Phillip Paulwell
By Al Edwards, Acting Financial Editor
THE LINCHPIN of the Government's growth strategy continues to be placed on Information Technology (IT) producing some 40,000 jobs over three years. The youthful and energetic Minister for Industry, Commerce and Technology Phillip Paulwell has made it his personal goal to propel information technology into the forefront of the productive sector and his efforts in getting that message across has been impressive. However with last week's Budget announcement that his portfolio's allocation of funds (coming from approximately $5 billion promised over 3 years in the last budget to just $2.1 billion) will be drastically reduced, the fast moving IT train looks for all intent and purposes to be derailed. A number of circumstances have served to conspire against Minister Paulwell which now sees his IT dream strangled in the country's debt trap.
With the Ministry of Industry Commerce and Technology already spending $1.2 billion on research and development during the last fiscal year, the Government has now axed its 2000/01 provision for I.T. by half.
Of the $5 billion promised over a three year period, with only a year to go, the total allocation now stands at $1.8 billion with only $657 million allocated for this fiscal year despite the fact that the Government said that funding would come from the sale of cellular licences to Digicel and Centennial for approximately US$100 million.
Capital spending has fallen from $2.1 billion last year to only $720 million this year which will surely hinder the pace of development of what is a comparatively new industry in Jamaica.
SIGNS
With $1.2 billion already spent, there seems little to show for such expenditure so far with no visible signs of incremental growth. To date there are no citadels to technology teaming with young humanity pounding computer keyboards.
In fact there seems to be much anticipation and very little action. Construction has taken place in the Free Zones but the buildings have yet to be occupied by the country's first generation of I.T. employees. Some 9,000 square metres of space is still available in The Kingston Free Zone for I.T. operations . Montego Bay's client services manager Jacqueline Daley said that the Kingston Free Zone had about 18,181 square metre of space and all but about half has been leased. She added that a client was prepared to occupy 4,545 square metres of space at the Portmore Informatics Park in St. Catherine.
"In the Montego Bay Free Zone a building was completed at the end of last year and three companies have committed to occupy that space, which should take place in June of this year," said Mrs. Daley.
She observed that since the Government started marketing the Free Zones as a base for I.T. services, about 9,000 square metres of office space had been built in Montego Bay and rented to companies in the industry. She noted that a number of companies that have space in Montego Bay were expanding their business to Portmore and the Kingston Free Zone.
This is all well and good but many of these call centres have yet to begin operations. Nevertheless Indusa Global, the software company that set up the Caribbean Institute of Technology (CIT) in Montego Bay with the help of the Government two years ago has called for the public to be patient.
"It can't happen overnight. The type of jobs we are providing requires ongoing training," said James Ram, an executive at Indusa which has provided programming jobs for about 60 of the 81 young people who have been through the CIT's 10 month training course.
The nascent I.T. sector in Jamaica has become synonymous with "call centres"- buildings that house cheap labour who service a twenty four hour operation manning telephones. Mr. Paulwell has to guard against this because a future at a call centre does not provide a sustainable career for young people. Already Sitel Caribbean an I.T. company based in Montego Bay is blaming a factory stigma attached to the Free Zone areas as the main reason why only a handful of school leavers have responded to its advertisements offering them employment.
APPLICATIONS
Sitel Caribbean invited school leavers to submit applications for employment through newspaper advertisements. The youths are to be employed in customer relations working via telephone and e-mail.
Responding to the lack of interest the company's chief executive officer Patrick Caserley said: "Some people think that if they are going into the Free Zone they will be walking into a factory. They feel that if you don't want to work in a factory then don't apply for work in the Free Zone."
NETSERV, one of the three information technology firms invited to set up call centres in Jamaica as part of Paulwell's vision of 40,000 I.T. jobs over three years, plans to pay around $10,000 per month plus an unspecified bonus depending on contracts won.
An annual $120,000 salary appears likely for several NETSERV workers employed to handle calls at its soon to be established call centre in the Mutual Life Centre in Kingston. The company said it wants to place 10,000 employees in five call centre locations in Jamaica.
But while the country rushes to embrace the new industry the rest of the world is recoiling in shock as tech stocks plummet dramatically and many of the leading firms, Cisco, Hewlett Packard, IBM, Ericsson, British Telecom, Cable & Wireless AT&T, lay off workers in droves.
A viable I.T. industry is largely dependent upon a work force with a high literacy rate who are au fait with the requisite skills required. An I.T. industry in Jamaica can only survive if there is set in place an emphasis on education. An examination of countries where a vibrant information technology industry exist such as Ireland, India, the United States will reveal a high literacy rate and vast pools of skilled labour.
DISBURSEMENTS
It now transpires that only four of the nine IT projects approved for Government financing have received disbursements, Minister of Industry, Commerce and Technology, Philip Paulwell confirmed earlier this week.
Mr. Paulwell informed the House of Representatives that only $339 million including the $64 million for Jamaica Call Centre Limited (JCCL), of the approximately $999 million committed to nine projects approved for Government financing had been disbursed.
Disbursements were made as follows: JCCL- $64 million; NETSERV-$109.2 million; Baytel-$31 million and Teleservices-$135 million.
Mr. Paulwell finds himself further embroiled in controversy with no headway made with his $5 billion Venutre Capital Fund, with Trafalgar Development Bank (TDB) expected to administer the Fund. It now transpires that a $64 million dollar loan made to JCCL has not been repaid with the cheque lodged with the National Investment Bank of Jamaica (NIBJ) uncashed.
There is rampant speculation that there are not sufficient funds to cover the cheque and hence the prolong delay in accessing the money.
