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Pengelley urges manufacturers to lead on regional integration

Published:Wednesday | March 12, 2014 | 12:00 AM
Brian Pengelley, president of the Jamaica Manufacturers' Association. - File

President of the Jamaica Manufacturers' Association (JMA), Brian Pengelley, says that despite efforts by Caricom to promote policy initiatives and programmes for the region's socio-economic development, regional integration efforts continue to create discord.

Addressing an award ceremony of the St Lucia Manufacturers' Association (SLMA) on Sunday, Pengelley said while there was support for regional integration, it has been marred by weak implementation of decisions, mistrust, poor leadership and institutional decline.

However, he contended that as long as regional manufacturers can overcome the shortcomings and as private sector show greater interest and participation in the process, there can be economic, political and environmental gains.

"There are some ways in which this can be done - developing two of the key growth sectors of the Caribbean, manufacturing and agriculture. This will help to reduce dependency on international forces and increase food security in the region," he said.

Pengelley suggested that a cooperative, rather than competitive dynamic within the region would, however, be necessary.

In 2012, the manufacturing sector contributed 8.6 per cent of gross domestic product (GDP) in Jamaica and 5.7 per cent in St Lucia, while the agricultural sector contributed over three per cent to GDP in St Lucia and more than six per cent in Jamaica.

The Jamaican businessman said there is a correlation between growth in the productive sector and economic growth; therefore, increasing these indicators will augur well for Caribbean economies.

Likewise, he said the creation of Caribbean linkages, through manufacturing, agriculture and tourism, is vital in strengthening regionalism.

Pengelley urged the region to prepare to take advantage of opportunities related to the expansion of the Panama Canal, as the Caribbean lies within the major shipping lanes.

"Our deep-water ports are expected to become significant trans-shipment and logistic hubs for international commerce. It is anticipated that cargoes from China, Japan and the Pacific Rim will be transported to the region and then go on to ports in North, South and Central America," he told his St Lucian colleagues.

"The Caribbean is also expected to become the gateway to Europe and Africa. Opportunities will, therefore, arise for providing technical services and undertaking light manufacturing for countries seeking to get their products to market quickly," he said.

The JMA president stressed that to grasp these opportunities the region must develop its capacity and skill set to support the enormous increase in foreign trade, which will take place on this side of the hemisphere, resulting from bigger ships passing through the Panama Canal come 2015.

He said the higher volume of trade is expected to spur economic growth in the Caribbean, which now captures a greater part of the market and become an important part of the global value chain.

Understand procedures

He said there are also opportunities to secure contracts, adding that understanding the government procurement process across borders is, therefore, paramount for regional manufacturers to supply governments, as they are one of the largest procurers of goods and services.

"Small countries often miss out on this, because they do not know how to bid, and multinationals instead get the job," said Pengelley.

"Buying inputs regionally for our manufacturing entities should also be encouraged to expand manufacturing and intra-regional trade, thereby reducing our trade deficit, given that in 2012, CARICOM imported a total value of US$29 billion from the rest of the world."

However, Pengelley said manufacturers of inputs must ensure that there is adequate supply at the highest quality and competitive prices so that they can compete within their own markets and internationally.

He advised that this is critical also as producers of finished goods, especially as the region continues to negotiate free-trade agreements, such as CARICOM/CANADA, which will open regional markets, as reciprocity is the name of the game.

- CMC