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Don Wehby | Solving Jamaica’s export challenges

Published:Sunday | January 19, 2020 | 12:57 AM
While we commend the work so far, more effort must be made through the Jamaica Customs Agency and the Port Authority of Jamaica to reduce the cost of exporting.
Jamaica currently ranks 136th out of 190 countries in trading across borders, despite a major roll-out of the Customs Agency’s ASYCUDA online facilitation portal.
Don Wehby
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The Jamaican economy has made significant strides, with many macroeconomic indicators moving in the right direction.

The export of Jamaican goods and services has long been recommended as the pillar on which the country can drive real and consistent growth while positively impacting many of Jamaica’s socio-economic challenges.

Commendations must be given to JAMPRO for the development of National Export Strategies (NES) on two previous occasions, first for the period 2010-2013 and more recently 2015-2019. The strategies developed on both occasions were detailed, comprehensive and covered all relevant areas.

The export sector requires greater priority if Jamaica is to experience significant improvements in economic performance and wealth creation.

The following are critical points towards solving Jamaica’s export challenges:

DESIGNATING A CABINET MINISTER TO DRIVE THE GROWTH OF EXPORTS

Since export growth is central to Jamaica’s economic growth, there is a need to have a minister with a focused mandate to drive growth in exports. While the responsibility can be inferred to be that of the minister with responsibility for industry and commerce, a clear mandate should be given with the required resources to support implementation.

Implementation should entail the establishment of a manufacturing and export growth team comprised of relevant government and private-sector stakeholders, with support from an established project management unit to drive implementation of recommended trade reform agendas.

REDUCTION IN ENERGY COST

Reduction in energy cost is critical to enable aggressive export growth and profits from businesses in general and more specifically the agribusiness and manufacturing sectors. There is an urgent need for the implementation of the Integrated Resource Plan (IRP) to expand the ability for independent energy providers to contribute to the national grid, thereby driving energy cost down; leading to the much-needed expansion in the manufacturing sector and ultimately global exports.

INITIATIVES TO ENHANCE TRADE MUST BE RESOURCED AND PRIORITISED

While we commend the work so far, more effort must be made through the Jamaica Customs Agency and the Port Authority of Jamaica, to reduce the cost of exporting. JAMPRO and the National Competitiveness Council (NCC) have been doing work to improve the ease of doing business in Jamaica, and this was recently reflected by Jamaica’s improved rankings in the World Bank’s Doing Business Report 2020.

That said, critical to Jamaica’s export growth is time and cost of trading across borders. It is widely agreed – and reflected in the World Bank’s Doing Business Report 2020 – that we must improve the ease of trading in the same way we are making strides in the ease of starting a business. Jamaica currently ranks 136th out of 190 countries in trading across borders, despite a major roll-out of the Customs Agency’s ASYCUDA online facilitation portal.

The myriad ministries, departments and agencies involved in the trade process have made it a challenge to achieve collaborative reform in trade facilitation. Nonetheless, major reforms in trade facilitation are required or Jamaica will continue to lag in global indices, and exporters will continue to face significant challenges exporting from Jamaica. Concerted effort is needed to improve the export process and ecosystem.

ESTABLISH A NATION BRAND TO BOOST AND PROTECT EXPORTS

Recently, there has been increased attention on finally establishing a Nation Brand to leverage and monetise Brand Jamaica’s recognition as a global cultural powerhouse. This is critical, as appreciation for Jamaican products and cuisine continues, while export opportunities are being lost due to trademark abuses in overseas markets. There is an urgent need for the accession to the Madrid Protocol which would provide trademark protection in multiple territories and stem the proliferation of non-authentic Jamaica branded products.

FINANCING FOR SMALL AND MEDIUM EXPORT ENTERPRISES MUST BE ENHANCED

For exports to grow exponentially, the National Export-Import (EXIM) Bank must be properly resourced to address small and medium export enterprises (SMEEs) issues such as trade financing and trade credit as well as receivable loans, to ease management of operational and trade expenses.

We are seeing the increase in availability of business loans to boost small to medium enterprises; recently Sagicor announced the US$100-million fund to be operated by Small Enterprise Assistance Fund, SEAF, a Washington, DC-based international investment management group.

Along with SEAF, the Development Bank of Jamaica and Sandals Resorts have contributed to the seeding of US$27 million. This was followed by the announcement from NCB Jamaica Limited on their partnership with USAID’s regional loan portfolio guarantee, totalling US$25 million.

The Government should increase their role to improve access to capital for SMEEs or provide tax credit to facilitate improvement in research and development.

A CENTRAL PROGRAMME TO BOOST EXPORT VALUE CHAINS MUST BE ESTABLISHED

Increased support must be provided to impact all stages along the export value chain, from product development to delivery into distribution networks locally (linkages) and overseas. The successful Export Max programme, implemented by JAMPRO, is a great example and definitely warrants increased governmental support. Export Max is a three-year programme geared towards providing focused capacity building, advocacy and market penetration support to exporters and export-ready firms.

ENHANCING THE EXPORT OF SERVICES IS CRITICAL TO FUTURE-PROOF THE ECONOMY

Increased focus has to be given to the services sector, as it is critical and has the potential to be a game changer for the future of Jamaica’s economy. Jamaica’s success in business process outsourcing (BPO) is well documented, nonetheless, more needs to be done to harness the current and upcoming global opportunities being driven by technology.

The announcement in January 2019 of the US$15-million loan facilitated by Inter-American Development Bank (IDB) for the implementation of the Global Services Sector Project by JAMPRO gives Jamaica the opportunity to reach global markets by leveraging technology, upskilling the local workforce and globally promoting Jamaica’s outsourcing business environment.

Similar initiatives need to be implemented to ultimately increase Jamaica’s income from export services by expanding into higher-value fields of outsourcing such as legal services, consulting, animation and software development.

These recommendations cover most of the critical areas to be addressed, so let’s begin, let’s do business.

 

Senator Don Wehby is chairman of JAMPRO and Group CEO of GraceKennedy Limited. Email feedback to columns@gleanerjm.com