Trevor Hamilton and Byron Blake | Jamaica’s readiness for economic sovereignty

The global economy has rotated 360 degrees in the last 100 years. Soon, economic winners will be countries with nuclear or military power or with economic sovereignty.

While small countries cannot aspire to be military or nuclear powers, countries like Costa Rica, Switzerland, and Malaysia have demonstrated that significant economic sovereignty can be achieved by strategically building and leveraging certain innate assets, such as broad-based and continuous education, net migration, high rates of savings, and an entrepreneurial culture.

Jamaica pursued, since its independence, a strategy of neutrality toward its superpower partners. But, apart from the short-lived heyday of commodities like sugar and bauxite in the 1970s, it has had no leverage. It has been vulnerable to blackmail and sanctions by those powers and the multilateral institutions they control. Jamaica must now ask itself some uncomfortable questions as it seeks to plot a development path in an era of open superpower rivalry. We identify a few:

• Can it pursue a national sovereign development strategy as a small island state?

• Can it pursue a national sovereign development strategy based on relations with a single hegemonic superpower, namely the US?

• If the answer to the second Question is ‘ yes’, Jamaica must then ask some ‘what if’ questions, including: ‘What if’ the United States:

i. imposes a US$300 tax on airline tickets or US$50 on all cruise ship passengers to Jamaica, or a tax on ships and cargo bound for Jamaican ports, or a 15 per cent tax on diaspora remittances to Jamaica?

ii. Votes in the IMF, World Bank, or IDB boards, against loans to Jamaica?

iii. imposes a 15 per cent tax on US employers with BPO contracts in Jamaica?

iv. requires Jamaican entertainers to post a US$20,000 surety for work permit visas?

v. imposes a 100 per cent tariff on Jamaican rum, yams, Easter bun, and spices?

vi. imposes a 15 per cent charge on funds raised in the US by US-based charity organisations for their operations in Jamaica?

vii. deports 500 undocumented Jamaicans every two months, and or demands that Jamaica take 500 deportees from countries unknown?

viii. bans the export of hatching eggs, medicines, including vaccines, and feeds to the poultry industry in Jamaica?

ix. insists that Jamaica limit the contribution of renewable energy to 30 per cent of its energy demand.

These questions indicate the precariousness of any such strategy. They suggest that Jamaica begin to engineer, however quietly, an economic architecture towards greater economic sovereignty. This is possible, but requires proactive strategic thinking and action, not silent, below-the-radar acquiescence.

There are 16 pillars on which Jamaica can build a more sovereign economic structure.

Jamaica has a basis for advancing all 16 areas. But our analysis reveals a very low state of readiness. There is much work to be done, but with careful thinking and imagination, it can be done. Four are highlighted below:

CAPITAL EXPENDITURE IN HIGHWAY INFRASTRUCTURE

There has been significant investment in the (i) East/West Highway; (ii) the North/South Highway; and (iii) the near-complete South Coast Highway. All three are highways from ‘Nowhere’ to ‘Nowhere’ and support no strategic development. They raise the value and attractiveness of otherwise productive land to real estate developers. All end within 10 kilometres of the Port of Kingston, the proclaimed ‘Transshipment Hub’ of the Caribbean. It requires little imagination and even less Capital to bring those highways into the Kingston ‘Transshipment Hub,’ and the global supply chain.

- Transportation cost (financial and time) is an important consideration in the decision to locate businesses. Taking the highways directly into the transshipment hub will increase the attractiveness of projects along those highways. For example, (a) the large and underutilised Denbigh Agri-Business Facility, and the neighbouring Bogles Facility, located along the East/West highway, could become highly attractive to investors interested in producing, processing, and exporting agricultural and agri-based products. (b) Similarly, the facilities at the Urban Development Centre in Morant Bay could be marketed to companies interested in high-value exports instead of to low-value-chain local tenants struggling to pay economic rents.

There would be a tendency for industrial clusters to develop lead to additional investments and more sustained development.

BROADENING ECONOMIC SPACE

Jamaica has been a member of the underexploited 52-year-old Caribbean Economic Community, and the 50-year-old African, Caribbean and Pacific Group (ACP). The latter has only been operationalised in their relations with Metropole Europe. Jamaica, with lead responsibility for CARICOM’s external economic negotiations, can (i) intensify its economic interactions in CARICOM, and (ii) lead the operationalisation of the ‘A’ in the ACP. The private sector will have to be encouraged to reorient its investment and marketing approaches.

MONETISING ‘BRAND JAMAICA’

The Brand Jamaica has been well known through (i) sports, in particular athletics, (ii) culture, in particular music, (iii) certain indigenous products, for example, Blue Mountain Coffee, fine-flavoured cocoa, and all-spice (pimento), and (iv) beaches.

These attributes have been exploited by others, with Jamaica and Jamaicans, including the actual creators/deliverers of the product, mainly observers.

Jamaica must now create the institutional, educational, and organizational arrangements to be the primary deliverers of the branded products. There will be challenges because cooperating and collaborating are not our natural state, but they are essential to optimizing the value in Brand Jamaica.

Jamaica is in the Caribbean, which has been recognised as a ‘Zone of Peace.’ Further, Jamaica’s internal investment in security has begun to yield measurable results in the reduction of major crimes. These should not only be continued but also be promoted to potential investors in their decision-making.

Trevor Hamilton, PhD is an international business consultant; Ambassador Byron Blake, is former assistant secretary general of CARICOM. Send feedback to columns@gleanerjm.com