LETTER to the editor: Massive drive to expand factory space
Published:Sunday | February 20, 2011 | 12:00 AM
THE EDITOR, Sir:
It is incumbent on me to respond to articles relating to the Factories Corporation of Jamaica (FCJ), especially when they convey such misleading information which has been the focus of your contributor, Claude Clarke's column, titled 'Development is about people' (Sunday, February 14, 2011). This column, unfortunately, was grossly inaccurate. I would have thought that a gentleman of Mr Clarke's competence and experience would simply have contacted FCJ's office to request and receive an update on our pursuit in the islandwide usage of factory space at FCJ.
Given that FCJ is a public-sector entity in a highly modernised environment, one considers it appropriate for any interested party to find it necessary to surf the Web for this information. They could also communicate principally with the relevant department at the office. Simply obtaining information from the FCJ's last annual report, which has been tabled in Parliament by the minister, is also a possibility.
On the basis of general information for Mr Clarke, FCJ manages 1.7 million square feet of space, which was generated more than 30 years ago. The fundamental reasons which have caused the paradigm shift from manufacturing to the high-tech information technology model are well known to everyone. Suffice it to say, it has nothing to do with any inappropriate economic measures, or otherwise, which placed us on the grid with a failing grade.
Driving away investors
The disincentive to manufacturing then was occasioned by high rates of interest, ranging up to 45 per cent, against the background of single digit in other jurisdictions; the high crime rate, forcing investors to look outside our borders; and high energy costs, which presented unfavourable returns in economic production. I suspect it would have been well known to Mr Clarke that the global financial meltdown over the years 2007-2010, and flood damage stemming from natural disasters, were also critical factors which militated against manufacturing in this country.
The Chinese economic reach, spreading its tentacles far and wide as a global manufacturing giant, signal-ling its re-emergence in the economic international sphere, was another inescapable factor which played a pivotal role in ensuring that developing states, as well as the rich North, had to take stock of their own presence with this new kid on the world stage. With this global threat in mind, the time frame for reconstructing, retooling, and rebuilding of the economy has to be taken not only speedily, but thoughtfully. We now have to open a higher gate, while avoiding what may be described as an unnecessary flow, for instance, of unused chocolate outputs resulting from negative approaches in the free-market economy of the developing world. Stemming from this high-gate flow, there have been high interest rates; insufficient support from government agencies and the private sector; and painstaking, red tape slapping duty-free items for manufacture.
Mr Clarke has compared Trinidad's 59 per cent employment rate with that of Jamaica's 41 per cent. Yet, he has somehow not remembered that Trinidad's population, at around 1.2 million, is less than half ours at three million, alongside the fact that it also has cheap sources of energy, beginning with oil. On this basis, in my view, Trinidad and Tobago should boast a 95 per cent employment rate compared to our paltry 41 per cent, as against their 59 per cent.
I dare say that if CARICOM was in its full glory, all manufacturing in the region should have been in Trinidad and its nearby neighbour, Venezuela. Trinidad's 1.2 million, as against Jamaica's approximately three million, augurs well in our employment ratios. That begs the question as to which individual company or entrepreneur wanted to invest in manufacturing when their capital could find safe haven in earning 25 per cent on fixed deposit, which is way above successes which manufacturing offers.
Indeed, we have quelled the appetite for the usual simple paper trail for higher returns. We are in the business of practical engagement for the material success of our economy, which was once considered failing. It has now been the re-energising of manufacturing, and investment growth and outputs for small to medium-size business development. We are now slated to create 100,000 square feet in Naggo Head and 100,000 in the Montego Bay Free Zone. We are retrofitting factory space to be more amenable to achievements to cope with the positives to be accrued from the modern technology mode. In addition, we are vigorously and earnestly pursuing development of
Shifting gears
The economic gear has been shifting speedily from manufacturing to the IT mode of economic outputs. We have received great interest at that level and we are confident of reaping success. I wish to invite those who want to be critical of these positive efforts to be objective in their critique while focusing on the merits of the tremendous task to pursue public policies and styles for our nation's economic growth, development, and advancement.
I wish to further inform Mr Clarke that there is now an economic space which has seen exemplary changes such as reduction in crime, lowering of interest rates, a stabilised dollar, low energy costs, and the curtailment of red tape once regarded as stifling successful business development. It is hoped that he will now join the happy throng and hail the dawn of a new day, with a pearly economic high-gate opening much wider for us to enjoy everything, including a verdant economy with a much tastier milky chocolate bar.
I am, etc.,
NEWLYN 'Neil' SEATON
Chairman, FCJ