Dennie Quill, ContributorWHY CAN'T we make our own bath soap? This question came from a friend as we sat down on Father's Day musing over prospects for our economic prosperity.
Not one to muffle my opinions, I immediately reeled off a dozen reasons why I would not encourage anyone to go into any such venture. I had to check myself because of the outpouring of negatives.
It's not that I am afraid to take risks. But the Jamaican entrepreneur faces so many brick walls. Let's examine the kind of challenge he faces. There is likely to be a hefty security bill and even with hired security guards he probably has to pay protection money to area thugs. Internally he has to keep an eye on his workers who will sneak anything of value in their underwear.
UTILITY COSTS
Then there are those huge utility costs. A legitimate businessman cannot benefit from "social" water and electricity so he has to pay huge sums each month. His only respite may be in the area of telephones. Every businessperson should be dancing on his ceiling because of the remedy provided by the cellular phone revolution. It seems every employee has one or two phones and this must surely cut down on the use of business phones for personal calls; stealing time on the job is another matter.
We know that investment is dependent on the interest rate regime. One of Jamaica's brick walls is high interest rates fuelled of course by huge Budget deficits. Interest rates of 30 per cent and above cannot be sustained. Meanwhile our CARICOM partners can secure attractive rates of eight per cent.
Sector leaders also point to transportation costs, high wages and inconsistency of raw material which all contribute to the blighting of our export potential.
Is it any wonder that entrepreneurs have been heading south? We are a country given to studies and I would love to know whether the rural worker today is producing more or less in quantity of goods annually compared to say 1938? It would be instructive to see those numbers.
BALANCE OF TRADE BLUES
A depressing example of the accelerated relocation of production from Jamaica to the south can be seen in our supermarkets. After our discussions I went into a city supermarket and out of curiosity I looked at the row of soaps. They were made in Puerto Rico, Trinidad and Tobago, the Commonwealth of Dominica and, of course, the United States.
Soap is one of the many commodities in which our CARICOM partners are dominant. Understandably Jamaica has an unfavourable balance of trade with its sister countries. Total Jamaican exports to CARICOM in 2002 valued US$26 million while we lapped up US$224 million in imports from the region. This has been the trend over the last couple of years.
It's not that Jamaica does not have the potential to produce quality products. We have some excellent offerings on the market and I immediately think of some of the exotic juices that are now available and the whole range of condiments that are the envy of the gourmet cooks.
The manufacturers are the first to lament that their products are uncompetitive because of the high capital costs. Their survival, and apparent good health, is a miracle. One frustrated small businessman, convinced that the Government is not serious about the export sector, suggested that if things continue in the same vein, Jamaica will only have its human capital to export teachers, doctors, nurses, and IT professionals.
The brick walls need to come down. There is a golden opportunity for the powers that be to reinvigorate manufacturing and the export sector. It would be a welcome step toward a better future.
Dennie Quill is a veteran journalist.
