Implement new industrial policy for Jamaica

THE EDITOR, Madam: 

The Gleaner editorials over the past few years have advocated for an updated industrial policy to drive the next phase of Jamaica's economic development. When the current National Industrial Policy (NIP) was published in 1996, Jamaica was similarly at an inflection point in its economic life - it had just culminated a borrowing relationship with the International Monetary Fund (IMF) and planned to materially advance its development prospects in the new millennium after structural adjustment.

Three decades later, the broad contours of the policy are still applicable to our circumstances - infrastructure development, social and environmental policy development, investment promotion, enhancing competitiveness and public sector reform. What has changed, however, is the nature of the industries that should be targeted to derive higher value-added economic output.

Among other things, the industrial policy aimed to stimulate investment, productivity and growth in the economy through a strategic, export-oriented focus on five primary industry clusters - manufacturing; agriculture and agro-processing; tourism and entertainment; information and communications technology; and mining and minerals processing. 

These sectors have played a significant role in economic development. In their nascent development during Jamaica's pre-Independence years, mining, manufacturing and tourism drove significant economic activity resulting in the longest sustained period of robust economic expansion in the 1950s and 1960s, with growth rates averaging five to seven per cent over the period. Meanwhile, agriculture remains the second-largest industry by employment, accounting for roughly six per cent of GDP. Despite their positive contribution over the years, these sectors are still largely traditional. 

The last 30 years have witnessed the rise of several new industries, including the Blue, Green, Purple, Orange and Silver Economies, spanning a range of activities. As the global economy continues to evolve, advancements in connectivity, sustainability, and digital technology will give rise to the development of additional industries for opportunities to be exploited. 

Recent IMF data indicates that industrial policy actions have accelerated since the COVID-19 pandemic. This latest embrace is mostly in response to the proliferation of multiple, successive crises since then, with the disruption of supply chains, heightened inflationary pressures, a prolonged period of elevated interest rates, tariff and trade uncertainty, geopolitical tensions and oil price spikes all testing the resilience of the global economy. Countries are increasingly undertaking structural reforms to reduce their reliance on few, vulnerable sectors exposed to volatile external events.

Jamaica is not insulated from these shocks. A renewed focus on industrial policy through economic diversification demands greater attention as the country aims to build further resilience to complement its macroeconomic and fiscal policy reforms.

KEENAN FALCONER