Economic growth and jobs: How USAID helps

Jamaica and the USA are inextricably linked through trade, tourism and, of course, geographic proximity. For almost 50 years, the United States Agency for International Development (USAID), has provided approximately US$2 billion in loans and grants - of which the last 20 years have been grants only. But USAID assistance is not charity, it is an investment. As such, USAID has been a long-standing supporter of economic growth and job creation.

Defining actionable priorities

In 2008, Dr Karen Hilliard, mission director for USAID in Jamaica, faced a smaller budget and staff than her predecessors. However, determined to do more with less, she led her team through a highly focused process of extensive consultations islandwide with national stake-holders in the development of the 'Country Assistance Strategy'. Every project was evaluated. Recommendations were solicited and considered. And discussions were held with the prime minister, the Cabinet, technocrats, civil society, faith-based organisations and business associations. The objective? To find out: What are the three most pressing problems in Jamaica? Can USAID assist? If so, how?

Stakeholders told Hilliard that their priorities, in order of importance, were: 1) the achievement of peace and security; 2) the need to provide economic opportunities, especially as an alternative to crime; and 3) the need to strengthen education and training, especially for the illiterate and enumerate to facilitate access to job opportunities. All are related to economic growth, even crime control, as the World Bank recently estimated the direct cost of crime and violence as five per cent of gross domestic product (GDP), and that small and medium-size enterprises spend approximately 17 per cent of income on crime-prevention measures.

In order to qualify for funding, a country's priorities have to match Washington's priorities. USAID received specific requests that matched and are providing assistance accordingly to 1) streamlining business/reduce bureaucracy and 2) boosting agriculture.

Indirect assistance - Streamlining business/reduce bureaucracy

USAID's indirect assistance to economic growth and job creation include initiatives to:

Reduce the development-approval process. It is reported that 90 per cent or more have been approved in 90 days or less;

Simplify procedures for import (of raw materials) and export (of finished products) to increase the competitiveness of Jamaican products; and

Simplify the payment of taxes. USAID is hopeful that with addi-tional assistance of all the multilate-rals, significant progress can be realised in the next two years that will create tangible benefits for individuals, companies and the Government of Jamaica.

Other critical initiatives to make doing business easier include improving the regulatory environment for microfinance, and various initiatives to create an employable workforce such as the revival of the Jamaica Chamber of Commerce (JCC) Junior Achievement Programme and other programmes to help youth to attain life skills, working with the development entrepreneurs and the disabled community.

Direct assistance - Boosting agriculture

A significant portion of Jamaica's GDP is attributable to agriculture, as is one fifth of the workforce. Last year, agriculture grew 26 per cent despite storm and drought. Confident that agribusiness is a viable vehicle for job creation and economic growth, USAID has made this national priority its flagship project with a commitment of US$14 million over five years to:

Help the Ministry of Agriculture to create market-information systems to access real-time information about prices. USAID already helped developed MIS system.

Provide small grants for NGOs and others under the Development Grants Programme so that people can start to earn a living. Current projects include hydroponics in the inner-city, aquaculture, strengthening the Jamaica Cocoa Farmers Association and a number of other microenterprises:

increase production of high- value food crops and other commodities. These include items such as onions, Scotch bonnet peppers, ginger and sorrel - all informed by the JAMPRO export strategy that identified competitive advantages. Indeed, the entire cocoa industry has immense potential, as Jamaica is one of the eight countries in the world to produce fine or flavoured cocoa. USAID is assisting with the creation and implementation of incentives for farmers, licensing for production and exporters of cocoa, valuation of assets for divestment and fostering linkages with US companies for product development and markets.

Is USAID still funding projects? Yes, but USAID is looking for practical, viable reforms and creative ideas, especially as it relates to the younger generation. Hilliard is very concerned that the most productive demographic shows the highest rate of unemployment. Yet, Hilliard remains "very optimistic" about Jamaica. It is Hilliard's vision that Jamaica will "create economic opportunities through private sector led growth" and that through a multifaceted approach of policy and administration improvements, the Government should create an enabling environment, provide incentives to do business and increase production, encourage linkages and support targeted areas with a competitive advantage.

Deika Morrision is managing director of Mdk Advisory and Consulting Limited. Email deika@jamaicacatalogue.com.