Manufacturers Urged to Use New Approaches to Boost the Sector

Industry, Investment, and Commerce Minister, Karl Samuda, has called on manufacturers to utilise applied technology and new approaches to enhance productivity in the sector.
This he said, should be coupled with increased output by workers, and pledged the administration’s support for these efforts.
“We have no hesitation to extending support to any manufacturer or community of manufacturers, manufacturing a product, where the supply is competitive, and the consistency and standard are up to a competitive level. The moment that you reach a level in your organisation, where you can demonstrate that level of proficiency, we stand ready, willing, and able to give you maximum support,” Mr. Samuda assured.
The Minister was lamenting what he says is a decline in Jamaica’s manufacturing sector, and it’s “flat” contribution to the country’s Gross Domestic Product (GDP), and has cited the need for the sector’s restoration to the competitive prominence it once held in the economy.
He was speaking at a forum on competitiveness in manufacturing, hosted by the Ministry at the Hilton Kingston Hotel on Thursday (Sept. 25). Mr. Samuda noted that the GDP has been growing at an average of just under one per cent over the last few years, of which the manufacturing sector’s contribution has averaged approximately 13 per cent. He noted that the sector was, at one point, not deemed to be impacting the economy.
“There was an old view that manufacturing was dead, and was not the kind of business to get engaged in because there was no future in (it). Quite frankly, it is my honest opinion that manufacturing is not dead..but it is not kicking as it should be. I would like to see manufacturing contribute, at least, 15 per cent of the Gross Domestic Product, and a GDP that is growing, not one that is remaining static. So the challenge is even greater,” the Minister stated.
Mr. Samuda noted that Jamaica’s current trade deficit is nearly US$3 billion, pointing out that in October 2007, one month after the new administration assumed office, the deficit had increased by some US$300 million over the previous year, and lamented that the country was “at a crossroads.”
“We better understand, because we can’t continue like this. Our exports have grown over the last seven years by 30 per cent (while) our imports have doubled that growth rate by just under 60 per cent. Our exports in October were US$1.92 billion, and what is often said is that we have shifted from manufacturing to service; and in that there is some truth. However, when you look at the tourism sector, in October 2007 (it recorded) $1.3 billion of foreign exchange earnings. That is not enough to offset or even come close to offsetting the deficit in trade.
“We are literally consuming ourselves into poverty and the sector that is supposed to be the producing sector, the service sector, is not filling the gap. And, the exporting community, made up of manufacturers, is not filling the gap (either); we simply have to address it,” the Minister said.
Mr. Samuda reiterated that Jamaica cannot afford to continue sustaining a current account with a $1.5 billion deficit, in the face of imports as high as 60 per cent. He noted that had it not been for remittances, the local currency would have depreciated to upwards of $100 to US$1.
“We would have to depreciate our currency. So we are literally surviving on remittances, because, for whatever reasons that have challenged us in the past, we have failed to produce enough to satisfy the consumption demands of our country. As a result, we are putting foreign hands to work by importing more than we export,” he argued.
Mr. Samuda advised that one of the steps, which will be taken to address this anomaly, is the convening of a meeting involving directors of the Jamaica Manufacturers’ Association (JMA); the Jamaica Hotel and Tourist Association (JHTA); the Jamaica Exporters’ Association (JEA); and the Small Business Association of Jamaica (SBAJ), on October 8, to discuss the way forward.
“We will lay it on the ground and say ‘now listen, this is what the Jamaican manufacturers can produce, tell us what you need to get done, and leave the rest to me’. Because if you can come (to) within 10 to 15 per cent of the price of the imported item in the tourism sector, and you can meet the demand, I will see to it that the manufacturers are protected,” the Minister outlined.
The forum, which was co-funded by the European Union (EU) and the Government of Jamaica, with collaborative input from the Target Growth Competitiveness Committee, Private Sector Development Programme (PSDP), and Jamaica Trade and Invest (JTI), represented an intervention to consult with the private sector, to, among other things, assist in improving participants appreciation of the issues involved in manufacturing and competitiveness for small open economies like Jamaica; and highlighting best practices in manufacturing. It was held under the theme: “Transforming the Jamaican Economy to Compete in a Globalised World.”