Jamaica’s economic dilemma

[Jangle]

Technology and strategic planning, the path to Jamaica’s economic sophistication

THE Planning Institute of Jamaica (PIOJ) reported a 1.9 per cent growth for the Jamaican economy in the first quarter of 2024. Notable growths occurring in the Mining and Quarrying industry, 25 per cent, and Agriculture, 7.7 per cent, indicate an uptick in the business cycle.

However, these outcomes have been inconsistent. Flood and drought episodes affect agriculture and poorly negotiated contract agreements, and other factors impact mining. This volatility in output ought to be replaced by steady increases. The construction industry that previously displayed stable growth declined by 4.5 per cent for this quarter, affected by higher raw material prices, a decline in demand that has tied up cash flow and a fall in private investment. From the services point of view, the Electricity, Gas, and Water industry grew by over 7 per cent. It along with Financial Services and Insurance have been Jamaica’s most productive industries. The Hotel and Tourism industry, Jamaica’s biggest investment, grew by 6 per cent. Overall, Jamaica has witnessed 12 quarters of consecutive growth. However, the average man on the street continues to complain that his standards of living has not improved significantly.

Jamaica is at an economic crossroads, facing a significant dilemma between achieving good macroeconomic performance on paper and fostering real economic progress for its citizens in real life. Astute fiscal management over the past decade has helped to effectively reduce the islands debt burden from 146 per cent to 72 per cent of gross domestic product (GDP). A shift towards inflation targetting, a less volatile exchange rate, and a B+ credit rating, show signs of economic stability. However, the country continues to grow at its usual 1-2 per cent on average. With the Government’s focus on job creation, Jamaica managed to historically lower its unemployment rate to 4.2 per cent, bringing the economy close to full employment. But with low growth in output, most of these jobs pay close to minimum wage; roughly $100 USD per week or $2.50 per hour, not enough to empower them economically. The socio-economic structure is a triangle with a very small tip for the upper class, a very small per cent of the population is considered middle class while the vast majority are lower class at the bottom. This should be a diamond, whereby the broad base middle class is in the middle and small upper class to the top and a small lower class at the bottom.

A major issue is that 83 per cent of Jamaicans have not attained any tertiary level education, thus restricting their ability to move into the middle class. This lack of education coupled with widespread corruption have been identified as two of the biggest hindrances to labour productivity growth on the island. As a result, we see a range of issues: low wages, a low standard of living, low output, low technological adoption, low business sophistication, low innovation, and low self-esteem among the populace. We are stuck with industries and economic structures that have not significantly evolved since the 1960s. For instance, producing low-value goods like banana chips while other countries produce high-value items like microchips puts us at a disadvantage. The microchip may take a longer time to understand how to produce and might require more effort and educated labour to produce but offers exponentially more income than banana chips. Our education system also needs a major overhaul. We need targetted educational programmes and policies that emphasise technology and innovation, equipping our citizens with the skills needed for the modern economy.

https://www.jamaicaobserver.com/2024...nomic-dilemma/

[Assasin]

Sound good but how do we get there? Reasoning with a brethren and he said some these people don't even want to sign up for a trade or be certified. Another thing is countries normally move in stages. check most of the developed countries. They use the template from poor to middle to high earners. More than likely this kind of thing take a generation or two. You still need the current industries and provide ways for people to move forward. Remember what happen when we shut the free zone first time around?

[Sir X]

most of these jobs pay close to minimum wage; roughly $100 USD per week or $2.50 per hour, not enough to empower them economically. The socio-economic structure is a triangle with a very small tip for the upper class, a very small per cent of the population is considered middle class while the vast majority are lower class at the bottom. This should be a diamond, whereby the broad base middle class is in the middle and small upper class to the top and a small lower class at the bottom.

A major issue is that 83 per cent of Jamaicans have not attained any tertiary level education, thus restricting their ability to move into the middle class. This lack of education coupled with widespread corruption have been identified as two of the biggest hindrances to labour productivity growth on the island. As a result, we see a range of issues: low wages, a low standard of living, low output, low technological adoption, low business sophistication, low innovation, and low self-esteem among the populace. We are stuck with industries and economic structures that have not significantly evolved since the 1960s.

Which posters have been saying this for the longest

[Jangle]

Ok Mr. Bright Spark, let's start with Jamaica's literacy rate. Right now it's at approximately 52%, which could be a false reading because of COVID. How many of that 52% has tertiary level education? Of the other 48% uneducated or under-educated population, how many are youths 25 years old and under? Let's go a little further, how many of that younger demographic is made up of unemployed males? Historically, what is the ratio of girls vs boys completing high school? The problem has always been with the young men. How are you going to get this large section of the population to go learn STEM to start the transformation of the economy, and what time frame do you expect to achieve that transformation? This is what I mean about your idea being impractical. During the 1930's, America came with the Big Deal by building the interstate road network which transformed the economy. A practical solution which employed millions.

Tourism has been one of major contributor to Jamaica's GDP over the years. The foundation is laid and it is undebatable that successive governments have not maximized its potential. However, with the renewed thrust for investments into the industry by this government, you can see the immediate and long-term benefits in employing many of the 48%, if you take out the party politics out of this debate.

"A major issue is that 83 per cent of Jamaicans have not attained any tertiary level education, thus restricting their ability to move into the middle class."

[Assasin]

Talking to a friend of mine and he said the youths in the district not really inna the training and education thing. The young ladies are and are moving ahead. The kind of opportunity that is currently in Jamaica is not there when we were there. We have to encourage the males to take advantage and step up.

[Jangle]

Cultivating Jamaica’s future

The urgent need for apprenticeships

APPRENTICESHIPS can have a triple benefit, positively impacting the apprentice, their employer, and society as a whole. This is the consensus among business industry players who believe the model can greatly benefit the economy by addressing the labour shortage issue as well as crime.

“For those who would have left high school or may not have finished with the best grades, but to give them that opportunity of learning a trade and getting qualified in a trade that’s appropriate, and also to work with the manufacturers to ensure that we fill these positions that we need that are technically in nature. So it’s obviously a win-win situation,” said former president of the Jamaica Manufacturers and Exporters Association (JMEA) John Mahfood in an interview with the Jamaica Observer.

Figures from Statistical Institute of Jamaica (Statin) for Q1 2024 revealed that with a labour force of approximately 2.1 million people of working age, only around 1.4 million are actively participating, despite a low unemployment rate of roughly 5 per cent. This means around 700,000 people are not engaged in the labour market. Further statistics from Statin show that, of the 1.4 million actively participating, many employed individuals lack certification, with only 227,300 having tertiary education. Kamesha Blake, executive director of the JMEA, shared that utilising this model can help drive certification, employment, and economic growth.

“With a low unemployment rate, people are not readily available. However, by tapping into the unskilled and non-employed population, encouraging them to join the labour force, and certifying them, we can drive economic growth,” she said.

Despite the officially low unemployment rate, manufacturers are facing significant challenges in finding qualified technicians, electricians, mechanical technicians, electrical technicians, forklift drivers, and other skilled staff. Companies often address this by sending existing employees to HEART for training, a common and popular approach. HEART also collaborates with manufacturers to offer training sessions outside of working hours. However, Mahfood pointed out that it’s not solving the problem.

“HEART has proposed an apprenticeship programme, which we have agreed to implement. This programme will provide staff with practical experience by allowing them to work with us for a period of time as part of their official training at HEART,” Mahfood told the Business Observer.

https://www.jamaicaobserver.com/2024...maicas-future/

[Jangle]

FosRich switches on to apprenticeships

ALTHOUGH understanding the apprenticeship model is one aspect that can help improve the take-up of the model among businesses, the other crucial element lies in the confidence of employers and businesses to implement it.

This can be viewed from two perspectives: one, as a social and corporate responsibility, or two, as a means of improvement. Cecil Foster, managing director of FosRich Company, exemplifies the first approach. He chose to prioritise social and corporate responsibility when he established the company’s corporate university for employees just two years ago.

“The programmes rival a lot of what happens in the universities and so on,” Foster shared with the Jamaica Observer in an interview.

He explained that in his recent discussion with University of Technology (UTech), Jamaica, they expressed enthusiasm about exploring ways to assist with certification. Currently, FosRich relies on private individuals for this service. However, the university is now eager to collaborate and potentially take on some of their employees at various levels for certification and training or work with them to provide these services.

“When people come from whichever level, whichever school they come from, whether they are engineers or just management of studies students, they are not industry-ready. And in order for us to get to where we want to go, we’ve decided that it is best if we spend this on our people. To develop them to become the best in the industry that they are in,” said Foster while speaking with the Business Observer.

https://www.jamaicaobserver.com/2024...prenticeships/

[Jangle]

Learning from the past: the apprentice revival

AS the world grapples with a growing skills gap, a centuries-old solution is gaining renewed attention. Apprenticeship, once the domain of medieval guilds, are being embraced by companies and countries as a vital tool for workforce development. From Germany’s dual education model to Jamaica’s struggles with skilled labour, this ancient approach is being reimagined for the modern economy.


Over the last three years, calls for more skilled labour have echoed across the island, with several business leaders in the private sector, including chairman of the Margaritaville Caribbean Group Ian Dear and deputy chairman of Chukka Caribbean John Byles, calling on the Government to consider implementing a programme to import skilled labour to meet the demand, specifically in the hospitality sector.

But the calls were met with immediate backlash from the public, who are sceptical about the reasons offered by business, despite a known labour shortage in Jamaica.

“This is not about replacing Jamaican labour. This is not about getting cheaper labour. This is about increasing the competency of the workforce and ensuring that companies, when they are allowed to bring in people, show a clear plan of how they will use them to also train our local labour to get up to the standard to replace them,” Seprod CEO Richard Pandohie disclosed in a previous interview with the
Jamaica Observer, aiming to shed light on the issue.

This approach is similar to the traditional roots of apprenticeships, which dates back to mediaeval Europe. During this time, craftsmen and artisans formed guilds to regulate their trades and train the next generation of skilled workers through a system of apprenticeship. Typically, young individuals in their early teens would be placed under the mentorship of a master craftsman to learn the intricacies of a specific trade. The foundation of apprenticeship models is built on the idea of using skilled workers to train others in the specific skill. However, according to Pandohie, if a country already lacks skilled workers, it would make economic and business sense to import the necessary skills to train others.

Countries like Germany and Switzerland have long championed apprenticeship systems, with the dual education model offering a blend of classroom instruction and hands-on training. The success of these models has prompted other nations, including the United States and the United Kingdom, to implement similar apprenticeship initiatives to cultivate a skilled workforce. Tech giants like IBM and Microsoft and the National Health Service have established apprenticeship schemes to nurture talent in emerging fields such as health care, cybersecurity, and cloud computing, demonstrating the adaptability of apprenticeships to modern industries.

https://www.jamaicaobserver.com/2024...ntice-revival/