Have Your Say
JM | Jul 21, 2021

Richard Pandohie | Jamaica’s economic base needs diversification

/ Our Today

administrator
Outgoing Jamaica Manufacturers and Exporters Association (JMEA) president, Richard Pandohie in this May 2017 photo. (Photo: Facebook @GuardsmanGroup)

Seprod boss Richard Pandohie continues to be a tireless champion of Jamaican manufacturing. He has been the voice of erudition and perspicacity lending gravitas to the discussion of Jamaica’s economic development and the role of the productive sector.

His tenure as President of the Jamaica Manufacturers and Exporters Association (JMEA) is now at an end, with him passing the baton to John Mahfood of Jamaica Teas.

Do read here Richard Pandohie’s leaving address and call to the JMEA to be a voice for all Jamaicans:

The pandemic has changed our world, changed our individual perspective on life and it has certainly reset our value system. 

From a Jamaica Manufacturers and Exporters Association (JMEA) perspective, navigating COVID-19 has been one of our toughest challenges and in the same breath it is shaping up to one of our greatest teachers, forcing us to adapt to new norms and reimagining the way we engage our workforce, customers, consumers, and business partners.

The last year has seen the productive sector combat unparalleled supply chain upheaval, rising cost, significant loss in business due to disruption in the hospitality and tourism sectors and operational restrictions due to national COVID-19 measures; all of which considerably affected the cash flow of many businesses.  This is supported by JMEA impact surveys conducted from March 2020 through to December 2020 which concluded that approximately 62 per cent of our members experienced negative financial impacts and, 49 per cent experienced supply chain disruptions. Nonetheless, the productive sector stood firm, keeping most of the people in our sector employed and keeping Jamaicans supplied with key products thus preventing wholescale panic hoarding that we witnessed in many countries.

Despite the Jamaican economy recording a significant decline of 9.9 per cent after seven years of consecutive growth; with Services declining 11.8 per cent and the Goods Producing Industry declining 4.5 per cent, I believe that as a Nation we have collectively done a tremendous job to ride through the pandemic so far.  The Government on the back of strong fiscal discipline in prior years had a cushion to buffer the shock. I must also commend the Government for allowing the JMEA and other stakeholders a seat at the table to contribute to key discussions.

The headquarters of Jamaica’s Parliament, Gordon House in downtown Kingston. (Photo: Twitter @PressSecOPMJA)

Whilst there is an alarming misconception that “COVID done”, we are far from returning to normalcy, in fact, our risk level is uncomfortably high, and this must be dealt with decisively with the swift dissemination of the vaccines that are anticipated to arrive in large quantities shortly. However, while we focus on protecting the lives of our people, we must simultaneously begin the shift to economic recovery and adapting to the reality that COVID is not going away in a hurry.

To date, we have been grappling with economic survival and have failed in any meaningful way to grasp the opportunity to diversify the economic base to create the possibility of more resilient, sustainable, and inclusive growth. It would be an absolute shame if we went through this awful period to simply go back to being a “two trick pony” economy. So many myths have been shattered and surely, we can see and plan more clearly now.   

Whilst the JMEA has advocated stridently for its members, we have never lost sight that we must be a voice for all Jamaicans. Too many of our brothers and sisters are suffering, too many are impoverished, including so many in the workforce who are on a treadmill of existence but not improvement. The pandemic has highlighted and widened the inequity in society, showing that we are all in the same storm but not in the same boat. This is not good enough and needs to change.

(Photo: Inter-American Development Bank)

During 2020/2021, the JMEA made some important advocacy to support and propel the economic recovery, especially on measures that will positively impact the SMEs which will have to be the engine of a robust economic recovery. Some of our more notable contributions have been:

  • Successfully advocating for the continued operations of our manufacturers and exporters during the onset of the crisis. We were successful in advocating for updates to the Disaster Risk Management Act (DRMA), which allowed for members to continue their operations outside of curfew hours; how important was this? Just look at how Trinidad operated differently and the impact that has had on their manufacturers.
  • Not only did we successfully work with the GOJ to allow several local manufacturers to expand their business to produce sanitisers, but the local producers did it so well that the GOJ was able to reinstate import duties on hand sanitisers. 
  • Worked with the BOJ to allow their flash auctions to prioritize manufacturers.
  • Worked with the Port Authority of Jamaica (PAJ), Jamaica Customs and Kingston Freeport Terminal (KFTL) to streamline policies to reduce logistic challenges for import and export of containers.
  • Advocated relentlessly for Jamaica to become a signatory to the Madrid Protocol. After almost a decade of battle, the protocol has been approved by both the Upper and Lower House of Parliament, and within this year, Jamaica will officially become a signatory. This will be a game-changer for local brand owners.   
  • Passing of the National Five-Year Manufacturing Growth Strategy by Parliament. This was developed by the JMEA, JAMPRO and Ministry of Industry, Investment and Commerce (MIIC) as a strategy document for boosting the contribution of the manufacturing sector to the national economy.
  • Advocacy that led to a review of Jamaica Agricultural Commodities Regulatory Authority (JACRA) fees, resulting in a 50% reduction of primary production and export fees.  
  • Advocacy that led to the Government abolishing the Customs Administrative Fee (CAF) for exports of a value less than or equal to US$500. A move that has already had a very positive impact on micro and small enterprises that have seen significant business transactions on e-commerce platforms.

Indeed, while I am very proud of our representation, the reality is that the productive sector needs to play a much bigger role if Jamaica is to have a sharp and inclusive recovery. But this will not be achieved by wishful thinking and veranda talk, I am recommending a few things to consider:

  1. Research and Development (R&D) incentives especially for projects that utilize local input sources. We need to evolve from celebrating the production and export of primary products to being value-added producers. More than 30 per cent of agricultural output is lost due to inadequate post-harvest technology and the absence of value-added processing.  
  2. Accelerating S.T.E.M institutions. We have a deficit of technical skillsets, and this is one of the contributors to Jamaica’s abysmal productivity record.
  3. Utilizing Jamaica’s logistic advantage to attract nearshore, low complexity manufacturing in Special Economic Zones (SEZs). The current global supply chain mess presents a massive opportunity for Jamaica.
  4. It is a nasty, ugly stain on our nation that we continue to tolerate the level of violent crime being perpetrated on our people year after year. This is not simple crime, it is domestic terrorism, which has been estimated to cost us five-seven per cent of our GDP annually. It is robbing us of our basic human right, production, productivity, forcing our best-trained people to migrate and costing businesses and normal citizens significantly to protect their assets. While COVID is a global pandemic, CRIME has been a devastating epidemic, supported by a conspiracy of silence by those who can do and fear by those who cannot do. 
  5. Our educational system is failing, and the pandemic has accelerated the rate of failure, we need to fix this like yesterday, otherwise Jamaicans will increasingly become employed only at the lowest end of the value chain. The Jamaican middle class is like a bikini at carnival, barely there, this spells disaster for any country that aspires for real economic growth.
  6. The Private Sector needs to work collaboratively with the GOJ, too often it feels like we are adversaries, and this must change. We can agree to disagree on some things but at the end of the day, our common goal of advancing Jamaica must override our individual differences.
  7. Any Government resource (primarily land) that is leased to anyone should be reclaimed if same is not being put to productive use within a particular period. One can drive for miles upon miles in this country and all you can see is bush, yet we have so much unfulfilled export potential, so much food insecurity and nearly US$1 Billion in food import annually.
Richard Pandohie, CEO of the Seprod Group of Companies.

The above list is not exhaustive but let us pick a few things and execute well.

Special thanks to the JMEA Board of Directors and the staff of the Secretariat for their tireless work and sacrifice which have played a significant role in the wins we have gained for the membership and the wider productive sector. I also want to thank the Government, especially the Office of The Prime Minister (OPM), Minister Johnson-Smith and her team at the Ministry of Foreign Affairs, Minister Shaw and Minister Dunn and their support team at the Ministry of Industry, Investment and Commerce. I also must acknowledge Anthony Hylton, Leader of Opposition Business. To my friends at JAMPRO, EXIM Bank and the DBJ, thank you for all the collaborations. Big thanks to the media for your support and for allowing us a platform to make our voice heard and last but certainly not least, I want to thank the Jamaican people; you inspire me every day to strive to contribute to making our country a paradise for all of us.

It has been my greatest honour and privilege to have been given the opportunity to serve as President of the JMEA, I am confident that the incoming leader and his team will take the baton and run a blistering leg.

Comments

What To Read Next