMSteven Jackson
The Port of Kingston. It's divestment is viewed as a plus for logistics.

The worsening of Jamaica's rank, down by 49 spots in this year's world logistics index, related to its relatively low and slow infrastructure development, according to the authors of the World Bank report.

As reported last week, Jamaica dropped from 70 in 2014 to 119 among 160 nations in the 2016 report. It gave no explanation of the decline, but speaking with Wednesday Business, the report's authors provided a deeper analysis.

"Of the six components measured, Jamaica scored lowest on trade-related infrastructure and on quality/competence of logistics services," they said via email.

The Logistics Performance Index (LPI) scores countries on six different components:

customs and border management; trade-related infrastructure; the availability of competitively priced international shipments; quality and competence of logistics services; the ability to track and trace; and the timeliness of shipments.

"Between 2014 and 2016, Jamaica scored lower in three of the six components: trade-related infrastructure (2.84 to 2.23), quality/competence of logistics services (2.72 to 2.31) and timeliness of shipments (3.14 to 2.64). In addition to lower scores in these areas, the rise of other countries in its range impacted Jamaica's ranking," stated the authors whose responses were facilitated by the World Bank team in Jamaica.

The report, titled 'Connecting to Compete 2016: Trade Logistics in the Global Economy', was authored by Jean-Francois Arvis, World Bank; Daniel Saslavsky, The World Bank; Christina Busch, The World Bank; Anasuya Raj, The World Bank; LauriOjala, Turku School of Economics; Tapio Naula, Turku School of Economics; and Ben Shepherd, Developing Trade Consultants.

The authors added that the smallest changes in scores could significantly affect country rankings.

"For example, a country's score may change only slightly, but if several other countries improve faster, they push the country with a slight score change down on the list. This is what happened in the case of Jamaica. To illustrate: in the 2016 LPI edition, there are 29 countries within a -0.1 to +0.1 score range of Jamaica."

The World Bank Group explained that it was working closely with the Government of Jamaica through multiple instruments, including the US$50 million Foundations for Competitiveness and Growth Project to enhance competition in the business environment and address business regulation and procedural issues that constrain trade and logistics.

"This project also supports strategic trade-related infrastructure investments such as economic zones that will be critical to attract investors to Jamaica and to help develop the country's Logistics Hub Initiative (LHI). Additionally, through the Public Sector Transformation Project the Bank Group is also supporting Jamaica's front line agencies involved in trade and logistics," said the World Bank about the project previously disclosed by The Gleaner.

The logistics report authors view the recent signing of the Kingston Freeport Terminal Limited concession for Kingston Container Terminal as a testament to Jamaica's commitment to establishing itself as a global logistics hub.

"Currently, a Logistics Hub Master Plan and Industry Analysis is under way to analyse trends in international trade and foreign direct investment in Jamaica, determine market demand for logistics services, and identify the sectors with the most potential for the LHI. Under this study, the Government of Jamaica receives monthly updates which are actionable in real time. When completed in mid-2017, the study will serve as a definitive road map for Government agencies charged with development of the LHI," stated the authors.

Jamaica's logistics hub is meant to capitalise on its position along busy trade routes between the expanded Panama Canal and the eastern coast of the United States, and become a gateway to South America, Africa and Europe.

steven.jackson@gleanerjm.com