Letter of the Day | Jamaica must build new engines of growth

THE EDITOR, Madam:

The recent report that IBEX reduced its Jamaican workstations while expanding operations in the Philippines should cause us to examine the changing global BPO landscape and, more importantly, Jamaica’s economic strategy.

BPO has contributed significantly to employment and foreign-exchange earnings, and Jamaica should continue pursuing higher-value areas such as technology, finance, analytics, and knowledge-process outsourcing. However, increasing automation, artificial intelligence and competition from lower-cost jurisdictions demonstrate why we cannot rely too heavily on this sector.

Agro-processing should become one of Jamaica’s next major growth areas. We produce a range of agricultural products, yet we lose too much potential value when goods are sold with little or no processing. Government and the private sector should facilitate investment in modern processing facilities, cold storage, packaging, food certification and export infrastructure. Small farmers should also be linked through co-operatives and supply agreements with processors, allowing them to produce consistently for commercial markets. Instead of primarily selling raw produce, Jamaica should be exporting more sauces, juices, seasonings, concentrates, packaged foods, nutraceuticals and other value-added products.

There is also an opportunity to reduce our food import bill by identifying processed foods that can competitively be produced locally. This would create stronger linkages among agriculture, manufacturing, tourism and exports.

At the same time, Jamaica should aggressively pursue its long-discussed ambition of becoming a regional logistics hub. Our geographic position and existing port infrastructure provide a foundation, but location alone will not create an industry. We need efficient ports and customs processes, expanded warehousing and cold-chain capacity, competitive energy costs, reliable transportation infrastructure and appropriately trained workers.

The objective should be to attract companies that use Jamaica not simply as a trans-shipment point, but as a base for distribution, assembly, packaging, processing and re-export throughout the Caribbean and the Americas. Special economic zones can play an important role in attracting these investments if supported by efficient regulation and infrastructure.

Most importantly, these sectors should not be developed independently. Imagine Jamaican agricultural products being processed and packaged locally, moved through Jamaican logistics centres and exported through our ports to international markets. That is how we retain more value within our economy.

The lesson from the changing BPO landscape is not that Jamaica should abandon BPO. It is that we must diversify before circumstances force us to do so. Jamaica’s next economic transformation should be built not only on providing services to the world, but increasingly on producing, processing and moving goods of value to the world.

Dane Smith, MBA

danemfs@gmail.com