Elizabeth Morgan | Is growth in production and exports being delivered?
Over the past four years, in this column, I have reviewed the productive, export sectors in Jamaica and other CARICOM countries. Last week, I looked at bauxite and alumina and, as with the other goods sectors, for the long term, especially for Jamaica, the forecast is not optimistic.
In CARICOM, there is now emphasis on agriculture to achieve 25 per cent growth by 2025 and there is also the intention to formulate a community industrial policy strategy based on Chapter 4 of the Revised Treaty of Chaguaramas dealing with Policies for Sectoral Development. Part I of Chapter 4 deals with Industrial Policy. A CARICOM Ministerial Task Force on Industrial Policy has been established and Suriname now has responsibility for industrial policy in the Prime Ministerial Quasi-Cabinet. As usual, this is a delayed attempt in CARICOM to implement Chapter 4 as part of the CARICOM Single Market and Economy (CSME).
Looking specifically at Jamaica, the Minister of Industry, Investment and Commerce, Senator Aubyn Hill, continues to talk about increasing exports. I addressed this in my article of November 2, 2022 titled ‘Growing Jamaica’s Exports: Can we now get it right’. In this article, I pointed to the many policies and other measures which have been formulated to increase production and exports over the years but not fully implemented.
Minister Hill has led trade missions to Trinidad and Tobago, Guyana, and the Dominican Republic, and he has announced a mission to Canada. I am not clear on what positive results have emerged from the trade missions already undertaken.
Jamaica’s goods export figures are not encouraging. For the period January to October 2022, Jamaica’s total imports were valued at US$6.4 billion, while earnings from exports amounted to US$1.4 billion. Jamaica’s total exports, January to December 2021, were valued at US$1.4 billion and imports at US$6 billion. So, some increase in exports will be registered in 2022, but so will a quite significant increase in imports given increases in commodity prices. Fitch, in its recent forecast on Jamaica, is showing real GDP growth slowing from 2023 and onwards reverting to the weak range of 1-2 per cent.
The question, which is raised continuously, is what is Jamaica producing for export to spur growth and increase earnings? Is enough being done to deliver growth in production and exports outside of tourism?
So, for increased investments and production, I now note that the National Investment Policy is at the White Paper stage, which means it is at the point of implementation. I thought that the National Industrial Policy was to be fully reviewed and revised. I am not seeing evidence of this. I have seen a National Five-Year Strategy to Grow the Manufacturing Sector in Jamaica dated July 2020.
TIME TO REVIEW AND MODERNISE
If CARICOM is formulating a community industrial policy, it would seem to be an opportune time for Jamaica to review and modernise its national industrial policy taking account of the green and blue economies.
The services policy, which should be a companion to this, seems to be still a work in progress. This, I would think, should be considered high priority to take account of e-commerce/digitisation which was highlighted by the WTO director general in her address to CARICOM heads in February.
Considering priorities, I looked at the Ministry of Finance’s Citizens’ Guide to the Budget. The allocation to the Ministry of National Security is about J$119 billion. We do have to consider that Jamaica is listed among the top ten countries with the world’s highest crime rates.
On the other side, allocations to ministries responsible for production and trade to spur growth and employment are as follows:
• Industry, Investment and Commerce – J$6.2 billion
• Agriculture and Fisheries – J$19.7 billion
• Economic Growth and Job Creation – J$49 billion
• Science, Energy and Technology – J$J$11.5 billion
• Tourism – J$12 billion
• Transportation and Mining – J$J$16.5 billion
• Foreign Affairs and Foreign Trade – J$5.7 billion
• Culture, Gender, Entertainment and Sports – J$5 billion
These eight production and trade-related ministries are allocated a total of about J$127 billion, just a little more than National Security. Of course, the other ministries with the highest allocations are Education, Health, and Finance combined totalling J$423 million. Production and trade, which would contribute to further boosting real GDP growth, would have benefited from a bigger allocation, in my view.
I am looking forward to hearing this year’s budget sectoral presentations to be further informed about plans to deliver production, increased exports and growth, of course in collaboration with the private sector. In recent times, we have not heard from the Ministry of Foreign Affairs and Foreign Trade, with both ministers being in the Senate.
Elizabeth Morgan is a specialist in international trade policy and international politics. Email feedback to firstname.lastname@example.org