Tue | Jun 18, 2019

Elizabeth Morgan | Role of the Jamaica/Caribbean private sector in international trade

Published:Wednesday | February 6, 2019 | 7:03 AM
Mia Mottley, Prime Minister of Barbados.

The private sector is supposed to be the engine of economic growth in most countries and is supposed to play a key role in the export of goods and services, especially in small, open developing economies such as Jamaica, and partners in the Caribbean Community (CARICOM). As is often said, it is the private sector which trades. Government involvement as a trader is now quite limited.

A vibrant private sector is critical to advancing Jamaica’s and CARICOM’s participation in international trade, particularly in expanding exports.

The role of Government is to provide the private sector with the enabling environment and institutions. Government is responsible for making policy, adopting legislation and regulations, negotiating trade agreements, and settling trade disputes, among other things. The private sector must be involved in this work as a key stakeholder.

WHAT IS THE PRIVATE SECTOR?

The private sector is described as comprising individual farmers, street traders, locally owned firms, and regional and international companies. Research shows that in developing countries, such as Jamaica/CARICOM, much of the private sector is informal. Here in Jamaica, when we think of the private sector, we do not include small farmers and street traders. Yet, over the years, small farmers have played an important role in the export of agricultural produce, and informal commercial traders have been active in both exports and imports. In fact, history shows that some small farmers and street traders evolved into major companies.

WHICH ARE THE JAMAICAN PRIVATE SECTOR ORGANISATIONS?

The two oldest private-sector organisations in Jamaica are the Jamaica Chamber of Commerce (JCC), founded in 1779, and the Jamaica Agricultural Society in 1895.

The Jamaica Manufacturers’ Association was founded in 1947 and the Jamaica Exporters’ Association in 1966. Both merged in 2018 to form the Jamaica Manufacturers and Exporters’ Association. This combination may give the false impression that exports only include manufactured goods and not fresh agricultural produce and services.

The Private Sector Organisation of Jamaica was established in 1976, and states that it is a national organisation of private-sector associations, companies and individuals working together to promote a competitive and productive private sector and seeking to influence national policy issues.

Representing micro, small and medium enterprises are the Small Businesses Association of Jamaica, established in 1974, and the Micro, Small and Medium-sized Enterprises (MSME) Alliance, emerging in 2007.

There are also informal commercial traders represented by the Jamaica Higglers, Vendors and Marketers Association.

In the services sector, the Jamaica Hotel and Tourist Association (JHTA) was founded in 1961 to promote the development of the tourist industry and represent the interests of hotels and other guest accommodation in Jamaica, as well as suppliers to the industry. There are also the various professional associations, for example, bankers, architects, engineers, doctors, lawyers, nurses, among others.

To implement the CARICOM services regime, each member of the CARICOM Single Market and Economy (CSME) is required to establish a Coalition of Service Industries as an umbrella organisation for local service providers. The Jamaica Coalition of Service Industries (JCSI) was established in 2011, housed at JAMPRO. It is now at the JCC.

There is also the American Chamber of Commerce of Jamaica (AMCHAM) formed in 1986 by business persons from Jamaica and the United States of America to promote investment and trade between the USA and Jamaica. AMCHAM also has offices in Barbados and Trinidad and Tobago.

WHICH ARE THE REGIONAL PRIVATE-SECTOR ORGANISATIONS?

Each CARICOM member state has its own national private-sector organisations. The regional umbrella organisation is supposed to be the Caribbean Association of Industry and Commerce (CAIC). CAIC emerged in 1970 out of the West Indies Incorporated Chamber of Commerce, which was instrumental in establishing the Caribbean Free Trade Association (CARIFTA) from which CARICOM emerged in 1973.

The Jamaican private sector, through the JMA, was actively engaged in the CAIC. This association was restructured in 2012 and now represents interested private-sector organisations in the region. It does not appear that any Jamaican private-sector organisation is currently a member.

At the level of the Caribbean ACP Forum (CARIFORUM), through Caribbean Export, the establishment of a Caribbean Business Council (CBC) was proposed. Former prime minister of Barbados, Owen Arthur, had stated that this council would be launched in 2006 and should be an associate member of CARICOM. Subsequently, it was to be established by June 2018, following an announcement from a meeting of nearly 40 regional private-sector bodies in Jamaica in December 2017. Citing this meeting, David Jessop wrote in The Sunday Gleaner of December 17, 2017 about “the critical importance of a new private sector organisation” to the Caribbean. There is no indication that the CBC has been established as yet.

On the services side, the Caribbean Tourism Organization, established in 1989, represents the interests of the industry across the region, including Jamaica. A Caribbean Network of Service Coalitions was established, which also operates out of Barbados. Its level of activity is not clear.

The CSME and the CARIFORUM-EU Economic Partnership Agreement (EPA) require the active participation of the regional private sector. The CARICOM Council for Trade and Economic Development has been endeavouring to re-engage the regional private sector in its work.

At the CARICOM Heads of Government meeting held in Port-of-Spain in December 2018, Barbados Prime Minister Mia Mottley urged CARICOM to find a common vision for the private sectors in member states with a view to maximising CSME benefits. She further told the 14th regional Investments and Capital Markets Conference at The Jamaica Pegasus hotel on January 23, 2019 that the private sector, as well as labour unions, must be engaged and become associate members involved in the CSME. In this case, the regional private sector needs a fully operational representative body.

ROLE OF THE PRIVATE SECTOR AT THE DOMESTIC AND REGIONAL LEVELS

To spur growth and expand exports, the private sector has to be a partner with government in international trade operating at the domestic, regional and international levels. The sector must be an advocate and be engaged in consultations and representation.

To be a real player in the effort to achieve sustained growth and development, the sector has to be export-oriented and willing to take risk. In this role, it has to be well organised and knowledgeable about trade and trade policy issues. For the latter, it has to invest in capacity-building.

In the case of Jamaica, in my opinion, for a small country, there are too many private-sector organisations, which means that limited resources are not being put to their optimal use to enable the sector to be an effective player at all levels. The number of private-sector bodies makes coordination critical at the national level. It is also necessary to address the engagement of the informal sector.

At the regional level, the CAIC and the Caribbean Network of Services Coalitions have to become more effective organisations, representing the entire regional private sector. The CAIC cannot be a credible regional body without the involvement of the Jamaican private sector. All the members of the CAIC must also pay their way. An organisation cannot function without resources. If a CBC is to be established, then the sector must move beyond talk to implementation. It has been 13 years since its launch was first announced.

Prime Minister Mottley and her fellow CARICOM prime ministers and trade ministers have to actively encourage private-public sector dialogue at the national and regional levels.

In addition, the private-sector organisations need to do more to position themselves to become effective partners, with government contributing to shaping the national and regional trade agendas and to achieving sustained growth and development.

Elizabeth Morgan is a specialist in international trade policy and international politics. Email feedback to columns@gleanerjm.com .