Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, is welcoming the World Investment Report 2013 and its focus on the Global Value Chains (GVCs), especially in light of Jamaica’s push for the global logistics hub as a path to transforming the country’s economy.
Addressing the launch of the report, subtitled ‘Global Value Chains: Investment and Trade for Development’, at JAMPRO’s Business Development Auditorium, in Kingston on June 26, Mr. Hylton noted that the report clearly validates the concept of the hub.
“We simply need to focus. We need to read the report. We need to understand what it is saying. We need to understand what it is we have been proposing in the Global Logistics Hub Initiative. There is nothing that I want to change in that after I have seen this report. We simply have to get on with the business of implementing it,” the Minister said.
He pointed out that the entire objective of the logistics hub initiative is to participate in the global value chain in ways that drive economic growth, employment and income levels and to “make Jamaica that much more competitive as an entity.”
The Minister noted that it is very relevant that the United Nations Conference on Trade and Development (UNCTAD) report has chosen the global value chain as its focus and attempts to aid persons in understanding “what we have been struggling to communicate to the rest of Jamaica.”
The World Investment Report 2013 indicates that the development contribution of Global Value Chains can be significant. It informs that in developing countries, value-added trade contributes nearly 30 per cent to countries’ GDP on average, as compared with 18 per cent for developed countries. It points to a positive correlation between participation in GVCs and GDP per capita growth rates.
Global Value Chains, it said, have a direct impact on value added, jobs and income. They can also be an important avenue for developing countries to build productive capacity, including through technology dissemination and skill building, and opening up opportunities for longer term industrial upgrading.
Minister Hylton also stated that the 66 per cent growth in foreign direct investment (FDI) that Jamaica recorded last year over 2011, as revealed in the report, is just the beginning “if we get the logistics hub right.”
“We have the mix of policies right, we have the concept correct, what we need now is to stop debating and get to the business of implementing. I am looking forward to driving the process and I hope I can have all of you on board,” he told the audience at the launch of the report.
He reiterated that the Panama Canal and its expansion present a unique value proposition of which Jamaica must take advantage.
The Minister predicted that the trend showing increased FDI for Jamaica will continue as the Government pursues policies that are critical to ensuring that this happen.
He also noted that the training, the labour component, the opportunity for value added, the reduction in the cost of electricity, are all areas that the Government is targeting and moving to address.
Mr. Hylton said that the shift in investment from developed to developing country economies, as reported by UNCTAD, is creating new trade corridors, “and it is our participation in those new trade corridors that it will present the value proposition and the opportunity for Jamaica.”
The UNCTAD report reveals that for the first time ever, developing economies absorbed more foreign direct investments than developed countries, accounting for 52 per cent of global FDI flows. It noted that among developing regions, flows to Asia and to Latin America and the Caribbean remained at historically high levels, but their growth momentum weakened.
Global FDI fell by 18 per cent to US$1.35 trillion in 2012. The report notes that recovery to more vigorous investment levels will take longer than expected, mostly because of global economic fragility and policy uncertainty.
Contact: Andrea Braham