Growth agenda achievable
... Even though stymied by ongoing decline in some sectors
JAMAICA’S GROWTH agenda is being stymied by the ongoing stark decline in key areas such as manufacturing, service and energy sectors, a situation which will require a structured, national collaborative effort to build on the economic gains achieved, according to one of the country’s economists.
But the man making those observations, Dr Charles Douglas, chief executive officer at the Jamaica Productivity Centre, has confidence that Jamaica can make it happen. “The fact that I am sitting here in this job means that I am hopeful. If I wasn’t hopeful, I wouldn’t be sitting here,” he told The Gleaner in an interview.
The Jamaica Productivity Centre is a tripartite organisation comprising the Government of Jamaica – through the Ministry of Labour and Social Security, the Jamaica Employers’ Federation and the Jamaica Confederation of Trade Unions.
Douglas believes the failure of local businesses to invest in new and emerging technologies over the years has had a major negative impact on their bottom lines as borne out by a labour productivity study, conducted by the organisation, spanning the period 2001-2015. It shows that while productivity rates were up for construction (0.7 per cent); hotels and restaurant (0.6 per cent); agriculture, forestry and fishing (0.5 per cent); and with transport, storage and communication recording a 0.4 per cent uptick, this improvement was not matched by other key sectors.
Manufacturing recorded a -0.7 decline, with finance and insurance services falling by -1.3 per cent; electricity, gas and water dipping by -1.4 per cent; the wholesale and retail trade showing a -1.5 fallout; and government services falling by -1.7 per cent.
The economist offered this interpretation of the reality behind those numbers.
“Between 2001 and 2015, the growth rate of labour productivity was -0.7 per cent. So labour productivity has been declining at an annual average rate at 0.7 per cent, and that’s not good,” he said.
The cumulative negative performance of manufacturing, finance and insurance services, electricity, gas, wholesale and retail trade, mining and quarrying, real estate and business services must be addressed in order to achieve sustained growth, according to Douglas.
“The overall picture is that some industries are showing positive growth, although small, and some negative. Our job is really to do what it takes to reverse those negative productivity numbers,” he said.
“There are some elements or some businesses in the society, even public and private businesses, that are productive. However, there are companies that are really lagging; they have not done anything different from what was being done probably 100 years ago. They have not embraced technology, they have not embraced innovation, and even if they have embraced ICT (information communications technology) they have not used it productively to market their business or to improve the overall efficiency of the business.”
‘FIVE IN FOUR’ INITIATIVE
Despite this, Douglas is of the view that the Government’s ‘five in four’ initiative, which projects five per cent growth in four years, can be achieved if the right policies and methodologies are implemented.
“I think it’s a target that is achievable. It’s achievable, but we have to do some specific things,” he said.
“We have to look at what are our growth areas. For example, agriculture has been showing positive growth, but we have to set specific targets to make sure that we get the necessary investments, growth and employment, all of which will result in increased standards of living.”
He added, “At the end of the day, all of what we are doing was designed to improve standards of living. ‘Five in four’ is really a modest target, it’s not that ambitious. A lot of emerging market economies have been growing at seven, eight, nine and 10 per cent per annum and we have been growing at less than one per cent. It means that we have not been doing something right. I am hoping that with the ‘five in four’, we can target the things which we have not been doing right and do them right.”