Kingston, Jamaica – Jamaica’s Minister of Industry, Investment and Commerce, G. Anthony Hylton, has described the focus of the latest World Investment Report on the contribution of global value chains (GVCs) to development as timely and pertinent to Jamaica, as it validates the country’s ongoing efforts to position itself as a global logistics hub and harvest the positive economic impact of GVCs.
Speaking at the launch of the World Investment Report 2013 at JAMPRO on June 26, Minister Hylton noted that a key component of the Jamaica Logistics Hub initiative is the domestic value-added to global value chains. This is significant since 60% of global trade is intermediate goods, where different stages of the production process are located across different countries. He pointed out that the Report’s focus on global value chains represented proof of concept for the Hub.
Hon. G. Anthony Hylton
“The entire objective of the Jamaica Logistics Hub is to participate in the global value chain in ways that drive economic growth, employment and income generation, and to make Jamaica that much more competitive. This report is very relevant to what we are doing, and I hope that it aids persons in achieving a better understanding of what the Jamaica Logistics Hub initiative is all about,” stated Minister Hylton.
In presenting a private sector perspective on the issue, David Martin, general manager of JP Tropical Foods, told the gathering at the launch that successful economies simultaneously increase their participation in global value chains and domestic value added. He noted that all the subsidiaries of parent company Jamaica Producers Group (JPG) are participants in global value chains.
Minister of Industry, Investment and Commerce, G. Anthony Hylton (centre), discusses global value chains with Milton Samuda (left), JAMPRO’s chairman, and David Martin (right), general manager of JP Tropical Foods, at the launch of the World Investment Report 2013 at JAMPRO on June 26.
The World Investment Report 2013, which was published by the United Nations Conference on Trade and Development (UNCTAD) under the theme “Global Value Chains: Investment and Trade for Development”, identified the development contribution of global value chains as significant, and noted that value-added trade contributes nearly 30 per cent to the GDP of developing countries on average. The Report indicated that the prevalence of global value chains in world trade presents developing countries with the opportunity to derive greater profits, wages and retained investment as goods make cross-border journeys from raw materials to finished products.
“GVCs have a direct economic impact on value added, jobs and income. They can also be an important avenue for developing countries to build productive capacity, including through technology dissemination and skill-building, opening up opportunities for longer-term industrial upgrading,” the Report read.
Increased FDI
The Report also indicated that foreign direct investments in Jamaica increased by 66% in 2012. Wendy Lyttle, JAMPRO’s acting president, attributed the increase in FDI to new investments in the information and communications technology (ICT)/business process outsourcing (BPO) and the tourism sectors, as well as reinvestments from existing foreign companies.
Investment projects and the value of these projects in the manufacturing sector fell significantly, while the services sector gained in FDI share, replacing manufacturing as the largest recipient of investments in 2012.
Minister Hylton stated that the shift from manufacturing to services should not be a cause for alarm, and dismissed any notion of a dichotomy between both sectors. He explained that manufacturing and services should not be separated, as one leverages the other and makes the other more efficient. The Minister expressed his optimism that the growth in FDI experienced by Jamaica will continue as the government maintains a path to greater development.
“The 66 per cent growth in FDI is just the beginning. We have the right mix of policies and we have the correct concept. What we need now is to stop debating and get to the business of implementing key initiatives such as the Jamaica Logistics Hub,” stated Minister Hylton.
