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PRESS COPY
Notes for Address
By
Prime Minister
Rt Hon P J. Patterson, P.C., Q.C., M. P.
at the
JMA/JEA EXPO 1994
CHECKAGAINST DELIVERY
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Wednesday March 16, 1994
National Arena
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Salutations
I. INTRODUCTION
The staging of the JMA/JEA EXPO has become one of the major events on the Jamaican biennial
calendar. Each renewal of this EXPO is proof that the patrons and exhibitors have benefited from the
exercise and therefore found it worthwhile to do it again.
By the nature of such events, the general public looks forward to the entertainment and the opportunity
to view with pride the high quality and range of products made in Jamaica.
Even more important is the opportunity it provides for the members of the ]MA and the JEA to showcase
their products to local and overseas buyers.
I am pleased to see that this year the number of overseas buyers has jncreased.
II. THE GLOBAL TRADING ENVIRONMENT
Today, we operate in an increasingly competitive global marketplace. There is a marked decline in
world trade of the traditional primary products which formerly provided a major share of export
earnings. We can no longer rely on arrangements that afford special protection because of historical
relationships. Our goods must be able to meet the requirements of fierce international competition.
We have recently witnessed the European Union, the ratification of the North American Free Trade
Agreement (NAFT A) and the successful completion of the Uruguay Round-These signal the beginning
of a new era of an open and competitive world economy.
Within CARICOM, we are seeing progress in economic liberalization. The Common Extemal Tariff is
being gradually reduced to bring it more in line with a global trend thatwillnotcountenance inefficient
industries behind the protection of high tariff barriers.
I am particularly pleased at the participation here of our Caribbean friends. Today's international
economy, the constraints of our siz.e and resources dictate that it ts better to work together than perish
separately.
And so, as we face the issues of obtaining parity for CBI countries, the review of LOME IV provisions
at mid-term, and preparing for the advent of the World Trading Organization, CARICOM will pursue
our interests in common. So too we are unified in seeking to be listed as eligible for NAFT A accession.
We all share the belief that NAFT A will create new opportunities for expansion of trade in the
hemisphere.
We recognize, however, that some individual member states, are presently more advanced in their
preparedness and there may need to be different timetables and provisions to accommodate our
particu.1.aI interests.
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Ill JAMAI'2A/U. S. RELATIONS
In this connection, Jamaica is well on track. Jamaica has just concluded bilateral trading arrangements
with the United States that can serve as a model for other CARICOM countries.
We have recently signed a treaty for the reciprocal encouragement and protection of investment and
have now concluded an agreement for the protection and enforcement of Intellectual Property Rights
with that country.
The Investment Protection Treaty se~ up reciprocal rights and duties for both Jamaica and the United
States. In the same way that it protects U.S. investments in Jamaica, it also protects Jamaican investments
in the United States.
rv. OTHER TREATIES
We attach great importance to the creation of investment and trade links with the widest range of
countries in order to maximize invesb:nent and trade opportuni.ties. And so we have concluded
agreements with China., Argentina, and soon with South Korea.
An official mission from Colombia is presently inJ amaica negotiating a trade agreement on similar lines
to our agreement with Venezuela. Our exporters must take advantage of these new openings.
V. INDUSTRIAL DEVELOPMENT
Much concern has been expressed about the ability of our industrial sector to keep pace with modem
developments, to hold our own in this technological age and to meet the challenges in the new global
environment in the fast approaching twenty-first century.
Admittedly, OUl' industrial structure is .fragile. It was developed in an era of high levels of protection
for manufacturing and weak national and regional competition.
This calls for bold new thinking, careful planning and, most of all, for action.
Since taking office, this Administration has embarked on a comprehensive programme of transformation
to a market economy.
We have introduced legislation to modernize our financial sector.
We have liberalized foreign exchange. We have removed trade barriers and price controls. We have
introduced the G.C. T. in order to favour production rather than consumption. We now have to exercise
the discipline to stabilize the exchange rate. Selfish speculation by the greedy few will ruin us all. This
is not the responsibility of the Government alone. It is the responsibility of every Jamaican.
The fact that Jamaica is now current with all our debt payments and that there are no substantial debt
private atTears is a great achievement. Jamaica's credit rating abroad has never been higher.
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This indicates progress. Let us strive harder to achieve similar improvements in other areas of the
economy.
Last month, I announced a number of measures to address not only demand management but also
measures which were aimed at expanding investment and production. -
Cabinet has approved that
• Effective April 1, rates of duty in the Common External Tariff will be revised
and reduced from 5 per cent to zero on specified categories of raw materials. i.e.
non<ompeting primary inputs and non-competing intenned;ate inputs. This will
provide a level playing field for our entire manufacturing sector_
Yesterday we began debate in the House on a Bill which will :
• Allow the manufacturing sector to accelerate depreciation of machinery over
two years. This is a significant incentive which will address plant modemiz.ation
with.in the sector and allow for the speedy adoption of new technology.
• It will also allow a tax credit of 25 per cent on the nominal value of bonus shares
issued from the profits of a company to expand its equity base. This will enable
companies to accumulate capital at a faster rate, while reducing their reliance on high
debt cost financing.
Since my presentation in Parliament, when I intriduced new measures to fine tune the foreign exchange
market has shown much greater stability. Inflows have increased, the rate is relatively stable, the gap
between the unofficial market and the inter-bank market has narrowed. At the same time, the Bank of
Jamaica has maintained the level of purchases to allow it to meet debt obligations while maintaining
positive Net International Reserves.
There have been many days recently when the rate of the Jamaican against the US dollar appreciated
without negative impact on the level of inflows.
Inflows to the inter-bank foreign exchange system have increased from an average daily intake of US
$2.2 million in the first week of December 1993 to about US $4 million currently.
The Net International Reserves of the Bank of Jamaica have remained positive. The NIR now stands at
US $33.4 million.This is even after meeting some very large debt payments during February. Most of
these payments were met by the Bank's direct purchases from the foreign exchange market through it's
Trading Room.
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VI. INDUSTRIAL POLICY
There has been some public debate about the finalization of a national ind~trial policy which we all
accept as necessary to provide a favourable framework fot investment and production. While we
cannot ignore the local market, the emphasis must be on those sectors of the economy that have the
potential to become internationally competitive.
The ultimate goal of such a policy is to contribute to self-sustained growth and development and to
create an environment in which the Jamaican economy \\ill be a dynamic and competitive player in the
global economy in the twenty-first century.
The successful implementation of an industrial policy will require close co-operation betw'eenall sectors
of the society, most particularly the Government, the private sector and organized labour.
The development of the policy is being approached in stages. The immediate objective is to increase
export earnings by removing short-term constraints on major industries. At the same time., work must
begin on developing the long-term potential of our industrial sector.
A policy document addressing the immediate issues of production in all areas of the economy is now
ready for consideration by our Cabinet retreat which begins tomorrow. It follows many months of
consultation and discussion which involved a number of groups, including the JMA and the JEA.
In addition to providing basic pre-requisites for efficient investment and production, it will seek to
identify areas of production that are likely to contribute to the long-term growth and development of
the Jamaican economy.
Besides the usua1 process of Parliamentary debate, there will be a mechanism for public discussion of
the document.
It must be realistic and not simply a wish list that reads well. It must have sped.fie targets and a clear
time .frame.
It will be part of an ongoing process of national dialogue involving all groups.
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VII. CONCLUSION
While I have concentrated my remarks this afternoon on matters that directly affect trade and industry,
it would be fatal to believe that any sector can operate successfully in our prevailing social environment.
The industrial sector does not operate in a varuum. Every sector is equally affected by the prevailing
social envirnnment.We all need to address values and attitudes, indiscipline, individualism and
materialism.
I make no apology for saying once again that prevailing attitudes have left a most debilitating mark on
the economy and on our capacity to achieve balance and self-sustaining growth.
I repeat that a market-driven economy will not survive for long if it results in the undue concentration
of wealth in the hands of a few; or if the economic base is not sufficiently broad to attract new
entrepreneurs.
As we struggle to increase production, industrial conflict must give way to industrial cooperation and
partnership. Productivityisafunctionof attitudeandcostisafunctionofproductivity. Youhava.naverriding
interest in increasing productivity.
Last month we he]d the first National Consultation on Values and Attitudes which inspired a positive
response from a wide cross--section of our society.
Within the next few weeks, despite the heavy schedu1e that the national Budget will demand, the
regional consultations will begin, starting in Mandeville on April 7 and moving on to the Northern,
Central, Eastern and Western regions.
I am counting on the support of all sectors including the private sector in participating in these
consultations so that we can develop and begin to implement a programme of action.
The Government is ready to play its lead role in helping the country reach its full potential by
encouraging a dramatic change in standards of conduct and moral values. I expect you to play your part.
I wish you a successful EXPO '94 and the JMA and the JEA the success that will help us build a strong
nation that offers opportunity for the economic, social and spiritual growth and development to which
we all aspire.
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