Minister of industry, Commerce & Agriculture (Ministry of Industry, Commerce & Agriculture)

Jamaica is a major player in the Caribbean, with the second largest economy and, if you count Haiti, the second largest population. It also has serious competition on all fronts, however. Could you go over the main competitive and comparative advantages of Jamaica, and the areas where it has room for improvement?

We feel that Jamaica gives the best opportunities for investment in the Caribbean.  Jamaica is a good opportunity for investment because of its geographical location. We are close to surrounding economies in North America, as well as Central and Latin America and we could even extend it to Europe in terms of trade.  In terms of our general development, we have made significant strides in soft and hard infrastructure.  We have a sophisticated financial center and telecommunications network.  We are extending into the BPO sector, which is growing almost exponentially; however, there are some challenges there.  We have to build out the facilities to accommodate the growth in such a fast growing sector.  We see the agro industrial sector, which is where I am primarily focused, as one of the driving forces that is going to create economic growth.  The agriculture sector employs approximately 18% of the total work force (over 200 thousand people) and we have linked that with industry, commerce and fisheries.  The synergy that this creates is of enormous benefit to setting a stage for economic development.   Now, we are under one roof and that offers a lot of opportunities for us.  We have developed an excellent road network in hard infrastructure.  We have just finished the north/south highway to link with the north coast high way and we also have other arterial roads that have served us really well.  Our real focus here is on agro industrial development.  Implicit in that is a question of dynamic marketing strategy linked with the ability to package our products to meet international standards and by so doing we won’t only compete in the CARICOM area but also in Europe. BPO and the tourism sector can become the main drivers of our economy. I am talking about tourism in all its aspects. We have companies that deal with tours so that the tourists can go out and learn a lot about the country and so on.  We are a very stable economy.  With that kind of stability comes a level of confidence for foreign investors. We have a vibrant democracy. We transitioned from one administration to the next with ease.  We have no upheavals or clashes of hostility.  In that regard an investor can be assured that any decisions taken by one administration will be honored by the next.  We believe in continuity.  We are not endowed with oil but we are competitive in other areas.  The productivity of our workers compares favorably with anyone anywhere.

Your main objective is to use the Ministry of Industry, Commerce, Agriculture and Fisheries to assist in the growth agenda by improving our ability to attract foreign exchange.  Not only to produce for local consumption but we must be fixed in our agenda to look outward.  Essentially Jamaica’s problem is not as much as domestic problem as it is our shortage of foreign exchange.  Foreign exchange enables us to make the kinds of domestic investments and to have the flexibility to engage the government in this kind of projects that create jobs

We are focusing on responsible fiscal management. We have to live within our means. As a government, we are no different from the average family.  There is no point in going out of your way to acquire things that you can’t afford.  In my humble opinion, there are two strategies to development.  It is very similar to the operations of a company.  If a company has a decline in sales and as a consequence the profits go down, the board of directors or the CEO has a simple choice to make:  either you call the accounting team and say look at where you can cut expenses, contain the budget and cut back on what we had planned to spend or the CEO can say use a combination of two essential factors.  You could call in your marketing manager and say go out and market the products more dynamically, put money behind the advertising program to grow the size of your sales and at the same time look carefully at what you are spending.  It is a combination. I like to compare government to business and its approach.  As we work the debt to GDP ratio down, it will give greater confidence to the business community that Jamaica is a place that you can invest in without going through the trauma and dislocation as a result of being debt ridden and incapable of having the fiscal space to contribute to projects that can create employment.  

The country is also facing some serious challenges: it has a very high debt to GDP ratio, and other than tourism which has had a relatively slow but stable growth, other sectors of the economy have not been performing well. What can be done in the near future to change this trend? On that same note, what areas of the Jamaican economy do you think show potential to become attractive to FDI in the immediate future?

When the Prime Minister was the Minister of Education he made a profound point which has stuck with me.  He said ‘I am part of the crime fighting mechanism of the country because I am in the business of educating our youth'.  You will always find that people who are deficient in their education are always suspicious and hostile towards people who have it.  So the more educated the youth become, the less inclined they are to be hostile to their friends and get into criminal situations.  Imagine what life can be like for a youngster, who at the age of 14 is the most educated in a family of five, and who because of the situation of his family has to do his homework under a street light outside.  He faces all those challenges and passes his examinations and does well. He has a choice; either get a job in a factory, become a clerk or go back to school and get a higher education.  Now, let us assume he has the capacity to absorb teaching and become a professional.  He doesn’t have the money to take up the challenges of tertiary education.  It forms a layer of frustration. He is discouraged and he is disappointed.   When the Prime minister speaks of economic growth and job creation, it’s a tool by which we will be able to contain the growth of crime.  We tried to do it through a program called HEART.

When we met with Prime Minister Andrew Holness, he mentioned the reverse relationship between crime and economic prosperity. Right now, we’re talking about policing and other direct ways to address Jamaica’s security issue, but how far can job creation and similar business-related approaches go towards solving this problem?

One of the things we are looking at is establishing renewable energy.  This is an area where foreign investors can come in and partner with us.  The beautiful part about our approach is that we are ready and able to partner with the private sector.  We don’t believe that government should be involved in private sector businesses but we can serve as a support base for the private sector. We need private sector partners to help develop our wind, solar and hydro, renewable energies.  Those are the kinds of things that will reduce the cost of energy and just as Vice President Biden says, we are benefitting now from low oil prices, but what happens when they go back up? We need to be prepared. We need to move quickly to have our renewable facilities in place as a buffer against any likelihood of an increase in fuel prices. In the area of energy, we see the use of LNG as a tremendous improvement and our plant is well on the way to converting fossil fuel into LNG using the facilities presented by the United States based on President Obama's undertaking to assist us.  We are very grateful for that.  I am very excited about Jamaica because we are a strong brand.  There is hardly anywhere you go and nobody knows about us because we have some of the greatest performers in the world.  We currently have the fastest woman and the fastest man on the planet.  From a country that is 145 miles wide, with less than 3 million people and both at the same time!  And I can tell you we have a couple more coming.  We are hoping that our economy, within this five-year term will show improvement and it will encourage investors, in agriculture significantly.

Logistics is perhaps one of the areas that may show the most change in the near future with the expansion of the Panama Canal, the opening of the Nicaragua Canal and I believe the Kingston Harbor will also be redeveloped to accommodate more and bigger ships, while the minister of transport has told us about the Vernamfield redevelopment project. How do you see Jamaica’s future in that regard?

Because of our location and the fact that we have the 7th largest port in the world, we are going to dredge that to accommodate the large vessels that will be coming through the Panama Canal. In addition, we have the Caymanas Lands, which are adjacent to the ports.  I have always had the vision that that site would be a growth driver through the development of special enterprise zones.  We could have the assembling of products, where parts come from areas of the world and we would assemble them there, package them and sell them to North America. We don’t have the size or the level of production that affords us the advantage in terms of providing all that it takes in finishing a product from raw material to product.  In some cases, we do like with sugar and rum.   You can have various things made all over the world and you bring them to Jamaica and add value.  You create jobs.  Today, seafood, fresh foods fisheries, and those products are brought in, processed and packaged and re-exported. That is the way of the world. You then have the taxes, which will flow from those who are employed, this will give you more revenue for infrastructural development and the cycle continues. That is the direction I think that we are looking forward to in Jamaica.

You’ve spoken to the gleaner about the government’s intent to restart the financial reform process which wasn’t completed during the previous government’s tenure. The Prime Minister insisted on Jamaica having no intention of becoming a tax haven, so how do you see Jamaica materialize its future as a financial hub?

A move in that direction by the government of Jamaica would have as its main focus the insistence in transparency and the avoidance of any dealing with suspect sources.  We have a group of highly trained professionals in the field of accounting management as well as professional clerks. Employment will be significant and the spinoffs from that level of activity taking place in Jamaica to manage those funds would be tremendous. Therefore, we are looking forward to the expansion of that project. Right now, we have the Financial Services Centre just awaiting the final touches for the legislation to be brought to parliament.  

Companies like Musson group are already doing a lot in way of manufacturing: they just bought Nestle’s manufacturing assets in Jamaica and have a long and successful track record. Red Stripe has also moved its agriculture and manufacturing back to Jamaica. Is there a turning point for the growth of manufacturing and agriculture on the horizon?

Our strategy revolves around the expansion of the agro industry.  You have named two examples and there are others that are the beacon of this strategy.  Regarding the Musson group, they have gone one step further as they already own a sugar estate.  They are not looking at just production but they want to bag it and ship it to Europe at knock down prices. They are using the sugar as a raw material to make byproducts that can be packaged and traded locally and within CARICOM to start with.  It is a perfect example of the virtual explosion of our philosophy.  This leads me now to Red Stripe. They used barley in the production of their beer.  They did some research and realized that cassava does not alter the taste at all.  They have come up with a very unique marketing and production approach.  They are ultimately going to have about 3000 acres, but they themselves will not manage more than 350 because we are going to help them with the management of the land.  We are going to offer them the land.  They will cut up those plots into units that can be leased to groups of young people and general farmers.  They will be given a guaranteed price and assistance with the starting of the business.  The farmers will be adding their labor and the husbandry of the crop.  Afterwards, Red Stripe will buy it from them and put it into their beer.  There are others going into pepper. In the case of Musson, they bought Nestle to manufacture liquid sugar that’s going to make products for Nestle, which will be going to market for the Caribbean and the North American market.  They are going to take some of the animals that they have at their farm and they are going to give young farmers a certain number of heifers. It has got to have an economic quantity.  They will finance the construction of the milking parlor with the understanding that it will be covered by the proceeds of the milk sold to Nestle.  This summarizes our business ideas as a community for Jamaica.

Internationally, Jamaica is largely known for being the heartland of the Rastafarian religion, which is often associated with marijuana. In addition to decriminalization in Jamaica, we’re seeing a number of places in the world, notably several states in the US, where it’s being legalized and has become a burgeoning industry. Can we expect Jamaica to capitalize on that trend in the near future?

At this stage, we are not considering the use of marijuana and the growing of it for social purposes. We respect, in the case of the Rastafarian community, the sacramental rights that they have for introspective use of marijuana.  Jamaica has relaxed the regulations with regards to social use in limited quantities so it is not to say that we are going to cultivate hectares of weed to put the whole country on a high. We want to grow these products for therapeutic and medicinal purposes. We will use them locally and we hope to get entry into the world.

You were also Minister of Industry during the previous JLP government. Are there any policies you started at the time and you wish to continue now? Are there some you hadn’t thought of at the time that you’re going to implement in this term? (What are your proudest accomplishments, what were the biggest challenges, and what’s next for you?)

Well first of all, I did not have agriculture along with it. Agriculture has a vibrant conch industry and a lobster industry as well.  That is an area we are looking to process for export - byproducts of both.  It is an area of great excitement.  For industry and commerce, my biggest disappointment is not realizing my dream of developing Caymanas enterprise zone.  I tried to encourage Chinese investors to come and partner with us.  I had visions of vast numbers of Southern St. Catherine residents being employed on this particular zone.  Whereas China started off as the factory of the world, they are now getting a greater slice of the cake because the innovator gets about 60% off the value of a product. You build an economy on the price of the products that are innovative rather than simply building things for people.  We would start by assembling products for other parts of the world and as our efficiencies increase we would start to innovate and manufacture for ourselves.  That hasn’t taken place and it is a great disappointment for me. For instance, having a fly over bridge from the port straight into Caymanas, a light aircraft facility, hotels in the middle of it, BPOs and those kinds of service areas. I think I have some distinct accomplishments.  I think I was instrumental in facilitating the reduction of bureaucracy.  I have taken a personal interest in the creation of a company through electronic means.  We are not quite there yet but I see the possibilities of that coming on stream by June.  Again, I think we will climb in the Doing Business Report because we have facilitated that process.

The readers of Harvard Business Review include some of the most influential business leaders and decision makers in the world. Do you have a final message for them as a conclusion to this interview?

I think there is a great future for Jamaica.  We have had our difficulties and we have learnt from our mistakes. I think our Prime Minister is very creative and he is not a person who is afraid of thinking outside the box and doing things that have never been done before. Take for example, the creation of the growth ministry.  It enhances our ability to further remove unnecessary bureaucracy. We have the tendency to do a lot of talking, but when it comes down to measuring it we do not set objectives that are achievable and the results don’t add up to the expectation.  We want to look at the problems we are faced with and set targets that are achievable. We are prepared to be judged according to the results of what we have set as a target.