JMEA's National Exporters' Month 2019

National Exporters’ Month 2019

A Special Advertising Supplement

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

THEME: BREAKING BARRIERS, BUILDING BRIDGES

1 SPECIAL ADVERTISING

celebrates

SPECIAL ADVERTISING 2

MESSAGE FROM THE

GOVERNOR-GENERAL

T

twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

His Excellency the Most Hon. Sir Patrick Allen ON, GCMG, CD, KSt.J

he very existence of the Jamaica Manufacturers and Exporters’Association (JMEA) is evidence of progressive thinking and enlightened vision. The merging of two entities a year ago signalled an appreciation of the integrated, synergistic approach which the country needs to maximize its potential and create the desired progress and prosperity.

I commend the leadership of the JMEA for its sustained efforts to accelerate growth and to keep the Jamaican brand in focus in the global marketplace. Exporters’ Month is an opportunity to display your achievements and expand the reach of your products and services locally and internationally.

I am confident that your efforts and expectations will be rewarded.

Your theme “Breaking barriers, building bridges” resonates with all enlightened citizens – policy makers, leaders, management, workers, and citizens. We all desire a less contentious and more collaborative approach in the conduct of our affairs. We live in a world which celebrates the competitive spirit. We are aware, however, that healthy competition is compatible with mutual respect, sectoral linkages in the economy and a shared vision for the country as a whole. Together, we are indeed stronger.

I trust that the Association will continue to be a source of inspiration to the wider society, and Exporters’ Month will be a memorable beginning for a year of great promise for members and the society.

National Exporters’ Month 2019 “THEME: “BREAKING BARRIERS, BUILDING BRIDGES”

J

The Most Hon. Andrew Holness, ON, MP, Prime Minister

PRIME MINISTER

of stakeholders in Government, the JMEA and partners in the private sector to ensure exports remain robust even as we work to significantly expand the sector to new markets thereby increasing earnings. Indeed, like the Government, the JMEA recognizes that exporting is a key part of our economic international activity and a major component of Jamaica’s growth strategy, in that regard, our entrepreneurs, small business sector, export promotion and expansion are critical sustainable growth levers. As this Administration seeks new opportunities and markets to build out Jamaica’s export strategy I join in underscoring the theme of Exporters’ Month 2019, “breaking barriers, building bridges”.

This is the time to realise our full potential with our local products and services being given greater prominence on the international market. We must however become more strategic, responsive, resilient and tenacious in showcasing Jamaican items to the world.

Jamaican brands are the best and we must make our presence felt in emerging markets as we continue to build relationships and expand our global footprint.

I congratulate the JMEA for continuing the focus on exports. We have celebrated many achievements and we look positively ahead for many more successes to come.

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

amaica’s economy is building momentum to achieve higher levels of growth. The two percent growth in the final quarter of the fiscal year 2018, is the highest quarter on quarter economic growth in Jamaica in several decades. The improvement in the economic indicators is attributable in part to the growth in exports.

The Jamaica Manufacturers and Exporters Association (JMEA) has been a key partner in championing the critical need to grow the country’s export portfolio. Indeed, the advocacy of the JMEA for national focus on exports where we produce local and export global, has reaped positive results.

In 2018, Jamaica’s export increased by 38.5 percent when compared with 2017. Additionally, the country’s trade balance improved from US$757.7M in 2017 to US$796.6M in 2018. This was the result of exports, improvements in domestic exports and exports to our major trading partner the United States. These positive results coupled with record business and consumer confidence augur well for the future of business and small business expansion in Jamaica.

As we celebrate National Exporters’ Month 2019, I am pleased to acknowledge the work

3 SPECIAL ADVERTISING

MESSAGE FROM THE

SPECIAL ADVERTISING 4

MESSAGE FROM THE

LEADER OF OPPOSITION

I

twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

Dr. Peter Phillips, M.P. Leader of the Opposition

am delighted to join in acknowledging the contribution of the Jamaica Manufacturers and Exporters Association (JMEA) to the national economy; and, the efforts of the Exporters’ wing of the association for driving our economic development and growth through export promotion of our many products.

Jamaica continues to break new grounds year after year in the export market of our genuine Jamaican brands as was the case earlier this year when the government and people of Japan proclaimed January 9th as Jamaica Blue Mountain (JBM) Day in Japan and Jamaica. It is undoubtedly because of the efforts of the JMEA and your understanding of international trade and export systems, and your leadership which have made it possible to break new frontiers for our products entering the international marketplace.

It is the sustained efforts and

commitment of our exporters that is partly responsible for the many Jamaican brands which have reached their points of recognition on the international market. However, I agree with JMEA that although Jamaica punches above its weight in many spheres, we are yet to reach our full potential. For this reason, I would encourage the association to continue in your effort to seeking new market opportunities to promote brand Jamaica.

JMEA has done remarkably well as an association in expanding the Jamaica’s footprint on the global stage; but equally, you have shown your resolve as an association in ensuring that the national economy remains strong and resilient to external uncertainties. The Association deserves recognition also for the role played in our national discourse on crime, the national economy and governance administration.

On behalf of the Opposition, I extend my best wishes to the JMEA in celebration of National Exporters’ Month, which you have aligned with World Trade Month under the theme “Breaking Barriers, Building Bridges.”

MESSAGE FROM THE

MINISTER A

n export-driven economy which takes aim at the tremendous demand for Jamaican goods and services is key to improving the economic and social fortunes of Jamaica.

So pivotal is the objective of increasing our exports that the Ministry of Industry Commerce, Agriculture and Fisheries saw it prudent to create the National Export Strategy (NES).

This strategy is aimed at improving Jamaica’s export performance by advancing the competitiveness of our Hon. Audley various sectors while enhancing the business Shaw, CD, MP and trade environment.

Minister of Driven by stakeholders in the private and public Industry, sectors, the NES further seeks to improve Jamaica’s Commerce, exports by focusing on market-driven interventions in Agriculture and a number of priority areas, such as, Agro-Processing Fisheries and Manufacturing.

We have also made significant strides in improving our trading environment to boost local and international investment in Jamaica. The Electronic Single Window (ESW) and the Trade Facilitation Portal (TFP) - which will also be launched this month - are key pieces of the overhauling of the trading landscape.

As we mark National Exporters Month, I wish to salute the hard work of our key stakeholders, the men and women who, above all odds continue to push for growth – growth of their businesses and ultimately that of the country’s.

I urge all manufacturers, goods and service providers to embrace their roles as pivotal to our country’s quest for better days and to stay the course, as we toil on.

I wish to also thank our key implementation partners of the NET, JAMPRO, the JMEA and the Trade Board, for their role in helping to stimulate our various producers to own the national agenda of improved exports and, wish for all a successful National Exporters’ Month.

5 SPECIAL ADVERTISING

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

SPECIAL ADVERTISING 6

MESSAGE FROM THE

PRESIDENT OF JMEA Export

Metry Seaga, President of the Jamaica Manufacturers and Exporters Association (HMEA)

“Breaking Barriers, Building Bridges” is more than just the theme for this year’s National Exporters’ Month. It is at the core of the activities of the Jamaica Manufacturers and Exporters Association (JMEA).

Through advocacy and the leveraging of networks, the JMEA continues to be the powerful voice of the manufacturing and export community, fighting avidly to reduce the red-tape and Government bureaucracy, that incumber the industry and provides the support necessary to ensure the sustainable growth of our member companies and our country.

To this end, the JMEA offers a wide array of export services, including market needs analysis of Jamaican products and services, and provides exposure around the globe through promotions and trade missions.

Our upcoming Jamaica International Exhibition (JIE), slated for May 30 to June 1, 2019 in Montego Bay, gives exhibitors the opportunity to sell to local buyers, and most importantly, allows for international retailers to carry Jamaican goods and services to international markets. These are all a part of our vision to advance a thriving manufacturing and export-led economy.

Though Jamaica is on the right path to increasing export growth, there is still a lot of work that needs to be done. Over the years, our leaders have focused on improving macro-economic stability, which is indeed commendable, but it is

now time to put a forward-thinking export development plan at the forefront, where it belongs. It is a cart-before-the-horse mentality that has stifled the true potential of our export sector. We must not forget that our overarching goal should be to turn Jamaica from an importing and consuming country into a producing and exporting hub. As such, we continue to call for the allocation of the well needed resource to implement and realize the outcome of the National Export Strategy. It is fact that a healthy export industry is beneficial to every Jamaican, and if we intend to drive sustainable and substantial increases in economic growth above the current 1% to 2%, we must make a collective prioritizing effort.

In addition to our prominent brand identity, Jamaica has enjoyed preferential tariff arrangements with the United States, the European Union, Canada and with other English-speaking Caribbean states under CARICOM, which has bilateral trade agreements with Costa Rica, Cuba, Dominican Republic, Colombia, and Venezuela. The sector is bursting with creativity and opportunity. We endeavour to share with the world all that Jamaica has to offer – our excellent craftsmanship, delicious food and beverages, innovative technologies as well as our arts and culture that continue to inspire, entertain and enrich lives. As we lead the celebration of National Exporters’ Month 2019, we call on our partners and friends to help facilitate the creation of a conducive environment for local businesses to give them the empowerment they need to strive in the competitive global marketplace.

Opportunities, Import Substitution and the Economy: A Tale of a Love Triangle

There is no doubt that 2018 has been an exciting year for export in Jamaica. The value of exports grew by 37.8 per cent in 2018 compared to 2017, representing the largest growth in the past ten (10) years. However, if this statistic is taken at face value then one can easily be swept away without understanding the true undercurrents. Upon review of Jamaica’s exports in 2018, it is evident that while total exports grew by such a large amount, the majority of the growth was achieved by the ‘Crude Material’ industry, that accounts for 64 per cent of our exports. If ‘Crude Materials’ were removed, then the value of exports would have only increased by 7.1 per cent. When one considers other products such as ‘Coffee’ that decreased by 24.6 per cent, ‘Fish’ that decreased by 28 per cent, ‘Papayas’ that decreased by 12.7 per cent and ‘Furniture’ that decreased by 23.1 per cent, then that paints a truer picture of the export landscape. If that is coupled with the fact that the world import markets for those four products have increased at an average 4 per cent every year since 2014, then the following conclusions can be drawn: 1. Demand is growing worldwide 2. Jamaica’s exports are not fulfilling this demand 3. The demand is being satisfied by other countries However, it is almost futile to make reference to global demand when Jamaica’s exports are not living up to its renowned stallion reputation and penetrating the CARICOM market. If we delve even deeper into the rapids, we realize as well that Jamaica’s trade deficit with the CARICOM region, our closest neighbours, increased to US$396.9 million. This is especially disturbing considering that earnings from total exports to CARICOM decreased by 1.1 per cent to US$79.0 million. The countries that should be focused on are Trinidad & Tobago, Guyana and Dominica. Trinidad & Tobago has the third largest population in the region and imports approximately 70 per cent of their food. Dominica’s import value has increased by 111 per cent and lastly Guyana’s import value has increased by 127 per cent in 2018 compared to the previous year, the majority of that increased demand being absorbed by the United States of America.

Despite these indicators, it remains unquestionable that Jamaica’s growth agenda is dependent on purposeful expansion of exports, both in traditional and non-traditional markets. There is a love affair between exports and the economy. However, the dirty truth is that this needs to be a love triangle and import substitution is no longer happy with being the third wheel. Only when strong and diversified exports work in conjunction with deliberate import substitution strategies, will the economy realize euphoric growth that trickles down to all industries and individuals, stimulating development.

Recent statistics indicate that in 2018 Jamaica saw a: • 7.9 per cent growth in ‘Food’ imports, valuing US$902 Million • 13.5 per cent growth in ‘Chemicals’ imports, valuing US$754 Million • 10.8 per cent growth in ‘Manufactured Goods’ imports, valuing US$742 Million Though impossible to completely eradicate the temptation of imports, if we were to develop import substitution policies and strategies for sectors such as ‘Food’, ‘Chemicals’ and ‘Manufactured Goods’, it would result in an immediate US$2.4 Billion reduction in our trade deficit. Being more self-sufficient and less dependent on imports will enable us to raise the overall level of economic activity in Jamaica and pay more salaries while strengthening the local tax base.

Jamaica is seen as the strongest brand in the Caribbean region. Take advantage today, the time is right.

JAMPRO pleased to support National Exporters’ Month

T

Diane Edwards, President, JAMPRO

We also have a buyer recruitment programme for events like Expo Jamaica, and inward and outward trade missions to connect exporters with distributors, retailers and other business stakeholders. JAMPRO works assiduously to ensure the quality of these buyers is excellent, to support the growth in our manufacturing sector and increase exports of our Jamaican goods and services. Our market development initiatives in the Caribbean, North America and Europe, work alongside our buyer recruitment programme, to create the positive atmosphere for Jamaican products to thrive.

Connecting exporters to the world With the rise of e-commerce, and more access to other distribution channels, and the overall improvement of the island’s business atmosphere, JAMPRO believes it is the right time for Jamaican exporters to take advantage of global markets.

We will continue to work closely with local businesses to make them more competitive and export-ready, by providing practical support, expert advice, and access to technical assistance that will enable them to expand their operations.

The theme for National Exporters’ Month in 2019 is “Breaking Barriers, Building Bridges,” and JAMPRO believes that we will do just that for our companies, our partners and Jamaica.

We make it a priority to continue to build our partnership with the JMEA to increase the export of Jamaican products, and we look forward to collaborating with them on not only for this month, but also for other initiatives to support Jamaica’s exporters, and the promotion of Brand Jamaica.

During this month’s activities, we are looking forward to hearing from our exporters, and we’re ready to work with you as you head on your exporting journey.

Let’s do business!

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

he Jamaica Promotions Corporation (JAMPRO) is pleased to support the celebration of Jamaica’s exporters during National Exporters’ Month.

We are happy to work with the Jamaica Manufacturers’ and Exporters’ Association (JMEA) and other partners on this initiative, which highlights the significant role export plays in Jamaica’s economic growth, and the work done by our exporters as we collaborate to boost the prominence of Brand Jamaica internationally.

As the island’s export and investment promotions Agency, JAMPRO believes that through partnership and innovation, Jamaica’s exports to international markets will increase, and our local SMEs and large enterprises will build international business relationships that will provide a boost for our economy.

Throughout the years, JAMPRO has been witness to the incredible growth of Jamaica’s exporters. In the 2017-2018 financial year, JAMPRO’s clients recorded US$455.8 million in export sales, and we expect to pass that target for the 2018-2019 financial year.

While this achievement was double our target, we believe that we can improve these numbers and see further growth of our export sales. JAMPRO has been using various avenues to provide a boost for exporters, for example, through our flagship export development programme, “Export Max”. Through this programme, companies have accessed new markets, strengthened their business processes, and gained much needed knowledge to export their products. We will be continuing this programme with the recently launched Export Max III, where 50 Jamaican SMEs will benefit from interventions that will boost the export sales.

7 SPECIAL ADVERTISING

Our Champions for Growth;

SPECIAL ADVERTISING 8 twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

Currency Swings and Growth: Impact of Devaluations on Exports

Contributed By Dr. André Gordon, Past President, of the JMEA and Managing Director Technological Solutions Limited

At a recent Jamaica Security Dealers Association (JSDA) Forum, my presentation on the abovecaptioned topic as part of an industry panel elicited a lively response. In the short five (5) minutes that we were given, I provided factual information on the historical performance of our exports, the various rates of exchange over the period and the corresponding data for other developing countries with floating exchange rate regimes. As has been indicated in previous articles, Jamaica’s options for near term real significant and sustainable growth lie heavily with our ability to increase our export earnings, exports being the area with the greatest degrees of freedom in the typical growth equation: Y = C + I + G + X, where Y is growth, C is consumer spending, I is investments (largely driven by foreign direct investments (FDIs), G is government spending and X is (net) exports (I extend gratitude to both Dr. André Haughton and Professor Densil Williams for simplifying this concept in their discussions on the matter).

A cursory assessment will show that of all four factors, only exports is likely to, or can show significant increases in the near term, with C and G being heavily constrained and FDIs not having the expected growth impact even when they have been at records levels in the past decade.

Since 2004, Jamaica had the highest levels of FDI of US$1,440, US$925 and US$928 million in 2008, 2015 and 2016, respectively. GDP growth in these years was -0.8%, 1.0% and 1.5%, respectively, these highest levels of FDI not resulting in significantly enhanced growth.

Consequently, the factors that influence our exports are of importance as these are likely to determine whether or not we realistically will be able to approach or achieve the greater than 5% growth rates that economists have indicated we really need to see a sustained improvement

in per capita incomes. It is in this context that currency swings and their impact on growth were discussed in the data presented at the forum which is also shared and discussed in this article.

In 2014, the IMF found that 43% of all countries were using a managed floating exchange rate, up from 35% in 2009. This was to safeguard their currencies from increased volatility, the managed float representing a middle ground between a free float and a fixed exchange rate. Thirty-four (34%) of countries, including the United States of America, used a free-floating exchange rate down from 42% in 2009, with 25 countries, including Hong Kong using a fixed exchange rate. In the Caribbean, Barbados, the Bahamas and the Organization of Eastern Caribbean States (OECS) countries all have a fixed exchange rate and, as such, are insulated from currency swings. Jamaica, Trinidad and Tobago and Guyana, on the other hand, all operate a floating exchange rate regime. When the export performance of these latter three, as well as that of ten other developing countries from the Caribbean, Central and South America and Asia with floating exchange rates were examined, however, interesting observations emerged.

The export performance for Jamaica, Trinidad and Tobago and Guyana have varied significantly over the last fifteen years, with the future trajectory being different for Guyana than it appears to be for both Trinidad and Tobago and Jamaica. In Jamaica’s case, when one examines the relationship between exchange rate and merchandise exports the following were the findings: Over the period 1985 to 2015, the Jamaican dollar moved from J$5.50 to J$120.42 to US$; a 2,189% devaluation, with exports increasing by 226%. In other words, for the 30-year period, the dollar devalued at a rate almost 10 times faster than the increase in exports.

If the data is broken down further by specific periods, it emerges that for the period 1985 to 1990, there was a 49% devaluation from J$5.50: US$1 to J$8.17:US$1, corresponded to a 210% increase in exports, driven largely by explosive growth in 807 garment exports. From 1990 to 1991, the movement was from J$8.17 to J$21.57, a 264% depreciation while exports went from $1.192 billion to $1.150 billion, a 3.5% decrease. For the period 1991 to 2000, a 111% devaluation from J$21.57: US$1 to J$45.53:US$1 corresponded to a 35.1% increase in exports, while from 2000 – 2008, the movement was from J$45.53 to J$80.47, a 77% devaluation. Exports went from $1.499B to $2.743B, a 77% increase, the greatest increase in the period, occasioned by high petroleum products, chemicals, ethanol and scrap metal exports, bolstered by a collaborative programme targeting exports by both government and the private sector.

The years 2008 to 2012 were a period of greater economic challenges as the economy declined. From 2008 to 2012, a 15.6% devaluation from J$80.47: US$1 to J$92.98:US$1 corresponded to a 37.0% decline in exports while from 2012 to 2015, the movement was from J$92.98 to J$120.42, a 29.5% devaluation during which period there was a 26.5% reduction in exports, the reduction in exports in this period being highly correlated with the depreciation of the currency (r² = -97.8). The largest declines were in manufactured goods exports which went from $155 million to $57.8 million and in traditional exports which went from just under $814 million to $626.7 million.

Continued on >>> Page 10

9 SPECIAL ADVERTISING

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

SPECIAL ADVERTISING 10 twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

Currency Swings and Growth: Continued from <<< Page 8

have been growing steadily (Figure 4), increasing to US$389 million in 2017 from just under US$100 million in 2006, with GDP growth averaging approximately 4% before last year (2018) when it declined to 2.0%.

Figure 3: The Jamaican vs Guyanese Exchange Rate 1990-2018

Figure 1: The Jamaican vs T&T Exchange Rate 1990-2018 How does this compare with other Caribbean countries?

If we look at Trinidad and Tobago, the exchange rate declined by 58.2% from TT$4.29:US$1 in 1991 to TT$6.87:US$1 in 2018 while over a comparable period, the Jamaican dollar depreciated much more sharply by 612%. Figures 1 and 2 show the comparable performance of the Trinidadian and Jamaica currencies and exports.

For Trinidad and Tobago, exports stagnated in 2017/2018 while the economy declined by 2.3% in 2017. While the rate and magnitude of the depreciation of the T&T dollar was more measured than its Jamaican counterpart, the export performance for both countries was similar, and neither was stellar (Figure 2).

Figure 2: Jamaican vs T&T Exports (US$) 1990-2018 In comparison, while the Guyanese dollar also depreciated, it did so in a measured, stepwise manner and has remained relatively stable since 2008 while the Jamaican dollar has continued to decline (Fig. 3). In Guyana, the exchange rate moved from GD$138 in 1995 to GD$200 in 2008, remaining stable since (currently GD$207: US$1.00). At the same time, Guyanese exports

Figure 5: The Jamaican vs Costa Rican Exchange Rate 1994-2018

Figure 6: Jamaican vs Costa Rican Exports (US$) 1990-2018

Figure 4: Jamaican vs Guyanese Exports (US$) 1990-2018

Figure 7: The Jamaican vs Dominican Republic Exchange Rate 2004-2019 (Continued on Page 11)

Figure 9: The Jamaican vs The Philippines Exchange Rate 1998-2018

Figure 10: Jamaican vs Philippine Exports (US$) 1992-2018

Figure 12: Jamaica vs Thailand’s Exchange Rate 2004-2018

Figure 11: Jamaican vs Philippine GDP Growth Rates 1994-2018

Figure 13: Jamaican vs Thailand Exports (US$) 1992-2018

Figure 14: Jamaican vs Thailand GDP Growth Rates 1994-2018

In an article published in Bloomberg Businessweek, October 20, 2017, Peter Coy summarized the work of Harvard Economist Gita Gopinath who indicated that research has shown that the benefits of flexible exchange rates for small countries, particularly exchange rate depreciations, have been overstated. Coy, in fact, points out that Gopinath’s research shows that the benefits that small countries are expected to get by letting their currency depreciate, thereby making their goods more affordable in global markets, tend not to materialize in the short run as exports are invoiced in US dollars rather than the local currency. Coy noted that in presenting her research at a conference organized by the Petersen Institute for International Economics, Gopinath indicated that the argument for letting currencies float “is worse than you think…”. Both authors were making the case that caution is needed in pursuing purist economic policies when the data suggest that the outcomes may not match predictions.

In Jamaica, the Jamaica Exporters Association (JEA), predecessor to the recently formed Jamaica Manufacturers and Exporters Association (JMEA), has for years been advising various governments that the expected benefits of exchange rate depreciation were more notional than real. Exporters consistently have asked for greater stability and predictability, thereby allowing them to plan effectively, citing the unavoidably high import content of their manufactured and other products.

The data the we have presented here have been derived from the Bank of Jamaica, STATIN, the Trinidad and Tobago Central Bank, the International Trade Centre’s Trade Map and Trading Economics, among other sources. It has been presented as obtained, in a manner, we hope, that helps to stimulate more thoughtful debate. The experience in other developing countries should also be instructive.

It is important to note that the author is by no means suggesting that the complicated issue of achieving sustainable growth and the relationship between exchange rates, exports and growth is influenced only by the relative value of the currency. What is being presented are simply the facts which we strongly encourage the reader to research for themselves. Nevertheless, however the cake is sliced and regardless of differing opinions on the matter, the data on exchange rate depreciation, export performance and growth in Jamaica’s case is not flattering. The data show that devaluations have not helped to increase Jamaica’s exports in a manner commensurate with the declines in the value of the currency. Other countries, including some of our Caribbean neighbours, have consistently grown at 3-5% with stable or re-valuing currencies over the period that the Jamaican dollar (and our exports) have declined or stagnated. © André Gordon, 12 April 2019

Currency Swings Continued from <<< Page 10

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

If a similar assessment is done of The Philippines and Thailand, two other developing economies in South East Asia with different exchange rate trajectories, while the export and economic growth pictures are more robust, another interesting facet of the relationship between floating currencies and export growth emerges. For the Philippines, the peso fluctuated within the band of 38 to 55 peso to the US$ over a 20-year period (Fig. 9) with export growth on a fairly consistent upward trajectory over the period (Fig. 10). GDP growth in the Philippines for the period fluctuated between about 3 – 5% (Fig. 11). Thailand’s currency, the Baht revalued between 2001 and 2008 and has been fluctuating in value between 28 and 36 Baht to the US dollar since then (Fig. 12). Despite this strong revaluation, and subsequent fluctuations, Thailand’s export growth has been consistent, with the decline in 2008 followed by a quick recovery and continuation of the robust growth trend (Fig. 13). GDP growth has also performed creditably over the period averaging about 4.0 to 5.0% (Fig. 14).

11 SPECIAL ADVERTISING

An examination of the trends in currency values and exports for two other regional territories, Costa Rica (Figs 5 and 6) and Dominican Republic (Figs 7 and 8), respectively provide interesting comparisons. Costa Rica’s floating currency has remained stable within the band of 500 to 600 colones since 2008 (Figure 5) while export have grown consistently (Figure 6). Compared to the Dominican Republic, Jamaica’s currency depreciated at a much more rapid rate, declining from about J$90:US$1 in 2013 to J$132:US$1 in 2019 February (i.e. greater than 45%), as compared to the 25% decline in the Dominican peso from 40 pesos to 50 pesos to the US$1 over the same period (Figure 7). As with several of the other countries shown, exports from the DR increased over the period (Figure 8), the country being in a better position to benefit from depreciation as its exports are dominated by the mining, manufacturing and agricultural sectors, all having a much higher local value added than does Jamaica’s export mix.

Figure 8: Jamaican vs Dominican Exports (US$) 1990-2018

SPECIAL ADVERTISING 12 twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

JPS Business pledges support to Exporters’ Month offers on a suite of energy efficiency products and services such the supply and installation of: LED lighting, (Solar) LED private street lighting, Solar Photovoltaic Systems (roof-top/ground mounted), Energy Auditing services and Bulk Demineralized/ Deionized Water through our eStore, that are accessible to participants of JMEA Export Month.

We are also refining our offerings of customer sited Combined Heat and Power generation solutions Our current focus is on accelerating grid to large scale clients. modernization, diversification of our generation mix to reduce fuel costs and improving our As we transform our business to realize a internal operational efficiencies to deliver quality Smart 21st Century Grid and support Jamaica’s and reliable service in a cost effective manner. endeavor to be a major export contributor on In 2018, we made a Historic Capital Investment the global market, we anticipate and welcome of over US$117M (approximately J$15Billion) in increased partnerships to enable distributed our energy infrastructure. These interventions power generation, promote energy usage of improving generation plants fuel conversion efficiency, support renewable energy integration efficiency, application of new technology for and create a sustainable framework for electric outage management/network reliability and LED vehicle transport. public street lighting realized record performance We commit ourselves to supporting Jamaica’s in generation efficiency and network upgrades. quest for sustainable economic growth and JPS Business Development division’s focus is development as we work together to build Jamaica. to strategically identify and spur new market opportunities to support local commercial enterprises and Jamaica’s economic development.

That’s why we have committed to providing tailored - Contributed by JPS Co. Ltd The JPS family continues to support the JMEA and is a proud partner of the 2019 staging of JMEA National Exporters’ Month under the presidency of Metry Seaga. JPS family firmly believes that we have to continue POWERING WHAT MATTERS to ensure that we support our local companies to “Produce Local and Export Global” and these initiatives are vital towards that goal.

WELCOME TO THE JMEA! The Jamaica Manwufacturers and Exporters Association (JMEA) is the largest association in Jamaica representing the productive sectors of the country involved in manufacturing, primary production and provision of services for the domestic market and export. The Association continues to be the voice of the Jamaican manufacturing and export sector and the leading advocate for policies that help large and micro, small and medium enterprises compete.

As we pause to acknowledge National Exporters’ Month 2019, one of the most fundamental keys to export success is embedded in voracious market research, and the JMEA provides this niche offering. A multi-pronged strategy is key to developing the intelligence on the markets of your choice.

Visit us, attend our trade shows and most importantly, become a part of our powerful network and let us help take your business across regional and international borders.

LET US HELP YOU GROW The experienced JMEA directors and staff provide unmatched support and services in the areas of: 1. Advocacy 2. Access to Finance 3. Business Development 4. Domestic and Export Sales Opportunities 5. Export and Market Research 6. Marketing, Public Relations and Events Planning

TEN REASONS YOU SHOULD BECOME A MEMBER 1. Access to low cost and alternative financing.

2. Training and capacity building in areas such as Good Manufacturing Practices (GMP), Good Agricultural Practices (GAP), ISO 9001:2015 and more.

3. Intervention on your behalf to solve problems you encounter with Government, Ministries or other Public Sector bodies.

4. Direct access to the tourism industry through linkages events such as Christmas in July and Speed Networking.

5. Guidance on how to access incentives such as dutyfree importation of raw materials and equipment.

13 SPECIAL ADVERTISING

Profile of The Jamaica Manufacturers and Exporters Association (JMEA)

6. 20% discount on Bureau of Standards Jamaica (BSJ) services.

7. Promotion of your product/brand locally and overseas via our trade shows Expo Jamaica and Jamaica International Exhibition (JIE) as well as various trade missions. Advertising opportunities are also available through our social media and other platforms.

8. Mentorship and expert advice from renowned business leaders in export and manufacturing.

9. Access to business development expertise and programmes such as the Voucher for Technical Assistance (VTA).

500 MEMBERS STRONG, AND YOU CAN BE A MEMBER TOO! We represent exporters and manufacturers in the following sectors: EXPORT � Mining and Quarrying � Agriculture, Forestry and Fishing - Crops and Animal - Forestry and Logging - Fishing and Aquaculture � Arts and Entertainment � Professional Services � Electricity, Gas and Petroleum � Information and Communication MANUFACTURING & EXPORT � Food and Tobacco Products � Beverages � Textile, Apparel and Leather Products � Wood and Furniture Products � Printing and Paper Products � Packaging Products � Chemical and Pharmaceutical Products � Rubber and Plastic Products � Mineral and Metal Products � Electrical, Electronics and Optical Products � Jewellery and Other Manufacturing Products JOIN TODAY in 5 Easy Steps 1. Visit our website www.jmea.org to complete the online registration form or Email us at jmea@jmea.org to request registration form or Visit our office located at 85A Duke Street, Kingston with a copy of TCC and Business Registration.

2. Pay initial subscription fee, calculated upon receipt of your application. You may pay online via our website or bank.

3. After the fee is paid, your application will be presented to the Board of Directors for approval at Board of Directors’ Meeting, which are held monthly.

4. Approved applicants will be notified, pending a site visit to business/factory location.

5. New members are presented with a Membership Certificate and a New Member Package containing valuable information, including a complete list of incentives and benefits.

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

10. Access to export services such as training and research on ideal export markets for your products.

SPECIAL ADVERTISING 14 twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

Factors that impact Jamaican Export of Agricultural products Export of Jamaican agricultural products has been ongoing for centuries with different products attaining prominence at different points in our history. Jamaica exports primarily to three main markets: • The United States • Canada • The UK Of the three traditional markets, exports to the United Kingdom has been trending downwards for a while, driven primarily by the falloff in the export of bananas. The United States market is the most vibrant followed by Canada. However, we face two major challenges, the lack of production to supply these markets and the high prices that these products are sold at when they are available. The evidence clearly suggests an inverse relationship in the markets themselves between the level of products exported and the prices that are paid by consumers.

While members of the diaspora have shown a propensity to buy Jamaican products especially those that are culturally aligned no matter the price charged, increasingly other countries are attempting to compete with Jamaica in these traditional product markets by filling in the volume gaps. Traditional products such as ackees and yellow yam readily comes to mind. We are now seeing on the US shelves, ackee products from Mexico, Haiti, and within the USA itself. In terms of yellows yams, Jamaica controls approximately 25% of USA yam imports but has missed out on white yams which dominates the USA marketplace. Several Latin American countries are now attempting to produce Jamaican yellow yams and while their impact is limited at this time, this represents are serious threat

to our export of the largest non-traditional product from Jamaica.

The absence of consistently available products in these markets, negatively impacts our diaspora as well as mainstream customers now embracing aspects of our Jamaica culture especially as it relates to our cuisine. Locally, poor levels of productivity negatively affect our famers ability to take advantage of the market opportunities that are available and represents one of the gravest threats to the export performance of Jamaican agricultural products.

The following lists represents major export opportunities to the UK market, a focus of recent Jamaican Government efforts to turn around the current trajectory.

• Citrus • Regular • Hybrid varieties – Ugli • Sweet potato • Papaya • Mangoes • Cantaloupe/Honeydew • Water melon More generally, the following lists represents some of Jamaica’s best export opportunities: • Sweet potato • Local varieties • USA orange varieties which dominates world trade • Melon • Mango • Pineapple • Yam • Dasheen • Pepper

• • • • • •

Pumpkin Herbs Ackee Breadfruit Avocado Spices and nutraceuticals

While these opportunities exist, there are several challenges that limits our ability to take advantages. Some examples are: • Adhoc nature of a buying arrangements • High price points at farmgate • Inconsistency of supply and lack of production planning • Extremely poor post-harvest practices • High cost logistics to move the produce to markets • lack of focus on productivity, perhaps our greatest challenge Addressing these challenges will require concerted efforts by all stakeholders. It can be done, but do we have the will to do it? What is clear, failure to address these issues will badly affect our ability to export and our foreign exchange earnings and ultimately our ability to compete in our own backyard. The current level of imports of semi-processed agricultural products attests to this.

- Contributed by Dr. Derrick Deslandes, President, College of Agriculture Science and Education

15 SPECIAL ADVERTISING

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

SPECIAL ADVERTISING 16 twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

USFDA introduces intentional adulteration rule As part of its Food Safety Modernization Act (FSMA), the Food and Drug Administration (FDA) has issued a rule requiring organizations producing food for consumption in the United States to address hazards that may be introduced with the intention to cause widespread harm to public health. These food facilities are required to identify significant vulnerabilities and take steps to minimize or prevent them. The rule, the FSMA Intentional Adulteration rule (21 CFR 121) will come into effect in March 2020.

The purpose of the rule is to protect food from deliberate contamination done with the intent cause widescale illness or death to consumers facilities to develop and implement a food defense plan. It applies both to domestic facilities and foreign facilities that export food to the United States.

The FDA has identified several main components to the food defense plan. Food defense plan should contain vulnerability assessments that identifies the most vulnerable points, mitigation strategies (MS) for those points, procedures that ensure proper implementation of MS (including monitoring, corrective actions and verification) along with recordkeeping and training for personnel working at those points.

The FDA-driven legislation could see many Jamaican and other Caribbean firms having issues with their exports if they are noncompliant when the rule comes into force.

Summarized by Rochelle Williams Technical and Regulatory Compliance Manager Technological Solutions Limited rochelle.williams@tsltech.com 876-632-3245

17 SPECIAL ADVERTISING

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

SPECIAL ADVERTISING 18 twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

National Exporters’ Month 2019 THEME: BREAKING BARRIERS, BUILDING BRIDGES Veteran manufacturer and exporter, Gary “Butch” Hendrickson, Chairman and CEO of Continental Baking Company provides business advice to Simone Grant, proprietor of Banyan Catering.

Sharing a laugh at the recent launch of National Exporters’ Month are president of the JMEA, Metry Seaga, Executive Director, Imega Breese McNab and Diane Edwards, president of JAMPRO. Ms. Dionne Nugent (left), JPS Acting Senior Vice President of Business Development; Dr. K’Adamawe Knife, Director for Social Entrepreneurship, UWI; Mr. Jorge Gonzalez, Supply Chain Senior Director, J. Wray & Nephew; Mr. Gary “Butch” Hendrickson, Chairman and CEO, Continental Baking Company and Dr. Derrick Deslandes, President of CASE at the JMEA’s recent launch of National Exporter’ Month at the Terra Nova Hotel.

19 SPECIAL ADVERTISING

THE DAILY OBSERVER Wednesday, May 8, 2019 twitter/jamaicaobserver www.jamaicaobserver.com

SPECIAL ADVERTISING 20

Strengthening Export with JMEA’s International Exhibition, JIE F

twitter/jamaicaobserver www.jamaicaobserver.com THE DAILY OBSERVER Wednesday, May 8, 2019

Brian Pengelley, Immediate Past President, JMEA

ood and agro processing, beverages, fresh produce and tourism lead interest expressed by more than 160 international and local buyer companies participating in the Jamaica Manufacturers and Exporters A s s o c i a t i o n ’s ( J M E A ) J a m a i c a International Exhibition (JIE).

These companies and individuals, based in the United States, Canada, the United Kingdom and several Caribbean countries continue to engage the country’s trade and promotions agency JAMPRO, which has been at the forefront of promoting the 2nd biennial exhibition which will be held at the Montego Bay Convention Centre over three days, from May 30 to June 1, 2019.

The JIE will feature a showcase of over 100 booths displaying over 2,000 quality Jamaican and international products and services including innovations and newly launched items. Friday, May 31 and Saturday, June 1 will be designated as buyers’ days, where suppliers will be paired on a business to business basis. June 1 will also be open and free of cost to the general public for all to enjoy.

The event, which is a global marketplace, provides the platform for strengthening of export and import opportunities with Jamaica’s trading partners worldwide.

Buyers are also showing significant interest in the areas of printing, packaging and labelling; cosmetics and pharmaceuticals; construction and business and other services. In addition, active interest has also been expressed in furniture and bedding, shipping, information technology and communications and the creative industry.

“Jamaica has come to be regarded as the trade and business hub of the Caribbean and the JMEA’s multisectoral tradeshow provides manufactures, exporters, buyers and distributors with opportunities to explore business prospects and transact commerce,” stated chairman of the organizing committee, Brian Pengelley.

At the first staging of the event in 2017, the local and overseas entities that participated in the inaugural trade show benefitted tremendously, signing contracts and making deals with their counterpart buyers and suppliers.

In that year, over 110 booths and 100 international and local buyers participated in the JIE, with over 3,000 persons visiting the exhibition floor.

“The success of the last staging almost two years ago, is still being talked about today. One member shared with me recently that given the minimal investment she made to be a part of JIE, the return was tremendous.

The exposure landed her shelf space in two major local supermarket chains and she attained an overseas buyer from Miami,” said Metry Seaga, President of the JMEA. Pengelley adds that the initial response from prospective buyers augurs well for another successful event.

“The response so far has been very encouraging. There is every indication that the event is playing a vital role in connecting Jamaican businesses with a global network of buyers and suppliers to boost sales and grow their businesses. If Jamaican businesses grow, Jamaica will grow,” Mr. Pengelley said.

Booth spaces for JIE 2019, though being rapidly taken up by exhibitors, are still available for businesses wishing to tap into this global marketplace and boost local and export sales. The JMEA is encouraging Jamaican producers, traders and service providers to tap into this tremendous business opportunity.