WHILE THE world is moving forward, providing greater consumer choices and freedom, better products and services, more competition and cheaper prices, Jamaica moves backward, toward protectionism, increased tariffs and higher prices.
The imbroglio over the increase in tariff to 50 per cent on imported cement to give Caribbean Cement Company a breathing space for four years or more is an indictment on government's economic policies that have strangled, frustrated and devastated the country's manufacturing and productive engines. Com-petition is being strangled and, without competition, who protects the consumer?
Competition is in fact the fuel for economic progress. It is the basis on which a company improves its efficiency, considers the needs of the consumers and satisfies the demands of the marketplace. Competition keeps the providers of goods and services on their toes, removes the inefficient and weak, and ultimately strengthens the manufacturing and productive sectors of the economy.
We see competition at work in the gambling industry where Supreme Ventures Limited with its attractive and enticing games have simply swallowed up Jamaica Lottery Company, which tried initially to keep it out of the market. We see competition at work in the telephone sector, where Digicel, in particular, has forced Cable and Wireless (C&W) to provide better products and services and C&W has forced Digicel to reduce its charges, and both now provide overseas rates, which are globally competitive.
COMPETITIVE ENVIRONMENT
In a competitive environment, the consumers are the main beneficiaries. Quite simply, I have very little sympathy for local manufacturers who cannot survive without government's cuddling and protection. In a globalised economy, which we must embrace and do so quickly, the only survivors are those who can produce goods and services cheaper and better than others. Where were the voices of the local manufacturers and producers, when the Goodyear factory, garment industry, Caribbean Steel and the many other industries, local and foreign owned, were being closed and forced to shift their production to other countries, as it became uncompetitive and unprofitable to operate here. These companies found that government's economic policies favoured imports and trading, instead of production to satisfy the local market and for export.
I have argued in these columns before, and do so again, that when virtually every industry needs protection to survive then Jamaica is locking itself into a closed, inefficient and unsustainable marketplace. From where I sit in Parliament I hear the pleas of the providers of beef, milk, chickens, eggs, rum, vegetables, sugar, etc. for protection and high tariffs in order to survive. If we provide higher tariffs for cement, then why didn't we give it to the manufacturers of soap, toothpaste, razor blades, toilet paper, pharmaceutical products, steel, baby feed, ice cream and so on, to induce them to remain here? If Caribbean Cement gets the protection it demands, then why shouldn't the local producers of T-shirts, uniforms, furniture, paint, ice cream, beer, soft drinks, and even bottled water?
Something is definitely wrong with our manufacturing and productive base and the manufacturers and producers need help. I appreciate that they cannot survive in the present economic environment and something must be done. However, the cost of production, efficiency and competitive edge will not be optimised by higher tariffs, protection and deliberately shifting the burden to the consumer.
They need to look elsewhere for improvement in their productive efficiency and ability to produce cheaper and better for the globalised marketplace. Singularly, and collectively, they must demand a better economic environment that can give them the competitive advantage without having to rely on tariffs and protectionism. To be sure, Jamaica needs to produce its way out of its problems but it is not going to do so by keeping out foreign producers with high tariffs. We must instead find the right economic formula to produce cheaper and better for our local consumers, and ultimately for those in the region and the world.
PRODUCTIVE PROCESS
Imagine if producers could get money to borrow at low single digit rates? Suppose the costs of security, transportation, electricity, labour, and other goods and services in the manufacturing and productive process, were fair and reasonable? If only the bureaucracy and government red tape were less burdensome, clogged and costly, wouldn't goods and services be more easily and cheaply produced?
Surely, these are matters which need to be addressed, and if addressed fully, wouldn't the whole country benefit, instead of only a few producers? Why therefore should we agree for favoured sectors of the economy to get protection when in the long run it merely chokes the long-suffering consumers and prolongs the country's productive inefficiency and unfavourable economic environment?
In truth, it is now crunch time. Government's economic policies have finally caught up with every sector of the economy. The asinine high interest, which everyone now concedes is unsustainable, is largely responsible for destroying our productive and manufacturing capacity, while hurting the overall economy. It is about time we demand that the country's leadership, management and purpose be geared towards economic production, expansion and, I daresay, survival.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by e-mail at
delchuck@hotmail.com.
