Milford Williams, Gleaner Writer
Seaga on the region - "Jamaica is at a grave disadvantage in the regional setting. The education system, as it currently stands, is not geared to lifting productivity and improving competitiveness in the marketing of Jamaican goods and services," writes Edward Seaga. Follow his comprehensive, thoughtful analysis on the Caribbean Single Market in The Sunday Gleaner.
FORMER PRIME Minister Edward Seaga has called for Jamaica to improve its price competitiveness if it is to experience substantial growth in productivity and progress as a member state of the CARICOM Single Market (CSM).
"The trade gap will widen and the crisis in the economy worsen with participation in the CSM under current productivity performance," he said.
Mr. Seaga pointed to recent studies that have found that the lack of price competitiveness in Jamaican exports can be found in low productivity, arising largely out of inadequate skills and macro economic instability.
His call came yesterday as he addressed business and other leaders in the first of the 2006 Trade Seminar Series entitled 'The CSME: Potentials for Gains and Losses'. The seminar is put on by the Jamaica Chamber of Commerce and is presented jointly by The Briefing Room, Myers, Fletcher and Gordon, and the National Commercial Bank.
Mr. Seaga, a former Minister of Finance, noted that the poor performance is not to be found in any lack of product acceptance by consumers. "In a region where the producing countries carry much the same lines of production, preference is largely driven by competitive pricing."
WIDENING GAP
"In the 30 years of CARICOM trade, Jamaica has moved from being a net exporter to a net importer, a position it has maintained since 1992 with a widening gap each year," he stated.
A study on productivity rates in the Caribbean by Benthan Hussey of the Planning Institute of Jamaica (PIOJ), ranked Jamaica an embarrassing 19 out of 25 in the comparative period of 30 years, 1960-1990.
A major reason for the low rating of Jamaican productivity as revealed by the study was that wages increased annually by 1.8 per cent and unit labour costs by 3.1 per cent, while productivity was decreasing by 1.4 per cent. Mr. Seaga said that this was a move in the wrong direction.
"If wage increases exceed productivity, competitiveness in the price of goods and
services will deteriorate and the purchasing power of consumers will erode," said Mr. Seaga.
He drew attention to the poor performance in the agricultural sector and sugar production in particular, which dominates the sector.
"Agriculture has a notoriously low productivity rate, because of low and inefficient production in the sugar industry."
According to findings of the Report on the Task Force on the Sugar Industry in 2001, the average cost of production is considerably greater than other comparable countries. The cost per ton in Jamaica was US$660 while in other African, Caribbean and Pacific countries the price was a considerably lower US$375 per ton.
Mr. Seaga noted that the problem extends to the apparel sector; once a large foreign export earner, but now reduced to a few surviving producers with many workers made redundant. He added that "this is not a viable scenario for involvement in the CARICOM Single Market."
