Honourable Derrick Kellier, CD, MP, Minister of Labour and Social Security
Jamaica Employers’ Federation 31st Anniversary Convention
Sunset Jamaica Grande Resort, Ocho Rios, Jamaica, May 2, 2013
I am very delighted to be in the company again of critical stakeholders in the Jamaica Employers’ Federation (JEF) and to have been invited to deliver the opening address at this year’s convention. I especially want to extend my own very warm welcome to all participating overseas delegates representing the Caribbean region as a whole.
Permit me also to recognise the participation in this Convention of members of the TACKLE Project and the Child Labour Division of the Ministry of Labour and Social Security. Their partnership with JEF throughout the duration of this Convention is a sensible one given that the issue of child labour straddles the gamut of every area of national life and is deserving of serious attention if it is to be eliminated.
It is my sincere hope that each and every one participating in this year’s Convention will be truly energized as a result of the deliberations and recreational activities that are to come over the next three days.
Mr. Chairman, ladies and gentlemen, the theme of this year’s Convention is of more than passing relevance. “Energizing for action – our cause, our call!” suggests preparation as senior managers and marketing executives towards development objectives that can benefit our respective countries and, by extension, the Caribbean archipelago.
But, in preparation for what I would say to you today, it dawned on me that I should start by contextualizing the theme of this year’s Convention against the background of a discussion about one of the most pressing development issue of our time, namely, that of productivity and the need for us to revolutionise our approach to it.
As an issue of burning concern, ladies and gentlemen, productivity happens to be at the heart of any strategic action we will contemplate for the future, whether at the level of the firm or the country. For if we do not seek to put drastic improvement in productivity at the centre of our concerns to energise for action in respect of the opportunities before us, then success for growth and the full development of our potential will continue to elude us.
I agree with the notion that a great deal of time has been spent by business enterprises locally and regionally, preparing the groundwork to make the best of the opportunities for investment and growth in the foreseeable future, once the current recession have passed. But I want to suggest that unless we treat the issue of productivity improvement as the glue that will hold our ambitions for growth and development together, the dough of progress and prosperity will not rise.
The evidence in support of this point of view is irrefutable. To begin with, locally, the Jamaican economy has been plagued by negative productivity growth at the national and sectoral level over the past four (4) decades. Research done by the Jamaica Productivity Centre (JPC) within the Ministry of Labour and Social Security shows that, between 1972- 007, our labour productivity has been declining at an average annual rate of 1.5 percent since 1973.
Similarly, total factor productivity – i.e. productivity involving labour, capital, energy, etc – has declined by an average annual rate of 1.74 percent over the same period.
The upshot of this has been slow and low growth in the Gross Domestic Product (GDP) and literal stagnation in the GDP-per capita, or the standard of living, for most Jamaicans. But – and this is important ---- Jamaica is not the only country in our region so affected.
For while countries like Barbados, Chile, Costa Rica and Brazil managed to establish their National Productivity Organizations (NPOs) in the 1990s – compared to the establishment of our own in 2003 – the fact remains that these Caribbean and Latin American countries are still far behind countries in Eastern and Southern Asia in performance.
The reason for this, I submit, is related to the fact that countries in these parts of the world launched their national productivity organizations way back in the 1960s, and as a result, by the 1970s, 80s, and 90s, they were experiencing impressive productivity growth with corresponding high gdp and gdp- per capita growth rates. Furthermore, so successful has been the experience in these countries in Asia that their growth in GDP has been catching up with those of the rich industrialised economies of the world.
On the other hand, ladies and gentlemen - and by sharp contrast - our productivity and GDP growth in Latin America and the Caribbean has been falling behind not only those of the rich industrialized countries, but also that of Asia.
Now, what can we reasonably deduce from this? For one thing, we can deduce from this body of evidence that the tri-partite movement – labour, management and government – have a crucial role to play going forward in reversing productivity decline and accelerating economic growth.
Secondly, as the tentacle of globalization deepens, productivity improvement will become increasingly important to our competitiveness and our further integration into the global economy. Hence, if we want to grow our output and trade so as to take advantage of the increased competition offered by globalization, then we must pursue those strategies designed to improve productivity and competitiveness of those industries supplying local and international markets.
In the long-term for Jamaica, as for the entire Caribbean, the productivity improvement is essential to creating more jobs through growth from new investments, and to sustain the growth in jobs in the face of increased competition. My perspective, going forward, is that - whether we like it or not - we are experiencing a paradigm shift in our appreciation of what is required to transform our challenges of development.
This is why a forum like this one is important. It brings together a broad cross-section of business professionals to talk energetically and strategize, not only about the constraints facing our societies, but also about the options and direction for growth we must ultimately confront.
Presently, the Government of Jamaica has put in place policies to achieving a more business- friendly and investment-friendly economy, driven by a more efficient public sector body. Additionally, it wants to put in place the appropriate measures for guaranteeing that most of the taxes due are collected, and that there are no cost over-runs on public contracts.
On the infrastructure side, we propose to expend capital on infrastructure projects across the island encompassing, among other areas, housing and drainage rehabilitation. We further propose, by 2016, to privatize the Kingston Container Terminal, the Norman Manley International Airport, the Jamaica Railway Corporation, and Caymanas Track Limited.
The Information Communication Technology (ICT) Sector will see significant improvement as well, and the number of agro-parks across the island will be increased along with a reduction in energy costs.
I mention these aims and objectives of the government, ladies and gentlemen, to underline our commitment to:
- Reducing our debt to GDP ratio from the current level of 140 percent to 95 percent of GDP by 2020
- Reduction of the public sector wage bill to nine percent of GDP by 2016.
Success in this endeavour, is going to rely on the energized collective effort for action of most of you who represent the traditional players in the economy in face of the potential inherent in the economic expansionary policies of the Government. As a consequence of various sequences of history, we now find ourselves having to play “catch up” in an unusually tough economic environment.
But our options both in Jamaica and the region are limited. Therefore, in this changing environment, if we do not change the way in which we work, we risk becoming increasingly irrelevant.
In this, leadership will become increasingly important; and the requirements for leadership today are much broader, more demanding and require more flexibility. This is why - as leaders - we need to be constantly learning, changing and innovating. We need to constantly renew our understanding of the possible solutions to the problems that we face, as we try to improve the lives of our fellow citizens.
In the final analysis, it is our cause! It is our call! As Bob Marley said, “none but ourselves can free our mind”.
A critical component of this process of renewal is to have open frank discussions among ourselves about the changes we need to make to survive and compete successfully in the global environment. I read this Convention to be offering such an opportunity as we look expectantly and collectively down the road of the 21st century.
Mr. Chairman, ladies and gentlemen, I, therefore, wish you well in your endeavours in the certain knowledge that if you energise for action on the basis of the opportunities before us, our respective societies can – and will --- achieve prosperity to the long-term benefit of all who reside in them.
Thank you for your kind attention - and do have a productive 31st Anniversary Convention.
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