Hill urges local businesses to take action to reverse 61-year trade deficit
Published:Saturday | November 16, 2024 | 12:08 AMKimone Francis/Senior Staff Reporter
Minister of Industry, Investment, and Commerce, Senator Aubyn Hill, says local businesses must create new products and find new markets overseas if Jamaica is to reverse its 61-year-old trade deficit.
Hill, who was making his State of the Nation presentation in the Senate on Friday, said the last time Jamaica recorded a positive trade balance was in 1966, calling the long negative record untenable.
He also noted that the trade balance continues to widen as the country imports much more than it exports. In 2023, Jamaica’s trade deficit amounted to approximately US$5.7 billion, compared to US$5.8 billion in 2022 and US$4.4 billion in 2021, in terms of the gap between the values of what the country imports and exports.
“With just under three million people with a relatively low per capita GDP of only US$7,000, we will not become a very wealthy country selling to only this relatively small population,” said Hill.
“We must create new products and services to sell in rich markets and buyers overseas. We have to make sure that we understand that export is an important part of our becoming a rich country,” he added.
Hill told his colleague legislators that as the country’s business minister, he has been leading the charge, travelling extensively to source and secure new markets for local products.
He stressed that tapping new markets cannot be done locally.
“Business people and government officials must go and look and find markets if we’re going to get out of this place where we have a per capita GDP of only US$7,000,” Hill said.
Supply problem
He said the demand for Jamaica’s orchard crops, which include ackee, avocado, mango, and breadfruit, is large but unmet in the diaspora.
He said it therefore means that there is a supply problem.
“We must therefore find investors locally, regionally and internationally to develop farms that very likely might follow a model farm concept where a big farm sets up an agro-processing facility to which many small farmers will sell the required farm produce,” Hill said.
He said other growth areas include transforming Jamaica into a logistics hub, noting that while focusing on special economic zones, “import sums of money” will have to be spent on infrastructure to de-risk the first special economic zone to entice logistic hub investors.
Further, Hill said increasing the country’s financial services products, such as segregated accounts and general and limited partnerships, will attract high-level clients to Jamaica.
He pointed to the Jamaica International Financial Services Authority legislation amended two weeks ago to achieve this, noting Jamaicans in the diaspora that this move will attract.
“Once we change that law here and put in the legal and physical infrastructure as necessary, we will have that service here. We have three million people here. We’re never going to be a manufacturing powerhouse like China or even Colombia with 50 million people or Mexico with 120 million people,” the senator stated.
“So it has to be brainpower that we use and that means that we have to go down the road of making sure that when you have brainpower, you have services for them to supply.”
The minister stressed that Jamaica must expand its knowledge processing outsourcing business to move up the value chain.