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PUBLIC AFFAIRS - Buy Jamaican by all Jamaica

Published:Sunday | June 29, 2014 | 12:00 AM

Claude Clarke, Guest Columnist

Yet another Buy Jamaican campaign has been launched. The Jamaica Manufacturers' Association, left with few tools to shield Jamaica's producers from the inhospitable conditions of Jamaica's economic environment, has resorted to the oft-repeated strategy to wean Jamaicans off import dependence and lead them to consume locally produced goods.

The JMA has my sympathy and support. But I so wish that this time, the effort was more comprehensive, focused and inclusive. Winning the consumer's heart and mind for Jamaican goods is distinctly possible. But this alone will not achieve a meaningful increase in demand for locally produced goods or improve the economic fortunes of Jamaican producers.

The decision on what to buy is influenced far more by practical considerations than by emotion or patriotic sentiments, as important as these may be. Consumer choice is determined far more by price, spending power and effective product placement than it is by patriotism. So the effectiveness of any Buy Jamaican campaign depends on ensuring that these factors favour Jamaican products. Earlier efforts to woo the Jamaican consumer failed, essentially because these elements were not adequately addressed.

The value of the Jamaican consumer's support for Jamaican production cannot be overstated. Every Jamaican product sold supports a Jamaican job. Jobs give the economy vitality and the society stability. But as logical as this may be, it is unlikely to impress the single mother living on minimum wage or the family with barely enough income to satisfy its basic needs or the businessman struggling to fend off the assault of cheaper goods from abroad.

Increases the cost of living

In reality, buying a Jamaican product at a higher price or with lower value than its imported equivalent increases the cost of living, further impoverishes the consumer, and threatens social stability. For a business, buying Jamaican inputs that are more expensive or more costly to use reduces its competitiveness, reduces demand for its products, and drives people out of work.

I am personally passionate about the need for loyalty to, and support for, things Jamaican, whether goods or services. But passion has to be tempered by economic reality.

The most effective way to convince the beleaguered consumer of the national benefit of buying local is with competitive pricing of local products. That is why government policy is central to the success of any Buy Jamaican campaign. Only Government can implement the economic policies needed to improve the competitiveness of the domestic economy.

Suggestions that the 11 per cent devaluation which took place last year has improved our economic competitiveness are counterintuitive. This kind of devaluation dribble gets us nowhere. At best, it covers no more than the current differential between inflation generated by the local economy and the inflation of our trading partners.

The International Monetary Fund (IMF) found, at the start of the present extended fund facility programme, that the Jamaican dollar was overvalued by as much as 22 per cent. The economy cannot progress until this residual uncompetitiveness is removed. Thereafter, if the Government is disciplined enough to control inflation at the level of our trading partners, devaluation as a strategy to maintain competitiveness can be abandoned.

It is the competitiveness of the overall economy that ultimately determines whether Jamaican products will be able to rival imports. And it is only when Jamaican products are competitively priced that a Buy Jamaican campaign will have a chance to succeed. Those are the circumstances in which Jamaicans can be expected to commit to buying local production. They will otherwise not be able to justify a sacrifice their economic circumstances cannot support, no matter how strong the call to national service.

Nor should the call to sacrifice for the national good be directed only to the consumer. The producers must also sacrifice by doing everything to keep their prices down.

But what about others? What contribution will they make to the effort? What sacrifice will the Government, the retailers, distributors, advertisers, bankers, other service providers and media make? What will they do to drive the effort to make Jamaican products more competitive and appealing to consumers?

Government pushing up prices

Far from sacrificing anything, the Government now plans to drive up production costs by requiring producers to find the cash to pay a value-added tax before any value has been added, in order to satisfy its hunger for revenue.

The retail price of a product includes margins and service fees added at every stage of the value chain. Will any of these margins be reduced to help make the prices of Jamaican-made products more competitive?

Through good product placement and merchandising, consumers walking into stores should be met with messages that beckon them to choose Jamaican. Incorporating the Buy Jamaican slogan in all advertising from all sectors would give the concentrated focus to the effort that the lone voice of the manufacturers, who might be accused of self-interest, cannot.

Policies governing advertising can also be more supportive of Jamaican goods and not as accommodating to foreign products as they now are. It is scandalous that cable TV, which is favoured by large numbers of Jamaicans, is dominated by advertisements for foreign products, many of which compete directly with local goods. These ads are tax free and are delivered without charge to foreign producers or their local distributors. Meanwhile, Jamaican producers pay through their nose to put ads on local media.

Foreign products command pride of place in local stores and benefit from the superior merchandising aids often given to local distributors by their foreign suppliers at heavy discounts or free of cost. Jamaican producers would need massive marketing budgets, generally way beyond their reach, to produce similar materials and have them accepted in the best stores.

For a Buy Jamaican campaign to be successful, these issues must be addressed. Buying Jamaican does not only advance the interest of producers and their employees; it is as important to the country's development as the most sophisticated economic programme the IMF can design.

But it needs political leadership to achieve its objectives. It is perplexing that Government, which is responsible for promoting production, gives so little attention to policies which actually do that but instead concentrate its efforts on promoting private financial interests, which are front and centre in influencing policy.

Buy Jamaican must involve all Jamaica. It must be more than a campaign, more than a mantra; it must be a cause to which all Jamaica subscribes. It must be owned, promoted and pursued by all Jamaica.

Claude Clarke is a businessman and former minister of industry. Email feedback to columns@gleanerjm.com.

Dr Wykeham McNeill (left), minister of tourism and entertainment, playfully points an accusative finger at Roger Clarke, the agriculture minister, while JMA President Brian Pengelley joins in the mirth. The three were attending the June 11 launch of the JMA's Buy Jamaican public education campaign in Kingston. - Rudolph Brown/ Photographer