Earl Moxam, Senior Gleaner WriterDR. ANDRE GORDON, president of the Jamaica Exporters Association (JEA) has scoffed at suggestions that Jamaica will not be ready for participation in the CARICOM Single Market & Economy (CSME), scheduled to come on stream in January 2005.
Strong doubts were raised about the country's preparedness for participation in the regional trading bloc by Opposition Leader Edward Seaga, when he spoke in the Budget Debate in April. The Jamaica Labour Party Leader, in his April 22 analysis of the situation, cited, among other things, Jamaica's already huge trade deficit with the significant trading partners in CARICOM and what he said was the country's low productivity levels.
Jamaica, he said then, should regard the proposed Caribbean Single Market as "a wayward journey and set our course to catch a fresh wind for our sails".
But, Dr. Gordon has no such misgiving. "I think Jamaica has been CSME-ready for sometime now. This argument about our participation in the CSME is a spurious argument that arises from a lack of understanding of the reality!"
That reality, he argues, is that Jamaica's markets are already totally open. "No more goods will come in from the Caribbean than are coming in now. On the contrary there are markets that we have not been easily able to penetrate because there is still a different set of rules, whether written or in reality, for domestically produced items as against other CARICOM trading partners. Under the CSME this duality can no longer exist, which would mean much easier access to several of the larger or more affluent markets of the Caribbean for our own producers."
The JEA president is already looking forward to the much enlarged market that will be available to Jamaican producers when the CSME becomes a reality.
GREATER OPPORTUNITIES
"What will happen is that, instead of having a domestic market of 2.5 million and an overseas Jamaican market of another 2.5 million, you would now have a domestic market (including Haiti's population of eight million) of 12-14 million. This represents a much larger home market which would present greater opportunities and a greater likelihood of being able to compete with the rest of the globe."
But the head of the JLP-affiliate, Generation 2000 (G2K), Dr. Christopher Tufton, does not share Dr. Gordon's unrestrained enthusiasm.
"If ready is defined as being competitive in relation to other territories in the region then the truth is that we are not ready; and that is the measure by which most people would determine the matter," he argues. "By virtue of our size we are naturally going to be targeted by the rest of the region. It is less attractive for us to be targeting countries with less than 100,000 people, whereas it will be attractive for them to target our market of 2.5 million."
As for that potential Haitian market of eight million, he argues, that is not to be taken too seriously at this time, "because I have serious doubts about the spending power of most of the Haitian people".
Nevertheless, Dr. Tufton, a lecturer in International Marketing Strategies at the University of the West Indies, acknowledges that Jamaica cannot afford to stay out of the CSME.
"The CSME of itself if not the problem, because the challenges of the FTAA (Free Trade Area of the Americas) are going to be ten times worse. I describe the CSME as a trial run for global liberalisation. The real challenge is for us to get ourselves ready to compete. This is not only policy-related from the states' point of view but private sector as well. We have to look at training of workers and retooling of our companies. We also have to look at for-ging strategic alliances. We will have to accept the advantages of sharing with other companies in the region. Some companies like Grace, Kennedy and NCB are heading in the right direction, forging strategic alliances in these other territories or taking over some of these companies. If we do that, then ultimately we will have benefited from the experience," he concluded.
Asked to cite specific areas in which Jamaica can be competitive in the region, Dr. Gordon highlighted pharmaceutical items, processed foods, chemicals, and masonry products. In the area of services, he says Jamaica is also highly competitive in the entertainment sector, and in the provision of technical and scientific services. Dr. Gordon, a food scientist with significant experience providing consultancy services throughout the region, says, particularly in the OECS states, Guyana, Suriname and Haiti there are many needs which just cannot be filled, locally.
The tendency, he says, is to fill these vacancies from outside of the region. But, once we are able to have an understanding of what's going on, there will be significant opportunities for companies in Jamaica to tender to provide these services. So, instead of looking at the Jamaican market as your base, if you have a management consulting firm, you will now have the entire region as your base, not only for contracts with private firms, but with regional governments as well.
NON-TRADITIONAL EXPORTS
With the JEA having just concluded its annual Export Week observances, Dr. Gordon, is bullish about the sector's recent performance, particularly non-traditional exports, for which the JEA has responsibility.
"Overall, exports, up to October 1993, increased from US$947.3 million to US$991.3 million, an increase of 4.4 per cent. Most of this was driven by alumina exports, but when you disaggregate the figures, re-exports increased by over 30 per cent last year. And our information is that re-export is going to increase. Jamaica Ethanol, which imports raw ethanol, processes it and re-exports it, is expanding. Petrojam has been increasing its exports; Goodyear had in excess of 30 per cent increase in re-exports last year and is continuing this trend to continue. So we expect that the re-export component is going to keep improving."
These figures are in keeping with Prime Minister P.J. Patterson's own confident stance on the matter. The Prime Minister, in his address at the Diaspora Conference in Kingston on June 16, cited good performances in the area of value-added exports, as one of the reasons for his confidence in the Jamaican economy.
"I do share the Prime Minister's view about the prospects for, not just economic growth, but also particularly export growth, because of what has been happening," Dr. Gordon told The Sunday Gleaner, citing total non-traditional export growth of over 14 per cent to October 2003.
Many items in the non-traditional sector, he says, include products from the extractive industries, chemicals, and pharmaceutical items have increased by 12 to 20 per cent, while non-traditional agricultural exports have been growing at an average rate of 10 per cent. And, whereas Jamaican apparel exports have been on the decline for several years, Dr. Gordon is citing encouraging signs in this area as well.
STEADY GROWTH
Ambassador Peter King, chairman of the Caribbean Textile and Apparel Institute, agrees. In 2003, for the first time since 1997, apparel exports from Jamaica recorded growth of three per cent, taking total exports to US$220 million. This included exports to the United States, Canada, CARICOM, non-CARICOM region and the rest of the world. Exports to the U.S. showed a decline in some areas, but exports to the rest of the world showed steady growth."
The trend has continued in the first quarter of 2004, he reports, but cautions that Jamaica and other Caribbean Basin countries will face new challenges with the phase-out of the Multi-Fibre Arrangement (under which they enjoy favourable access to the U.S. market), at year end.
Despite the generally good report card, Dr. Gordon contends that there are several areas in which Government action is still required to facilitate further improvements in the export sector. These include implementation of the amended Export Industry Encourage-ment Act (with provisions to include services); reduction in duties charged for imported components of products or services intended for re-export. Similarly, he argues, the sale of intellectual property via compact discs or other electronic formats should not attract certain charges which do not apply when such transactions take place over the Internet.
And under the jurisdiction of the recently passed Geographical Indi-cations Act, he wants the same level of protection given to all things Jamaican as is now given to wines and spirits.
While the JEA president is happy with existing financing packages available to the sector from the Export-Import (EX-IM) Bank for the goods-producing sector, he says the Association is now engaged in discussions with the institution, with a view to having a new financing programme for services-related industries. These he says, include the entertainment sector and information technology-related services.
"These companies tend to be a little less structured than the traditional companies, but we have made it one of our priorities to find a way to drive the growth in that sector through technical and financial assistance, hopefully before the end of the year."
