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Rekindling Lightbourne's dream (Part I)
Published: Sunday | April 5, 2009
Claude Clarke, Contributor
I was thrilled to have met Robert Lightbourne while campaigning for the general elections of 1989. Always articulate and urbane, though in his waning years, he was still debonair and dynamic. But what most impressed me in every contact I had with him was his irrepressible passion for the industrialisation of Jamaica.
Although I was already committed to the idea of an industrialised Jamaica - in fact, it was my only reason for entering politics - I was further infected by Lightbourne's enthusiasm. He flattered me by expressing the belief that I might be able to play a role in advancing this goal if the PNP were elected in the upcoming elections, and even made an audio tape endorsing my candidacy. I never used the tape in my campaign but occasionally listened to it, especially at the times of my greatest frustrations in government.
Among those moments was my first realisation, after the swearing in of the new Cabinet in 1989, that in the assignment of portfolios all the key agencies which would have to be involved in industrial development had been removed from the Ministry of Industry and Commerce to which I was assigned.
What made this significant for me was the fact that in the run-up to the elections I had invested more time and mental energy to developing policy ideas and strategies for Jamaica's industrial development than I had committed to campaigning for my own parliamentary seat. Buoyed by Light-bourne's encouragement, I had built up a high degree of anticipation for the challenge of driving the effort towards industrialisation, and the realisation that the opportunity would not materialise was the greatest disappointment of my short political life. It is that which made it so easy for me to depart active politics prematurely.
The Ministry of Industry and Commerce was stripped of every important tool which would have been needed to effect or even to affect industrial development in the country. It is little wonder that in noticing the greatly diminished responsibility and budget of the ministry for which he was once responsible, former Minister of Industry and Commerce Douglas Vaz was moved to describe it as the "Ministry of 'Cheap Talk'." Douglas was right.
Since then, monetary, fiscal and trade policies have emerged from government as if guided by a mission to reverse Jamaica's development.
Our industrialisation had been long in the making. It began in the 1940s as an early priority of our suffrage. It continued through the 1950s but really gained impetus under Light-bourne's leadership in the 1960s. Although the perceived focus on cheap labour in the 1980s was not popular, industrialisation was advanced during that decade, and the country was brought to such a relatively high level of industrial competitiveness that it attracted retaliatory pro-tective action within CARICOM.
The 1990s saw a dramatic reversal of this process of industrialisation. More than half of our manufacturing jobs disappeared during the period. Even the 1970s, widely seen as the period of greatest economic decline, did not see the reversal of industrialisation experienced in the 1990s and 2000s. The contribution of the goods-producing sector to GDP fell eight percentage points to 37 per cent during the 1970s. It recovered in the 1980s, getting back to 44 per cent by 1991. But it fell again during the 1990s and reached 30 per cent by 2001, and further declined to 28 per cent in 2007. What is clear is that the periods of low goods production were accompanied by economic decline and, conversely, the years of high goods production showed strong economic growth.
The promoters of the policies which reversed our industrialisation seem not to have recognised what centuries of human civilisation have established: that no economy, except for the smallest of micro states, has achieved economic development without industrialisation. Industrial-isation is not simply a matter of manufacturing.
It is a state of technology-based economic and social organisation which fosters, and is facilitated by, manufacturing. It enables an economy to embrace and absorb modern methods of production in all areas, whether it is in agriculture, manufacturing or services. It moves a country's economic engine to convert crude materials and other primary assets, including labour, to more economically useful goods and services which provide higher levels of consumer value, satisfaction and convenience.
Agriculture has been heralded by many opinion leaders as essential to our economic well-being, and especially our food security. There is no doubting the importance of agriculture to rural communities, but to attempt to achieve food sufficiency, producing all the food we consume, is not prudent policy in today's globalised world.
The concept of food sufficiency lost its relevance with the ending of the cold war and the polarised geopolitical environment it engendered; and today the surest way of achieving food security is through economic prosperity. That is why more food is available to the people of Cayman, with no land on which to grow it, than can be had by the citizens of Guyana, with its vast expanses of land. Above all, the idea of food sufficiency is highly wasteful of capital. That is because it very often leads to the production of food, even when the production process consumes more capital than the value it creates.
In Jamaica, agriculture contributes five per cent of GDP and uses over 17 per cent of our employed workforce. The average agricultural worker can, therefore, earn little more than a quarter of the income of the average worker in the rest of the economy. This is because many of our farmers are still tied to technology we should have left behind with slavery. Only industrialisation can change this and increase the productivity of agriculture to enable our farmers to break out of the cycle of poverty in which they have been trapped for generations.
Services contribute most to our GDP (62 per cent in 2007). This fact has been interpreted by some economic analysts to mean Jamaica is now a services economy. However, because the earnings of this sector, except for tourism, are almost entirely domestically derived, its real value can only be revealed through the vitality of the other sectors of the economy.
In that regard, the services sector, excepting that which is exported or directly consumed, is a cost centre and not a profit centre of the economy, and its significant showing in the GDP is essentially the result of the high prices charged to consumers and producers within the economy, who are held captive by the absence of external competition.
Vital industry
Tourism is a vital export service industry which contributes much to our economy. However, the extent to which it is able to add value to the economy is substantially determined by the degree to which the economy as a whole is industrialised. An industrialised, and hence competitive, economy would allow the tourism sector to incorporate more of the output of our factories and farms and other local services in its product; and lead to higher value added within the economy.
Except for the smallest micro economies, the strength of the manufacturing sector is the most important barometer of an economy's health. In most successful economies, it is the sector which provides the best opportunity for the productive employment of labour. Even in Jamaica, labour productivity in manufacturing is twice that of services and six times more than agriculture, based on GDP contribution.
If our economic development is to move forward with purpose and momentum, our economic planners should focus on rebuilding the manufacturing sector because it offers the best opportunity for our people to be productive.
Claude Clarke is former trade minister and manufacturer. Feedback may be sent to columns@gleanerjm.com.
Published: Sunday | April 5, 2009
Claude Clarke, Contributor
I was thrilled to have met Robert Lightbourne while campaigning for the general elections of 1989. Always articulate and urbane, though in his waning years, he was still debonair and dynamic. But what most impressed me in every contact I had with him was his irrepressible passion for the industrialisation of Jamaica.
Although I was already committed to the idea of an industrialised Jamaica - in fact, it was my only reason for entering politics - I was further infected by Lightbourne's enthusiasm. He flattered me by expressing the belief that I might be able to play a role in advancing this goal if the PNP were elected in the upcoming elections, and even made an audio tape endorsing my candidacy. I never used the tape in my campaign but occasionally listened to it, especially at the times of my greatest frustrations in government.
Among those moments was my first realisation, after the swearing in of the new Cabinet in 1989, that in the assignment of portfolios all the key agencies which would have to be involved in industrial development had been removed from the Ministry of Industry and Commerce to which I was assigned.
What made this significant for me was the fact that in the run-up to the elections I had invested more time and mental energy to developing policy ideas and strategies for Jamaica's industrial development than I had committed to campaigning for my own parliamentary seat. Buoyed by Light-bourne's encouragement, I had built up a high degree of anticipation for the challenge of driving the effort towards industrialisation, and the realisation that the opportunity would not materialise was the greatest disappointment of my short political life. It is that which made it so easy for me to depart active politics prematurely.
The Ministry of Industry and Commerce was stripped of every important tool which would have been needed to effect or even to affect industrial development in the country. It is little wonder that in noticing the greatly diminished responsibility and budget of the ministry for which he was once responsible, former Minister of Industry and Commerce Douglas Vaz was moved to describe it as the "Ministry of 'Cheap Talk'." Douglas was right.
Since then, monetary, fiscal and trade policies have emerged from government as if guided by a mission to reverse Jamaica's development.
Our industrialisation had been long in the making. It began in the 1940s as an early priority of our suffrage. It continued through the 1950s but really gained impetus under Light-bourne's leadership in the 1960s. Although the perceived focus on cheap labour in the 1980s was not popular, industrialisation was advanced during that decade, and the country was brought to such a relatively high level of industrial competitiveness that it attracted retaliatory pro-tective action within CARICOM.
The 1990s saw a dramatic reversal of this process of industrialisation. More than half of our manufacturing jobs disappeared during the period. Even the 1970s, widely seen as the period of greatest economic decline, did not see the reversal of industrialisation experienced in the 1990s and 2000s. The contribution of the goods-producing sector to GDP fell eight percentage points to 37 per cent during the 1970s. It recovered in the 1980s, getting back to 44 per cent by 1991. But it fell again during the 1990s and reached 30 per cent by 2001, and further declined to 28 per cent in 2007. What is clear is that the periods of low goods production were accompanied by economic decline and, conversely, the years of high goods production showed strong economic growth.
The promoters of the policies which reversed our industrialisation seem not to have recognised what centuries of human civilisation have established: that no economy, except for the smallest of micro states, has achieved economic development without industrialisation. Industrial-isation is not simply a matter of manufacturing.
It is a state of technology-based economic and social organisation which fosters, and is facilitated by, manufacturing. It enables an economy to embrace and absorb modern methods of production in all areas, whether it is in agriculture, manufacturing or services. It moves a country's economic engine to convert crude materials and other primary assets, including labour, to more economically useful goods and services which provide higher levels of consumer value, satisfaction and convenience.
Agriculture has been heralded by many opinion leaders as essential to our economic well-being, and especially our food security. There is no doubting the importance of agriculture to rural communities, but to attempt to achieve food sufficiency, producing all the food we consume, is not prudent policy in today's globalised world.
The concept of food sufficiency lost its relevance with the ending of the cold war and the polarised geopolitical environment it engendered; and today the surest way of achieving food security is through economic prosperity. That is why more food is available to the people of Cayman, with no land on which to grow it, than can be had by the citizens of Guyana, with its vast expanses of land. Above all, the idea of food sufficiency is highly wasteful of capital. That is because it very often leads to the production of food, even when the production process consumes more capital than the value it creates.
In Jamaica, agriculture contributes five per cent of GDP and uses over 17 per cent of our employed workforce. The average agricultural worker can, therefore, earn little more than a quarter of the income of the average worker in the rest of the economy. This is because many of our farmers are still tied to technology we should have left behind with slavery. Only industrialisation can change this and increase the productivity of agriculture to enable our farmers to break out of the cycle of poverty in which they have been trapped for generations.
Services contribute most to our GDP (62 per cent in 2007). This fact has been interpreted by some economic analysts to mean Jamaica is now a services economy. However, because the earnings of this sector, except for tourism, are almost entirely domestically derived, its real value can only be revealed through the vitality of the other sectors of the economy.
In that regard, the services sector, excepting that which is exported or directly consumed, is a cost centre and not a profit centre of the economy, and its significant showing in the GDP is essentially the result of the high prices charged to consumers and producers within the economy, who are held captive by the absence of external competition.
Vital industry
Tourism is a vital export service industry which contributes much to our economy. However, the extent to which it is able to add value to the economy is substantially determined by the degree to which the economy as a whole is industrialised. An industrialised, and hence competitive, economy would allow the tourism sector to incorporate more of the output of our factories and farms and other local services in its product; and lead to higher value added within the economy.
Except for the smallest micro economies, the strength of the manufacturing sector is the most important barometer of an economy's health. In most successful economies, it is the sector which provides the best opportunity for the productive employment of labour. Even in Jamaica, labour productivity in manufacturing is twice that of services and six times more than agriculture, based on GDP contribution.
If our economic development is to move forward with purpose and momentum, our economic planners should focus on rebuilding the manufacturing sector because it offers the best opportunity for our people to be productive.
Claude Clarke is former trade minister and manufacturer. Feedback may be sent to columns@gleanerjm.com.
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