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What exactly are our priorities?

Published:Thursday | June 19, 2014 | 12:00 AM


China's emergence as an economic and geopolitical power has changed the global as well as regional balance of power and her declared goal of reviving the old Silk Route and its desire to establish connectivity and trade with its western neighbours. The movement of goods along the maritime Silk Route has a history of over 2,000 years, reaching its pinnacle in the 15th century when the legendary explorer Zheng He led an armada of more than 300 ships and 27,000 sailors in voyages from China through Southeast and South Asia to the Persian Gulf. Today, these same corridors play a vital role in supporting East Asia's unique production-sharing network, which brings components produced throughout the region to China for assembly and then onwards to final destinations in Europe and North America.

A sharp decline in transport costs along the contemporary maritime Silk Route allowed all countries in the region, regardless of their size and technological sophistication, to benefit from specialisation and economies of scale by producing components rather than complete products. This is the major reason why East Asia has performed so well relative to the rest of the world. With rising labour costs in China, many ASEAN economies (Brunel, Burma, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam) now stand to gain from future outsourcing of production. Some predict that, within a decade, as much as 100 billion dollars will be leaving China annually in the form of direct investment.

The proposed Silk Route reminded me of Jamaica's proposed global logistics hub, which will require the development of port infrastructure capable of supporting post Panamax vessels, as well as the creation of enterprise zones and logistics facilities. Such a hub will integrate manufacturers and distributors based in Jamaica into the global production and distribution chains. This potentially represents US$9 billion of foreign direct investment, with the prospect of creating tens of thousands of jobs in various sectors, including construction and operational phases.

Logistics hub

This will be a catalyst for major manufacturing and distribution companies establishing offices and warehousing facilities as well as a plethora of companies transacting trade-related deals globally for goods and services that are either manufactured, warehoused or assembled in Jamaica or elsewhere, transiting through Jamaican ports and a multimodal transport system. An effectively integrated multimodal transportation system - land, sea, and air, is a competitive gateway for Jamaica as it facilitates the movement of goods and people.


Other countries, including Brazil, the Dominican Republic, The Bahamas, Trinidad and Tobago and Cuba, are moving full speed ahead to implement smaller plans to take advantage of the Post Panamax Era. Miami and a number of other ports on the US Eastern seaboard are rapidly expanding to take advantage of the expansion of the canal and the US$40-billion Interoceanic canal proposed by the Chinese in Nicaragua. While the rest of the world is preparing its citizens, the Government in Jamaica is doing what it does best ... "working working working, some ministers even twerking"!

I had the privilege of listening to ASEAN ministers between June 9-13, 2014, while attending a seminar on 'Financial Openings in the Caribbean and Latin America' in Shanghai, discussing the mutual benefits for their citizens and Chinese nationals which will flow from the infrastructure construction and its multiplier effect along the route; while in Jamaica, the debate rages on about the proposed trans-shipment port on the Goat Islands and the ratio of Chinese workers. Indeed one has to wonder what exactly are our priorities as we struggle to rebuild our economy. While the environmental concerns are real and genuine, one has to balance those concerns against the country's chronic unemployment and its multiplier effect on the society.

Questions for the gov't

How far along are we with the dredging of the Kingston Harbour, the expansion and privatisation of the Kingston Container Terminal and the Norman Manley International Airport, and the construction of the Caymanas Special Economic Zone (CEZ), dry dock in Jackson Bay, Clarendon, bulk shipment port at Cow Bay, St Thomas, and the Vernamfield air cargo and aviation training centre? Have investors been identified for the various projects, have the terms of the private-public partnership been drafted, and what of the procurement and tender procedure for these mega projects?

Andrew King