Richard Pandohie | Switching relays as we continue the fight for progress | Comment
The pandemic has changed our world, changed our individual perspective on life, and it has certainly reset our value system. From the perspective of the Jamaica Manufacturers and Exporters’ Association (JMEA), navigating COVID-19 has been one of our most difficult challenges, and in the same breath, it is shaping up to be one of our better teachers, forcing us to adapt to new standards. and reinventing the way we engage our people, customers, consumers and business partners.
The past year has seen the productive sector grapple with unprecedented supply chain disruptions, rising costs, significant loss of business due to disruptions in the hospitality and tourism sectors and restrictions operational due to national COVID-19 measures; which has significantly affected the cash flow of many businesses. This is corroborated by the JMEA impact surveys conducted from March 2020 to December 2020, which found that approximately 62% of our members experienced negative financial impacts and 49% experienced supply chain disruptions. Nonetheless, the productive sector has remained steadfast, keeping most of the people in our sector employed and keeping Jamaicans supplied with key commodities, thus preventing the build-up of large-scale panic that we have witnessed in many countries.
Although the Jamaican economy registered a significant drop of 9.9% after seven consecutive years of growth; with services down 11.8% and the goods-producing industry down 4.5%, I believe that as a nation we have collectively done a tremendous job of getting through the pandemic up to present. The government, thanks to tight fiscal discipline in previous years, had a cushion to cushion the shock. I must also commend the government for allowing JMEA and other stakeholders to sit at the table to contribute to key discussions.
While there is an alarming misconception that “COVID does”, we are a long way from a return to normalcy. In fact, our level of risk is uncomfortably high, and this needs to be addressed decisively with the rapid spread of vaccines which are expected to arrive in large quantities shortly. However, as we focus on protecting the lives of our people, we must simultaneously begin the transition to economic recovery and adapt to the reality that COVID is not going away quickly.
To date, we have struggled with economic survival and failed to seize the opportunity to diversify the economic base to create the possibility of more resilient, sustainable and inclusive growth. It would be a shame if we were to go through this horrible time just to become a “two-round” economy again. So many myths have been shattered and we can certainly see and plan more clearly now.
While JMEA has been a strong advocate for its members, we have never lost sight of the fact that we must be a voice for all Jamaicans. Too many of our brothers and sisters are suffering, too many are impoverished, including so many in the workforce who are on the treadmill of existence but not improvement. The pandemic has exposed and widened inequalities in society, showing that we are all in the same storm but not in the same boat. This is not good enough and needs to change.
During the period 2020/2021, the JMEA has made important advocacy to support and propel the economic recovery, especially on measures that will have a positive impact on small and medium enterprises (SMEs), which will need to be the driving force of the economy. ‘a solid economic recovery.
Some of our most notable contributions have been:
• Successful advocacy for the continued operations of our manufacturers and exporters at the onset of the crisis. We were successful in advocating for updates to the Disaster Risk Management Act (DRMA), which allowed members to continue operations outside of curfew hours. How important did it matter? Just look at how Trinidad worked differently and the impact it had on their makers.
• Not only have we worked successfully with the Government of Jamaica (GOJ) to enable several local manufacturers to expand their business to produce disinfectants, but local producers have done so well that GOJ has been able to restore import duties on hand sanitizers.
• Collaboration with the Bank of Jamaica (BOJ) to enable their flash auctions to prioritize manufacturers.
• Worked with the Jamaica Ports Authority (PAJ), Jamaican Customs and the Kingston Free Port Terminal (KFTL) to streamline policies to reduce logistical challenges for importing and exporting containers.
• Continuously advocated for Jamaica to become a signatory to the Madrid Protocol. After nearly a decade of battle, the protocol has been approved by the Upper House and the Lower House of Parliament, and within that year Jamaica will officially become a signatory. It will be a game-changer for local brand owners.
• Adoption of the five-year national manufacturing growth strategy by Parliament. This was developed by JMEA, JAMPRO and the Ministry of Industry, Investment and Trade (MIIC) as a strategic document to strengthen the contribution of the manufacturing sector to the national economy.
• Advocacy that led to a revised Jamaica Agricultural Product Regulatory Authority (JACRA) fee, resulting in a 50 percent reduction in primary production and export costs.
• Advocacy which led the government to abolish customs administration fees (CAF) for exports valued at less than or equal to US $ 500. A decision that has already had a very positive impact for micro and small businesses that have seen significant business transactions on e-commerce platforms.
Indeed, while I am very proud of our representation, the reality is that the productive sector must play a much bigger role if Jamaica is to experience a clear and inclusive recovery. But that will not be achieved by wishful thinking and talking on the porch. I recommend a few things to consider:
1. Research and development (R&D) incentives, especially for projects that use local input sources. We need to move from celebrating the production and export of primary products to celebrating value-added producers. Over 30 percent of agricultural production is lost due to inadequate post-harvest technology and the lack of value-added processing.
2. Accelerate STEM institutions. We have a deficit of technical skill sets, and this is one of the contributors to Jamaica’s appalling productivity record.
3. Use Jamaica’s logistical advantage to attract low complexity near-shore manufacturing in Special Economic Zones (SEZs). The current mess in the global supply chain presents a huge opportunity for Jamaica.
4. It is an unpleasant task for our nation to continue to tolerate the level of violent crime perpetrated against our people year after year. This is not a simple crime, it is domestic terrorism, which is estimated to cost us five to seven percent of our gross domestic product (GDP) each year. It robs us of our basic human rights, production, productivity, forcing our best-trained people to migrate, and costs businesses and normal citizens significantly to protect their assets. While COVID is a global pandemic, the crime has been a devastating epidemic, supported by a conspiracy of silence from those who can do and fear of those who cannot.
5. Our education system is failing and the pandemic has accelerated the failure rate, we must address it like yesterday, otherwise Jamaicans will increasingly only be employed at the bottom of the value chain. The Jamaican middle class is like a bikini at the carnival, barely there; it is a disaster for any country that aspires to real economic growth.
6. The private sector must work in collaboration with the GOJ. Too often we feel like we are adversaries, and that needs to change. We can agree to disagree on some things, but at the end of the day our common goal of moving Jamaica forward must trump our individual differences.
7. Any government resource (mainly land) that is leased to anyone must be reclaimed if it is not used for productive purposes within a given period. You can drive for miles and miles in this country and all you can see is the bush, but we have so much untapped export potential, so much food insecurity and nearly a billion dollars. of food imports per year.
The above list is not exhaustive, but let’s pick a few things and let’s get it right.
Special thanks to the JMEA Board of Directors and Secretariat staff for their tireless work and sacrifices which have played an important role in the victories we have achieved for members and the productive sector at large. I would also like to thank the government, in particular the Prime Minister’s Office, Minister Kamina Johnson Smith and her team at the Department of Foreign Affairs, Minister Audley Shaw and Minister Norman Dunn and their support team at the Department of Industry , Investment and Trade.
I must also salute Anthony Hylton, Leader of Opposition Affairs. To my friends from JAMPRO, EXIM Bank and DBJ, thank you for all the collaborations. Many thanks to the media for your support and for allowing us a platform to make our voice heard.
And last, but certainly not least, I want to thank the Jamaican people; you inspire me every day to strive to help make our country a paradise for all of us.
It has been my greatest honor and privilege to have the opportunity to serve as JMEA President. I am convinced that the new leader and his team will take over and take a meteoric step forward.
Richard Pandohie is the past president of the Jamaica Manufacturers and Exporters Association (JMEA). Send your comments by e-mail to [email protected]