Sun | May 31, 2020

Jamaica may have to cede economic sovereignty for logistics hub

Published:Sunday | January 27, 2019 | 12:18 AM

British High Commissioner Asif Ahmad.
British High Commissioner Asif Ahmad.

Jamaica has to decide whether it is ready to cede control of sovereign assets to outside investors to achieve its ambition of becoming a global logistics hub, in the example of Singapore and Dubai, says British High Commissioner to Jamaica Asif Ahmad.

Jamaica wants to position itself to join Rotterdam, Dubai and Singapore as the fourth node in the international logistics chain – a project that it has been talking about for several years and across political administrations.

“Some conversations I have had here lead me to believe that there is ambition for Jamaica to become a mega-logistics hub,” said Ahmad. “These are visions of a Dubai or Singapore in the Caribbean. Is it possible? Can it be done? It would be easy for me to flatter everyone and say, of course,” he said.

However, Ahmad said Jamaica, unlike Dubai, does not have a royal cousin with deep oil pockets, while Singapore has deliberately expanded its land mass and has been open to migration.

He said Singapore has also invested in facilities that expatriates need for their families and work. In addition, it has an open attitude towards globalisation and has no protection policies for inefficient businesses.

“For Jamaica to follow the example of Singapore, it has to accept the notion that anyone can own the mega-logistics hub,” said Ahmad, while addressing the 14th regional investments and capital markets conference of the Jamaica Stock Exchange last Thursday. The conference ran from January 22-24.

“I do not think any company listed on the Jamaica Stock Exchange would want to take on the business risk on its own of building a mega hub in the hope of being successful,” he said.

The high commissioner said that in Britain, “our ports are operated by owners from Dubai, Hong Kong and beyond. Our flagship airports are owned by international consortia. Is Jamaica ready to cede this level of business sovereignty? This is not a question that I can answer. It is for Jamaicans to decide.”

Ports in the United Kingdom are operated by owners from Dubai, Hong Kong and beyond, said the diplomat.


“Our flagship airports are owned by international consortia. Is Jamaica ready to cede this level of business sovereignty? This is not a question that I can answer. It is for Jamaicans to decide,” he said. “Where we are more cautious is ceding economic territory and sovereignty to foreign governments and state-owned corporations.”

Jamaica, too, has taken on foreign partners to manage key assets, including its largest cargo port, its largest international airport, and soon its second-largest airport. These deals have been done under concession agreements under which the assets will revert to the ownership of the Jamaican government after several decades.

Ahmad suggested that Jamaica should first focus on building its logistics capability for its own needs. “A change step in agriculture and the associated food industry will made investment in logistics viable,” he said.

However, he questioned whether a new airport at Vernamfield, Clarendon, which has long being slated to be developed to provide international air cargo and logistics services, can work, noting that air cargo currently is mainly hubbed out of the United States to the Caribbean.

“I do not think it is realistic to think that can be dislodged easily by Jamaica,” he said. “I believe that more intensive passenger traffic with new routes and airline links will offer more potential for a regional cargo business to follow,” the high commissioner said.

He also took a swipe at Jamaica’s import duties saying that they need to be set at a range where they are not a deterrent to trade, noting that levies on automobiles, for example, distort the market altogether.

Ahmad also urged Jamaica to strengthen its manufacturing base and grow its exports, saying that an ever increasing number of containers come into the ports, but not nearly enough leave the country with Jamaican goods.

“Instead, containers are lying idle or are turning into pop up stores, bars and homes,” said the high commissioner.

Ahmad acknowledged that energy costs are a constraint on manufacturing, but said more investment in renewable energy should help. He welcomed the shift to liquefied natural gas, but said more can be done on solar power.

He also said the Jamaican government needs to look more urgently at the very real opportunity to convert waste to energy.

“Years have been wasted while the dump sites pile up and are set on fire,” said Ahmad, apparently referring to the frequent fires at the Riverton City dump in Kingston, in particular. “I find it difficult to understand why no action has been taken,” he said.