Stop throwing stones, Dr King
By Brian Pengelley, Guest Columnist
In response to Dr Damien King's article 'JMA pushing a Trojan horse' (Sunday Gleaner, August 10, 2014), the presidents (past and current), executive and directors of the Jamaica Manufacturers' Association (JMA) make absolutely no apology for how we execute our duties as representatives of the Jamaican manufacturing sector.
Mr King is a respected economist, and we are disappointed that he has not taken the time to present his views with more depth of analysis and balance. It is correct that the JMA had approached the Bank of Jamaica (BOJ) for access to foreign exchange, but it is grossly incorrect that we had requested preferential rates and false that the facility was being sought for members only.
The issue of availability of forex is a long-standing one. The recent devaluation of our currency, we believe, has given rise to heavy forex demand by not only the Government, as it seeks to comply with the terms of the IMF agreement, but also by speculators.
We have been very transparent about the reasons why manufacturers require this forex and the consequences of not being able to access those funds. The governor of the BOJ has explained the issues he faces in providing a special forex window for the sector, and we have accepted those views. That is why the JMA has partnered with a private-sector entity, Jamaica National, in developing a facility for our members that goes a long way in solving this particular issue.
The JMA holds firm in its position that taxes and charges by the Government and its agencies should not be applied to the inputs of the conversion process of transforming raw materials to finished/saleable products, but alternatively charged when they are being sold. This is a position held by most world economies.
If Mr King is suggesting that we should be an economy of importers without import substitution " because that's what we would be without policies that enable the manufacturing sector to be competitive and boost its contribution to Jamaica, we would welcome being educated by him as to how we as a country would survive with such an economy.
As suggested by Mr King, the manufacturing sector is not taking from the general society or other business, but significantly contributing to Jamaica through:
Direct revenue contribution annually to the Government of J$30 billion annually, which equates to approximately $120m every working day.
Foreign-exchange earnings of more than US$700 million annually.
Direct employment for approximately 71,000 Jamaicans and, by extension, their families.
GDP contribution of 8.4 per cent.
To improve the country's business climate, the JMA has worked closely with the Ministry of Finance through the Incentive Working Group (IWG) to develop the policies required in the Omnibus Legislation. We have been, and are, collaborating with the Private Sector Organisation of Jamaica (PSOJ), Jamaica Chamber of Commerce (JCC) and the Government in an effort to achieve lower electricity costs for all Jamaicans through the Energy Monitoring Committee (EMC) and now, the Electricity Sector Enterprise Team (ESET). The JMA has always advocated for single-digit interest rates, which would be to the benefit of all Jamaicans.
We are even more perplexed by Mr King's views on manufacturing as he sits on the board of directors and is a major shareholder of one of Jamaica's leading manufacturers. Yes, we have been very much on the front line fighting for our members and the sector, and we make no apology for that!
If Mr King were to take a more balanced view as it regards manufacturing he would acknowledge that tourism, agriculture, mining and the banking sector, to mention a few, have all been able to secure governmental support and initiatives for their sectors, which we fully support.
The relief that we get as a sector is not unique. It is given regionally and internationally.
In case Mr King and others are not aware, we also take this opportunity to make the point that the tourism, agriculture and manufacturing sectors have been working very closely at the leadership and project levels as we recognise that no one sector can alone take Jamaica out of its problems and that the strength of recovery will come from inter-sectoral linkages.
We would welcome Mr King's realistic and pragmatic economics contributions to assist us all in putting policies and ideas in place that will deliver the growth in our economy that Jamaica so desperately needs versus just standing back and throwing stones.