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EDITORIAL - Sugar boosts economy

Published:Saturday | October 4, 2014 | 12:00 AM

Encouraging data has been released by the Statistical Institute of Jamaica (STATIN) pointing to a 4% growth in manufacturing in the second quarter of 2014.

This growth is enough to create a genuinely positive outlook for the economy as a whole. STATIN says the economy grew by 1.8% in the second quarter of 2014 compared to last year.

The good news from STATIN is, of course, in contrast to its earlier estimates that the manufacturing sector had declined by 1%, and it will go a long way in changing the perception of a sector in flux.

It's also the kind of news that people want to hear at a time when so much doom and gloom is being predicted and in the middle of the debilitating chik-V outbreak and the deadly Ebola looming over the world.

The uptick in performance is attributed to strong growth in sugar production, with output being twice as good as last year's and a 26% growth in petroleum refining.

The news about sugar's positive performance comes hard on the heels of privatisation, which took sugar off Government's hands and placed it into those of the private sector. There are some lessons in this for the State, the main one being that the private sector is able to manage production more efficiently and more effectively than any government ever will.


Maybe this positive outcome for sugar will hasten the Government's footsteps in ridding itself of other public entities the private sector ought to be running. For example, the pace needs to quicken in relation to the divestment of Caymanas Park, Kingston Wharves, and the Norman Manley International Airport.

For ages, Jamaica's identity was tied to the things it produced: sugar, bananas, rum, bauxite/alumina and agro-processing. But as times changed and focus shifted, manufacturing no longer dominated the economy and we witnessed the rise of strong service industries such as tourism, telecoms and banking.

Despite the healthy status of the manufacturing sector, there are indications that many small and medium-size businesses are in trouble and remain uncompetitive. They have become mired in debt, unable to pay utility bills, and must dig deep to respond to security threats by installing expensive equipment or transport workers - all adding to their production costs.

The average man in the street who is struggling to look after his family may not feel the positive wind that is blowing, especially if he is out of a job. April's figures provided by STATIN pointed to a decrease of 11, 300 jobs. This is worrisome.

For economic recovery to be achieved and be sustained, it must provide jobs. There has to be a genuine effort to invest in new and creative sectors such as renewable energy, to create new jobs and help manufacturers become more efficient.

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