Huge trade deficit

Published: Monday | December 17, 2012 Comments 0
Budhan
Budhan
Kennedy
Kennedy

JCC alarmed by low exports

Gov't says lack of funds stalling strategy

Livern Barrett, Gleaner Writer

ONE OF the country's most powerful private sector bodies, the Jamaica Chamber of Commerce (JCC), has criticised the country for not acting on a national export strategy that was proposed four years ago.

The criticism, made by JCC President Francis Kennedy, comes in the wake of data provided by the website diGJamaica.com, which show that the country's trade deficit widened significantly over the first eight months of the year.

Kennedy said this is a clear indication that measures have to be quickly put in place to drive exports of Jamaican goods and services.

"The Government has been sitting on it (the proposed export strategy) for the last three or four years," the JCC president told The Gleaner yesterday.

The proposed strategy was designed to be a public-private sector partnership that would help to advance the productivity and competitive-ness of firms and industries while enhancing the business and trade environment and improving Jamaica's export performance.

The rationale was to help reduce the country's balance-of-trade deficit, increase job creation, and reduce debt.

But permanent secretary in the Ministry of Industry, Investment and Commerce, Reginald Budhan, explained that the proposal presented several challenges.

According to Budhan, some of the challenges were not only about enacting new legislation, but required Government intervention, which has "budgetary implications".

"There is a limit as to what we can do, so the implementation date has to be moderated," he reasoned.

"Remember, this is a government document, so there is no motive not to do it, except that there are constraints, and those constraints have to do with resources," he explained.

The permanent secretary said an implementation plan had been worked out between the country's trade promotion agency Jampro and the Jamaica Exporters' Association.

Data gathered through the website diGJamaica.com have shown that the total value of Jamaican exports over the first eight months of the year was significantly less than the value of imported petroleum products alone.

The data revealed that total exports between January and August were valued at US$1.1 billion, or J$97 billion, while the value of all imported petroleum products was US$1.6 billion, or J$142 billion.

"This represents a US$500 million, or J$45 billion, trade deficit on petroleum products alone," the website pointed out.

"Put another way: the trade deficit on petroleum products alone would purchase 4.5 billion $10-Cash Pot bets," it reasoned.

can't cover import bill

According to diGJamaica.com, total imports, including petroleum products, were valued at US$4.3 billion, or J$382 billion, putting the total deficit for the eight-month period at US$3.2 billion, or in excess of J$284 billion.

"Put more simply: for every J$1,000 in exports we earn, Jamaica has to find J$3,900 to cover its import bill," the website revealed.

"After we have collected our export revenue, Jamaica must find almost J$105,000 for each man, woman, and child on the island to pay for all the imports Jamaica has made this calendar year up to August," it added.

Kennedy said the JCC has been alarmed about the growing deficit "for a long time".

"We've been shouting and shouting, but nobody is listening. Now they are listening when we are having difficulty paying our foreign-exchange bills," he said.

But while agreeing that the figures are alarming, Budhan said they were not surprising to people who had been tracking the numbers and who understood the reasons behind them.

The export strategy is built on the pillars of agro-processing, aquaculture, coffee, education, and entertainment exports.







PLEASE SEE deficit, A3

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