Business

Jamaica's optimal development path (Part 2)

DENNIS CHUNG

Friday, May 25, 2018

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After achieving the first step outlined last week — of identifying and implementing initiatives to reduce the major risks to economic growth — the next step for us should be to determine which are the low-hanging fruits we should exploit for development and provide employment and other economic opportunities for Jamaicans.

This, of course, requires an assessment of our resources and what can give us the maximum effect in the shortest possible time, while also employing those resources that will result in greater long-term social and economic development.

The low-hanging fruit again seem pretty obvious to me. These include tourism, business process outsourcing, infrastructure development (construction), niche agricultural produce (secondary primarily), and vocational training.

Tourism is the one that will drive all the others as it is our number one foreign exchange earner, is growing and is a very good sponge for labour. Two things we should do in tourism are: (1) continue the work of the tourism linkages council, which causes local inputs to find their way to the tourist dollar; and (2) develop the infrastructure (construction) around our tourism product and also deal with the discipline and order challenges (crime can only be solved by first imposing rules and order).

The irony about this is that we can increase our net tourism earnings significantly by not increasing the number of tourists coming to the island, which always seem to be a preoccupation we have. In other words, by increasing the linkages we have more of our earnings staying in the country (reducing our import dependence), and by improving the product (order and infrastructure) we can improve the value of the product so that, as I always say, a room on the “hip strip” will go for US$500 per night instead of US$250. It will also increase the spend in the communities.

My reason for saying that tourism is such a low-hanging fruit is that it is the only industry that has the potential to not only improve the direct tourism earnings, but can positively impact construction, training, and agriculture. It would, therefore, seem highly logical to me that one would want to place greatest emphasis around developing the value added from tourism as a priority.

One of the things that has always amazed me is that other countries have well-known museums, attracting many tourists because the museums are around what those countries are known for. In Jamaica's case we have the unique, and world renown advantage of our music and athletics, but there is no national museum showcasing those attributes.

When President Barack Obama came to Jamaica the first place he visited had nothing to do with politics or business. It was the Bob Marley Museum.

One of the things that has always amazed me is that we have never been able to capitalise on the rich history we have in Port Royal, and the possibilities it holds for tourism. In Greece, for example, millions of tourists visit annually to see the Acropolis ruins and the museum which, as far as I am concerned, does not have any great advantage on the history of Port Royal and the pirates about which a very successful film series, Pirates of the Caribbean, has been made. Why then have we failed to successfully follow through on the tourism potential of Port Royal and instead of being a global tourist attraction, with high potential earnings, it is a place better known for going to eat fish?

In Greece — where the primary language is not English — vendors can be seen selling towels with Bob Marley's image and reggae music is continuously played on the radio, in stores and hotels. Have we seriously capitalised on this? It is not for want of talking about the opportunities.

The final step is to determine what will be the strategy for the medium to long-term development.

This is obviously more difficult and requires a different skill set, as it needs some amount of forecasting and understanding of how demand will change, for example. But it may not require changing the things in which we have a competitive advantage, such as tourism, but rather how we can evolve the product so that it does not become obsolete.

It is because people, companies and countries fail to change why they become redundant. So, while it takes some brain power to do this, it is necessary for sustainable development.

What I am trying to say is that if we are to solve the problem of low economic growth and social development, it must be a deliberate strategy with a long-term vision. The problem we have had is that we have focused too much on the immediate problem with little forward thinking.

So, for example, in the past we have failed to see the advantage of freeing up the legislative and tax restrictions on capital. This was done with the incentives on the junior stock exchange, which has seen tremendous benefits for capital, people, and fiscal revenues.

So my view is that Jamaica has always had the natural potential to see substantial economic and social development, and the fact that it has not, and instead has had to go through too many IMF packages, is an indictment on not only our governance, but on us as a people.

While we are known for our music, athletics, and beauty, much of it emanates from individual effort, such as Bob Marley, Usain Bolt and Sandals. There doesn't seem to be any national effort to develop a global money-making brand for Jamaica. If this were enough, then it would not be so, but intertwined with these positive images. We are many times overshadowed by lotto scamming, high murder rates, indiscipline and ganja smoking, which result many times in the Jamaican passport being a symbol of suspicion at many airports.

Despite all of the negative images we have managed to acquire, the brand is still very resilient and we still manage to ignite interest globally. So recently I was in a country where the conversation with a few residents there was that they love Jamaica and the music, but they hear so much about the high crime rate and the low-income levels of the people.

To change this we have to take a very strategic look at our development options and take the necessary steps to optimise them.

— Dennis Chung is the author of Charting Jamaica's Economic and Social Development and Achieving Life's Equilibrium. His blog is dcjottings.blogspot.com.

Email: drachung@gmail.com

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