One hand just does not clap

Deika Morrison, Contributor

According to the Planning Institute of Jamaica (PIOJ), between October 2008 and April 2010 some 86,000 jobs were lost in the private sector. By itself, that is an astounding number. Just think. All the unemployed people are no longer income earners. Hence, all the goods and services that depend on patronage have either less frequent purchases from the same buyers, or fewer buyers altogether. Of course, there are fewer PAYE taxpayers and so the Government needs to look for additional sources of revenue - usually from those who already pay taxes. Just not good for anyone, which makes job preservation and job creation everybody's concern.

Consider this, though. Suppose all of those jobs were lost in only one sector. And for argument's sake, suppose that sector was the manufacturing sector. What would be the impact? To start with, the entire manufacturing sector would have been wiped out. That's right. As at April 2010 the PIOJ notes that some 76,000 people were em-ployed in the local manufac-turing sector - fewer than the 86,600 jobs that have been lost since October 2008. Astounding!

But what would we have lost as a society and, indeed, the world, without our manufacturing sector?

Suppose we could no longer have coffee, rum, syrup, patties, banana chips, bread, bun and water crackers, for example? As Jamaicans, we would miss some of our favou-rites. So would the world, since there would be nothing to ex-port. More im-portant, we would have to import all our food and beverages. While globalisation brings choice, variety and price competition - which are all welcome - there is no country in the world that depends solely on imports for these staples of life. Moreover, we live on an island and in the event of an emergency essentials cannot be physically driven across a border or over a bridge.

It's not just about the individuals because the manufacturing sector provides goods for other sectors. Yes, coffee does keep the service professionals on Knutsford Boulevard going. But we are talking about goods for others to develop their businesses or outright sell to make a living and employ other people. Think of retailers, real-estate developers, decorators and others.

One critical example is the tourism industry. This critical driver of economic growth does utilise goods from every sub-sector of manufacturing. For example, other than select food and beverages, hotelier Christopher Issa proudly notes that Spanish Court Hotel itself is infused with a range of locally made items - all the furniture, all the doors, bedding, etc. Not only are quality products available, quality products with a distinctive and unique appeal are available - and that is what competitive advantage is all about. And no, the tourism industry does not buy 100 per cent local, nor should it. We live in an open economy with choice and they cater to foreigners who seek experiences that are new, but also familiar and cosmopolitan. Remember that it is those very foreigners who buy local because that is, after all, what tourists do.

Manufacturing sector necessary

Our economy is an interdependent system. Manufacturing provides us and businesses with goods to support individual lifestyles and livelihoods. Equally, the growth of every other sector provides markets for locally made goods. Contraction in one affects the others. Growth in one supports the others.

According the JMA President Omar Azan, "If we are to solve some of our socio-economic problems and enhance competi-tiveness, we need an integrated approach. Strengthening the linkages between manufacturing, agriculture and tourism is key to creating jobs, reducing our trade imbalance, earning foreign exchange, increasing exports and creating a prosperous Jamaica for all."

So back to those employment numbers. In the same October 2008 to April 2010 period, 5,100 of those 86,600 jobs lost were from the manufacturing sector. In no way was this the largest loss for any sector, but in the period before, between April 2004 and October 2008, the economy recorded employment growth in every sector except one - manufacturing, which lost 5,000 jobs. It is in our collective interest to work together to reverse this trend.

deika@jamaicacatalogue.com

Deika Morrison is managing director of Mdk Advisory & Consulting Ltd. She is also compiling a catalogue of products made in Jamaica and support services. jamaicacatalogue.com.

 By the numbers

The sector contributed 8.3 per cent to GDP and real value added declined by 5.0 per cent due to reduced local and international demand for products as a result of the economic crisis.

The production in all manufacturing categories declined: Food, Beverage and Tobacco by 3.9 per cent and Other Manufacturing components by 6.3 per cent.

For the period, total manufactured exports amounted to US$722.9 million, a decrease of 40.4 per cent. This reflected a decline in earnings from Non-traditional and Traditional Exports of US$599.3 million and US$123.6 million, respectively.

Total employment also reduced in 2009 to 77,700 persons.

Source JMAAnnual Report 2009