Our competitive advantage

Ronald Mason, Contributor

To use a phrase that has now gained more popularity, 'divine intervention' has led to Jamaica being an island state in this geographic location. This has resulted in our development of a tourism industry, with sand, sun and sea. However, in 2013, we have a new exciting opportunity. The maritime industry is in the midst of transformation.

The Panama Canal, a man-made engineering feat which is a wonder of the modern world, is 48 miles long. It currently handles some 14,000 ships annually with 200 million tons. This is some five per cent of world trade. To emphasise the value of this facility, consider that a voyage by sea from California to New York would be 14,000 miles without the canal. Going through the canal makes the journey 6,000 miles. A significant cost saving is to be had in fuel cost, time and logistics efficiency.

The canal is currently being expanded. This is planned for completion in April 2015. By then, it will be able to handle ships referred to as Post-Panamax vessels. These are 1,200 feet long, 160 feet wide and can carry as many as 13,200 containers at a draft of 50 feet. These vessels will use 16 per cent less fuel. One ship can move twice the amount of cargo at lower price.

MOVING FORWARD

How can Jamaica benefit economically from this? The world's manufacturing capacity is generally found in the Asia Pacific region of the world. The major consuming nations of the world are to be found in North and South America. Jamaica can serve a market area of 800 million persons. We have the seventh best natural harbour in the world. With dredging, we can, with port engineering modification, accommodate ships with draft up to 50 feet.

As an aside, why is it taking so long to dredge the Kingston Harbour? This dredging will only start in the third quarter of 2013, to be completed in December 2014. The Panama Canal expansion will be completed in April 2015.

We have not yet had a definitive statement on the prevailing philosophy of the Ministry of Industry, Investment and Commerce (MIIC) as the preferred option to facilitate our method of participation in these opportunities. The competing methods are advanced by Michael Porter of the Institute of Strategy and Competition of Harvard Business School. He advances that government should play a purely facilitatory role. Set the parameters, promulgate the legislation and regulations, and keep your hands off.

The competing method is advanced by Dr Densil Williams, author of Competition of Small Nations. He is credited with arguing that governments need to play a pivotal role in small developing nations.

The MIIC needs to make a definitive comment to the choice. The point of view supporting government as facilitator has a lot to recommend it. Government does not have the technical competence, experience or risk aversion to inspire the country that this venture would be successful. In addition, this initial cost estimate for the logistics hub is approximately US$8 billion. Allow this structure to encourage among Jamaicans at home and in the diaspora equity participation.

The necessity to have the Caymanas Economic Zone ready for April 2015 should be recognised upon industry what the logistics hub requires. There has to be space for breaking bulk, finishing assembly, and adding manuals in the appropriate language for the ultimate consumer. The zone must be set up to operate 24 hours per day, seven days a week. This is necessary to facilitate the most efficient turnaround. Have our laws regarding flexiwork been fully adjusted? Do we have an understanding with the unions as to what frequent labour interruptions will do? This is only a shortlist of concerns.

Mr Minister, when will the infrastructure work begin on the Caymanas Economic Zone?

BRINGING US IN THE LOOP

The multimodal linkages for the successful creation of this new industry are partially available: the Norman Manley International Airport, the railroad tracks and spaces at Vernamfield in Clarendon. We will be required to move cargo from the port to the economic zone and the air cargo facilities. Given the volume we expect, rail is the most feasible. Vernamfield needs to be developed as major cargo trans-shipment facility. These things do not happen overnight or without detailed engineering, planning and support services. Mr Minister, when will the plans for this aspect be made public with a timetable?

Mr Minister, when will we the people be brought into the loop? There is a lot which has not been shared with us.

There is talk about approaching Dubai, et al, yet they have not said how our people are to be trained to the internationally accepted standards. They seek J$50 million in the Budget for the logistics hub. How is this to be spent? Will the financing provide an opportunity for the PEOPLE of Jamaica to participate directly in ownership? Mr Minister, is the dry dock planned for Jackson Bay, Clarendon, to be the private property of the good doctor?

It is when the nation faces severe economic challenges that leadership is best exhibited. We need to be brought in on the plans, implementation and expected economic benefits of our divinely given competitive advantages. Alas, the ministry is not as communicative as it should be. Jamaica waits.

Ronald Mason is an attorney-at-law and mediator. Email feedback to columns@gleanerjm.com and nationsagenda@gmail.com