Kent Gammon

Carpe Diem

Cuba opens up. Jamaica closes down. What American restoration of diplomatic ties with Cuba means to Jamaica economically.

On April 11, 2015, Presidents Barack Obama and Raul Castro shook hands at the Summit of the Americas in Panama, marking the first meeting between a U.S. and Cuban head of state since the two countries severed their ties in 1961.  The restoration of diplomatic relations after four decades is welcome as the Cuban people have suffered enough at the hands of Castro and his regime of communism.

The PNP administration has been cheering the restoration of diplomatic ties between Cuba and the United States with good reason. After Michael Manley walked hand in hand with Fidel Castro to the mountaintop (of debt it would seem) Jamaica’s economy suffered a whopping decline of 22% and the Jamaica Labour Party saved Jamaica from further economic decline. Michael Manley and his party unfortunately returned to power in 1989 and the PNP have dropped the overt socialism dogma with a few exceptions like Dr. Omar Davies declaring in the 2000’s that his party has always been a democratic socialist party to thunderous applause from his PNP colleagues in parliament.

The long history of the PNP and Cuba has been legendary. The recent love fest between the PNP and the IMF is quite new and the dark days of ‘ta taa IMF’ by the same PNP administration and horrendous expensive debt racked up over the period 1990’s to 2007 has at least for the moment been put for the history pages.

But as much as the recent developments between the US and Cuba are welcome the repercussions for us in Jamaica economically are not good.

Cuba could be the new Caribbean superpower in a mere decade

The U.S. trade embargo, which requires congressional approval to be rescinded, is unlikely to be lifted any time soon. And for decades of a trade embargo in place by the US, Jamaica which in the 1960’s was the envy of the Caribbean economically, has today, with no trade embargo by the US, become the poor man of the Caribbean.

It has been my considered view that for Jamaica to really improve economically we need to fix three major statistics in this order:- (1) Crime (2) Energy cost and (3) Labour productivity.

Crime accounts for some 5 billion Jamaican dollars sucked out of the economy and the PNP’s answer to that is to cry literally for ‘divine intervention’.  So much for using brains.

Energy cost has been havoc for Jamaican businesses ever since the PNP signed a secret deal with Mirant in 2001 costing Jamaicans 47 cents US per kWh then and for many years after. Trinidad was at some 12 cents US per kWh at that time and we were expected to compete against them?

Labour productivity has been an intractable problem for Jamaica for decades. Our work force  has it ingrained in their DNA that the employer is the enemy not their partner in building Jamaica.

It doesn’t help employer-employee relations when trade unions go on strike to support lazy workers who fall asleep on the job and when fired shut down the company to protest that justified act resulting in the company relocating in another country.  Many of the labourers on work sites smoke ganja which not only alters their minds but slows them down resulting in budget overruns and missed deadlines.

In Cuba they have negligible crime, low energy cost compared to Jamaica and a more productive workforce. And this folks is despite a US trade embargo for over four decades.

Let us look at some key statistics between Cuba and Jamaica today.

STATISTIC JAMAICA CUBA
1. UNEMPLOYMENT 15.30% 3.60%
2. MURDER RATE 39.3 per 100,000 4.2 per 100,000
3. ENERGY COST 33 cents US per kWh 15cents US per kWh
4. LABOUR PRODUCTIVITY RATIO TO G.D.P 21.3 24.2
5. G.D.P PER CAPITA $8,600 (USD) $10,200 (USD)
6. G.D.P REAL GROWTH RATE 0.50% 1.30%
7. PUBLIC DEBT TO G.D.P 132% 40%
8. GROSS DOMESTIC PRODUCT $24.1 billion $128.5 billion

In every statistical category selected the Cubans are faring far better than we are. And we have had a plus four decades head start in trading with the United States of America and yet we have a pathetic economy to show for it. The missing decades of 1990 to 2007 would put any self-respecting nation to shame yet the PNP wreckers are back at the helm of the economy having wrecked it between 1972 to 1980, 1989 to 2007 and once more from 2011.

I put it to the Jamaican people that the trade embargo between Cuba and the United States will be ended in another decade. What is our government doing to improve our economy so that our children will be better off than we were and better off than our neighbours who are all competing for the same investment dollar.

From what I can see it is to beg and borrow, pray for ‘divine intervention’ and cajole the public sector workers, who have become a major arm of support for the PNP, to agree to poverty wages in the socialist philosophy of sharing the depleting local resources to them from a dying manufacturing sector.

For Jamaica to remain afloat before Cuba’s economy really opens up and sinks the Jamaican economy it needs to get a firm handle on crime. Everyone seems to understand this but no one is really taking the steps to eliminate criminal gangs and criminal cops.

For Jamaica to remain afloat it needs to get serious about energy diversification. We need a local/foreign partnership on a liquefied natural gas technology and a new plant to produce another 360 megawatts immediately.

Jamaica desperately needs a real shot in the arm with new technologies and mega-industrialization and the logistical hub needs to be built now.

But what Jamaica really needs to get its economy humming is visionary, business friendly leaders and the courage to enforce the rule of law so all Jamaicans have a far chance in moving from poverty to prosperity.Obama and Castro

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This entry was posted on August 23, 2015 by in Uncategorized.
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