Jamaica’s earnings from the bauxite levy are not expected to yield anywhere near the projected $6 billion for the 2009/10 fiscal year, consequent on the global economic downturn, Finance and the Public Service Minister, Audley Shaw, has said.
“We will be lucky if we earn half of that,” Mr. Shaw told the launch of the FINPYME company competitiveness programme, at the Jamaica Pegasus Hotel in Kingston today (Monday, Mar. 2).
“The latest, most ambitious projection is $2.8 billion in earnings. Chances are, it might be less, but the Government (and particularly) Prime Minister Bruce Golding, is working on a programme to seek new markets,” Mr. Shaw explained.
Finance and the Public Service Minister, Audley Shaw (right), is amused by a comment from the Inter-American Investment Corporation (IIC), and Inter-American Development Bank (IDB), Alternative Executive Director for the Bahamas, Barbados, Guyana, Trinidad and Tobago, and Jamaica, Ambassador Richard Bernal, during the launch of the IIC’s innovative diagnostic review facility, FINPYME, at the Jamaica Pegasus Hotel, in Kingston, on March 2.
“Next week, we are sending off a special team overseas, in search of special markets where we can, hopefully, be able to establish some contracts, (so) that we can keep some of the bauxite companies open to produce for those contracts,” he added.
Mr. Shaw also contended that pursuing economic transformation meant looking beyond traditional income earning industries, such as bauxite, in order to enhance productivity and secure earnings.
Finance and the Public Service Minister, Audley Shaw (left), in discussion with Principal of the Mona Campus of the University of the West Indies (UWI), Professor Gordon Shirley, during the launch of the Inter-American Investment Corporation’s (IIC) innovative diagnostic review facility, FINPYME, at the Jamaica Pegasus Hotel, in Kingston, on March 2.
Mr. Shaw also stressed the “urgent” need for structural adjustment in the economy, to facilitate the significant levels of productivity and growth recorded in previous years.
He attributed the financial sector meltdown of the 1990s and the ensuing challenges triggered by the establishment of the Financial Sector Adjustment Company (FINSAC), to a collapse in the productive sector and a “hostile macro-economic environment.”
“In the 1980s, when we were growing the economy, the Koreans, Hong Kong and China came and set up businesses in Jamaica. The United States had the 807 programme at that time. Was it a coincidence, or was it because of a strategy, that between 1986 and 1990, the Jamaican economy grew by an annual average of six percent? Not coincidental. It was a strategy of structural adjustment,” he stated.
Mr. Shaw added that, given the global financial downturn, the need for structural adjustment and economic transformation was more urgent now than in the 1980s, if the country is to return to a “productive path.”
“For the past 12-15 years, (we) have been limping along at economic growth rates of below one per cent per year, somewhere in the region of 0.8 per cent per year growth, every year. Unacceptable!” he argued.
“We need a return to production and productivity, a return to export, a return to foreign exchange earnings, and, if I might say so, a return, even, to import substitution,” he stated.
“If we can produce more of the things that we need to consume in Jamaica, we add more value, we create more jobs, and we are not in need of so much foreign exchange to purchase the finished goods,” he reasoned.
He said that the thrust in these directions had started, despite the “slips and slides.”
“We started with the apparel sector in the 1980s, (and) we saw (it) moving from earning US$10 million in the free zones, and employing just over 600 people, to eventually earning over US$600 million, (and) employing over 40,000 people. I am not necessarily saying that apparel can do as good today as it had done before. But there are other industries and opportunities, and we must find those industries and opportunities,” he said.
Mr. Shaw highlighted the relevance and importance of FINPYME.
FINPYME, a Spanish acronym for innovative small and medium sized business financing, is a system for selecting and evaluating small-medium sized enterprises to perform a thorough diagnostic review of their position. It is also designed to empower small and medium-sized enterprises, by providing them with the tools to become more competitive and enhance their access to potential sources of funding.