By Balford Henry, News EditorTHE JAMAICA Employers' Federation (JEF) says 92 per cent of managers contacted in a survey to identify factors affecting employment and investment in Jamaica, identified crime as the main culprit.
"The main culprit charged with hijacking successful and profitable businesses in Jamaica was crime; 92 per cent of managers identify this as being a major problem and that no effort should be spared in bringing it under control," JEF said in making the results of its survey public yesterday.
The JEF, a trade union representing employers, recently completed its survey on employment creation. The report has been presented to several interest groups, including the National Planning Council and the Ministry of Development. The study examined factors affecting investment and employment in Jamaica and identified job creation policies suitable for this economy. Also, it looked at the extent to which internal investment can be enhanced and be a source of employment and economic growth and development.
"The study was done in response to the growing incidence of unemployment, particularly among young people (49.4 per cent for age group 14-19), and the devastating consequences it has for our economy and by extension our society," the report said.
"We identified the major challenges and the most desired incentives. When asked 'What are the major challenges facing your operations?', the more conspicuous responses were crime, 'red tape', wage increases, demands, workers attitude towards work and the level of education and skill of workers.
"Just as significant were macroeconomic factors such as exchange rate fluctuation (identified by 52 per cent of respondents). Other significant factors were inflation (48 per cent), interest rates (40 per cent) and imports (28 per cent). Other factors identified were taxes, fees and charges each registering 18.5 per cent.
"The main culprit charged with hijacking successful and profitable businesses in Jamaica was crime; 92 per cent of managers identify this as being a major problem and that no effort should be spared in bringing it under control."
Wage increases and wage increase demands were seen as excessive and not reflective of performance. The average wage increase granted in the period 2001-2002 was six per cent, while there was only a two per cent increase in productivity, this support calls for performance based pay, the report said..
"Employers are dissatisfied with workers' attitude towards work and the level of education of most workers, so said 64 per cent and 60 per cent respectively. Together they account for 77 per cent of human resource problems. This is an extremely vexed issue given the fact that 77 per cent of employees in the manufacturing sector were found to be below the required competence (source Trevor Hamilton's report for the Jamaica Manufacturers Association on Jamaica's competitiveness).
"The fact that as much as seven per cent of tertiary level educated workers have migrated (according to The Economist September 28, 2002), no doubt that these would be the better of the lot, may be the reason for the unsatisfactory performance of the domestic stock of human capital."
The report said that the Government needed to be more proactive in ensuring the viability of local enterprise, "this is the sentiment expressed by one overseas investor".
It said that in a letter addressed to the JEF, "a prominent manufacturer informed us that Jamaica was overlooked for a US$3 million investment. According to the investor, his company had complained about dumping that was hurting his business, to the Governments of Barbados, Trinidad and Jamaica. The matter was dealt with within two months in Barbados and Trinidad, but has yet to be resolved here. What is alarming about this case is that the complaint was made more than six years ago. The investor will instead of Jamaica make the investment in either Trinidad or Barbados."
The lack of incentives, sluggish economic performance and divestment of crucial services were some of the main concerns expressed by the employers. Small charges and fees primarily related to trading were seen as irritants to smooth and successful operations.
The entire sentiment expressed by the participants in this survey is encapsulated in this quote from the managing director of a leading commercial bank, "The major problem for employers in Jamaica is the seemingly uncontrollable crime problem and the over-bureaucratic framework within which to operate," the report added.
On a more positive note it identified reduced crime, less 'red tape', lower wage increase and less wage increase demands, higher education and skill of workers, better attitude towards work, lower rates of interest and inflation and a more stable exchange rate, as the most desired incentives.
In addition to identifying the challenges and incentives the JEF also made a number of policy recommendations. These include unemployment insurance, exporting labour and greater technical support for small and medium size enterprises. The JEF also put forward a framework in which these objectives should be undertaken.
