Diversification listed as a main priority

Durrant Pate/Contributor

The Planning Institute of Jamaica (PIOJ) has articulated a number of imperatives for Jamaica’s continued recovery, with diversification of the local economy being top of the list.

Appearing before Parliament’s Public Administration and Appropriations Committee (PAAC) on October 26, a PIOJ team led by its director general, Dr Wayne Henry, gave the institute’s assessment of the policy actions needed to avoid or limit the impact of global disruptions on the local economic, while highlighting that the economic reforms undertaken over the past 10 years, underpinned by fiscal consolidation, have assisted Jamaica in withstanding the economic disruptions of the past three years.

These measures, Henry told the PAAC, have placed Jamaica in a better position to recover from the current global disruptions.

However, the country’s primary economy planning and development agency underscored that, “the recent economic disruptions have underscored the importance of diversifying products and customer base.”

According to Henry, “the more diversified the economy is, the less of an impact a downturn in a product or service (e.g. Tourism) will have on its overall performance. Moving up the value chain by investing in Research & Development and Brand Jamaica in different regions have become increasingly important in the new global context”.

Education and Training

To achieve more inclusive growth and a diversified economy, Henry pointed to the need for education and training to be given priority attention pointing to the imperative reskilling Jamaica’s labour force. This reskilling encompasses learning new skills to transition into a new role) and upskilled new skills to become better at current role.

Said Henry: “This makes it easier for workers to move/transition from one job to another when there is a disruption in one area.  Addressing the gaps in the Science, Technology, Engineering, Arts, and Mathematics (STEAM) education portfolio throughout the education and training system remains essential in meeting the opportunities and countering the challenges associated with the 4th Industrial revolution.”

Another area of necessity, the PAAC was told about is access to finance, which Henry articulated remains one of the critical steps needed for firms, especially micro, small and medium size enterprises to grow and diversify their production and customer base.

The point was made that more needs to be done to expand and promote the lending technologies that are available and applicable to MSMEs. These include lending based on factoring (i.e. using unpaid customer invoices as collateral for a loan), asset-based lending, small business credit scoring, fixed asset lending, leasing, etc.

Infrastructure needs critical attention

The final area of focus highlighted by Henry was in the area of infrastructure, which he said remains one of the key ingredients in improving access and productivity and will be very important as Jamaica’s diversifies its production base.

Henry reported that, while these assets remain vulnerable, given Jamaica’s location in a hurricane belt, it is essential that nature-based solutions or traditional “hard or grey” solutions (e.g. concrete and steel) are utilised in areas that are highly vulnerable and are important for social and economic activities.

One of the projects Henry said was working in this regard, with local and international partners, is the development of a systematic risk assessment tool to identify location of vulnerability within Jamaica’s infrastructure networks (transport, energy and water) and to estimate the economic impact of physical climate risks.

This, is in addition to facilitating the evaluation and prioritisation of investment options to enhance infrastructure resilience, which will form the starting point of developing project concepts to address these vulnerable areas.