DEVELOPMENT VISION

Jamaica 2018 | DIPLOMACY | INTERVIEW

TBY talks to the Most Honourable Andrew Holness, Prime Minister of Jamaica, on efforts to foster sustainable and inclusive growth, the main challenges ahead for the nation, and its key successes in improving the business environment.

Most Honourable Andrew Holness
BIOGRAPHY
The Most Honourable Andrew Holness was born to working class parents on July 22, 1972 in Spanish Town, St. Catherine. At 43, he is Jamaica’s youngest Prime Minister to date and the first born after National Independence. Holness first served as Head of Government from October 2011 to January 2012, having succeeded former Prime Minister the Honourable Bruce Golding. Prior to assuming the responsibility of leading the nation, he had worked steadily at various levels of the political and governance systems. He has focused on several key portfolios areas including: social welfare, community development, housing, and education.

What are the key actions of your government in order to foster sustainable and inclusive growth?

The figures for 2017 will mark the fifth consecutive year of economic growth for the Jamaican economy and the highest employment level in the history of the country. These developments were supported by continued stability in the macroeconomic environment. This turn was supported by a sustainable fiscal policy. Fiscal consolidation has been one of the pillars that underpinned the improvement in Jamaica's macroeconomic stability, which was supported by fiscal rules that are enshrined in the country's legislation. One of the key commitments of the government of Jamaica under the fiscal rule is a reduction of Jamaica's debt-to-GDP ratio to a ceiling of 60% by the end of fiscal year 2025/26. Additionally, the country has implemented several reforms to foster a continued low and stable inflation rate, stability in the exchange rate, and a gradual reduction in the interest rate. Another important issue was addressing key supply side constraints to economic growth. The Jamaican economy suffered as a result of weather-related shocks as well as price shocks, particularly fluctuations in oil prices. These shocks, in addition to crime and the level of education and training of the labor force, have historically contributed to low levels or the complete absence of economic growth within the country. Measures that have been implemented to address supply-side constraints include stabilizing the supply chain, diversifying energy sources, strengthening linkages within the economy, developing human capital, improving the overall business climate, and increasing access to financing, particularly for micro, small, and medium-sized businesses.

Jamaica seeks to become the place of choice to live, work, raise families, and do business by 2030. How is Jamaica advancing toward this national vision and what are the main challenges?

Vision 2030 Jamaica – National Development Plan is Jamaica's first long-term national development plan, covering the 21-year period 2009-2030. The plan presents a strategic roadmap for Jamaica to achieve developed country status by 2030 and is currently in its eighth year of implementation. This development will be sustainable and inclusive, engaging all Jamaicans in the plan, design, and implementation processes and providing equitable opportunities to all Jamaicans to benefit from development. Vision 2030 Jamaica is built on a results-based management framework, comprising four goals, 15 national outcomes, and a strategic and operational framework geared toward the achievement of the goals and outcomes. The achievement of the goals and outcomes is embodied in the Vision Statement “Jamaica, the place of choice to live, work, raise families and do business." Our risks and challenges include vulnerabilities to shocks in the global economy and the impact of natural hazards and climate change. Other challenges include delays or reduction in aid flows and donor funds due to Jamaica's upper middle-income developing country classification, as well as delays in the implementation of reforms and projects.

Jamaica is strategically located between the Panama Canal and major international markets. How does it plan to leverage this asset to become a center of trade?

The Logistics Hub Initiative (LHI) Market Analysis and Master Plan completed in December 2017 indicates that at full buildout, the LHI will comprise just over 3,800ha of development across the island, with a total order-of-magnitude cost of over USD28 billion (USD22 billion in industrial investment) and the creation of 87,400 direct jobs. Jamaica must aggressively position itself as a global logistics hub and special economic zone destination by capitalizing on its strategic maritime location and attractive airspace to serve the major trade corridors of globally trading firms. With port and airport expansion and complementary logistics facilities development already underway, Jamaica has a unique opportunity to leverage the physical and performance dimensions of its assets to attract investments into our SEZs, with many export-focused industries having much to gain from the expanded transport connectivity and increased access to markets that large domestic ports and airports can provide. Market access potential for industries is significant as the Latin America and Caribbean region represents a consumer market of approximately 800 million people. The LHI and SEZ strategies leverage the logistics infrastructure and market access arrangements, and motivate several marquee industrial clusters being developed. Among many others, these developments include the JISCO Jamaica Industrial Park (JJIP), an aluminum cluster of over 100 firms, an aviation and aviation-related industrial cluster involving Sangster International Airport, Norman Manley International Airport, the proposed Vernamfield Aerotropolis, and the Caymanas Special Economic Zone, which will serve as a flagship light industry and logistics cluster. Jamaica has a distinct competitive position as a preferred western hemisphere investment location due to its proximity and connectivity to major trade blocs and markets that exist in close proximity of Jamaica. The US and Asia trade route is the main import route for small manufactured items in containers passing on their way to the east coast of the US. These commodities could be intercepted by Jamaica for customization and distribution, as the country has the potential to capture substantial trade that will stimulate a host of activities associated with freight handling, value-added, and light manufacturing activities. The Panama Canal expansion creates opportunities for Jamaica to capture cargo flows along Asian, US, and Latin American routes, especially due to the modest shift of Asia/North America trade from the Suez to the Panama route. The changing size of vessels and deployment of Post-Panamax Generation II (PPX2) of 8-10,000TEUs is being incorporated into the improvement of Jamaica's infrastructure capacity for transshipment services, to enhance the country's ability to effectively compete in the region.

Your government is strongly pushing Jamaican competitiveness and ease to do business. What is your message to the international investor community regarding Jamaica's future in this regard?

The government of Jamaica is committed to reforming its business environment to make it easier for local and foreign investors to do business. It has sought to do this through the creation of a competitiveness framework that seeks to identify challenges to doing business and mobilize the relevant arms of the government to implement reforms that positively impact the investor experience. In 2010, the government of Jamaica established the National Competitiveness Council (NCC) as a public-private partnership body to advance policy advocacy, research, and public awareness of reform initiatives that facilitate the creation of an enabling environment for businesses in Jamaica. Over the last five years, the government of Jamaica, through the NCC, has demonstrated that it is serious about improving the ease of doing business in the country and that it wants to provide a more enabling business climate for both local and international investors. This has been reflected in the upward movement of its ranking in the Doing Business Report from 867 in 2012 to 70 in 2018. Notably, Jamaica currently ranks fifth in starting a business, ahead of countries such as Singapore (sixth) and the US (49th). It also ranks 20th for getting credit and 35th for resolving insolvency. Jamaica is now third in Latin America and the Caribbean for reforms implemented over the past 15 years, with 25 reforms implemented, following Mexico and Colombia. In this year's ranking, Jamaica ranks second after Puerto Rico in the Caribbean, while the country maintained its sixth-place spot in Latin America and the Caribbean, behind countries such as Mexico (49), Peru (58), and Colombia (59). In recent years, some key reforms that have been implemented are the implementation of a single business registration form and agency, the strengthening of the Commercial Court Division, consolidation of labor-related tax payments, mandatory system of e-filing for all major taxes, and the enactment of the ASYCUDA customs system to manage trade across borders, among many others.