The Logistics Hub: a platform for the efficient flow of business activity

A country’s ability to build and maintain its global competitive advantages -- a country’s competitiveness -- is perhaps the single most important hurdle that we have to address to implement a successful economic growth strategy. As such, the principal approach of Government will be to facilitate and unlock domestic and overseas investments from the private sector through combined strategies that seek to improve competitiveness. This assumes a major policy focus of the Ministry of Industry, Investment and Commerce in the quest to achieve sustained economic growth and improved living standards.

The strategy to position Jamaica as a global logistics hub and the concept of the Global Logistics Hub Initiative (GLHI) within the context of a logistics centered economy features as a key national development strategy and as a bold response to raise Jamaica’s investment profile. Initiatives supporting the unlocking of private sector investments are not limited to large local investors and foreign investors. The logistics-centred economy is therefore, not simply about large infrastructure projects, but it is also about creating a platform for the efficient flow of business activity.

The initiative embraces the wider elements supporting our business reform agenda, the quality standards infrastructure, as well as policies aimed at unlocking the growth potential of the Micro, Small and Medium-sized Enterprises (MSME) sector. The strategy of developing a logistics-centred economy requires that potential “micro-multinationals” are transformed through a sustained programme of capacity-building, and the adoption of globally competitive practices and standards. This means firms becoming ready to enable their integration into global production and supplier networks. In this regard, the GLHI is a strategic anchor for the development of a globally competitive platform for economic growth. A high-performance logistics-centred economy means investors can receive world class services form the public and private sector to get their projects moving quickly, quality goods and services can be traded with ease, and a dynamic economy will be created to generate jobs at an accelerated pace.

As a consequence, the Government has implemented a set of policies to remove impediments to trade and investment. The initiatives, being coordinated by the National Competitiveness Council (NCC) constitute a business reform agenda that is central to improving the business environment in order to facilitate trade and investment. While the export-led growth targeted by the Logistics Hub Initiative requires critical transportation and industrial infrastructure, i.e. hard infrastructure; it is supported by legislative and administrative regimes, so-called soft infrastructure that can speed up the flow of business transactions in a manner that encourages investors to establish businesses in Jamaica in preference to regional and global competitors.

The Logistics Hub Initiative (LHI) is multifaceted. The first approach of the GLHI involves securing several billion dollars of private investment in logistics infrastructure and the upgrading of urban support areas to capitalize on Jamaica’s geostrategic location astride major maritime and aviation routes. Companies whose primary interest is serving the 800 million person Americas market, will be incentivised to choose Jamaica’s special economic zones. These companies will have access to information technologies and systems that are essential to cross–border commercial data flows - the real backbone of the digital economy.  Indeed, ICT has become increasingly important to the functioning of many critical systems supporting the Logistics Hub—communications, port community system, single electronic window, ASCYCUDA, energy, transportation, electrical, water, and banking.

Secondly, the GOJ is establishing a new Special Economic Zone (SEZ) regime to attract large Globally Integrated Enterprises to benefit from Jamaica’s more competitive near shore position in the global value chains. At present, the Ministry of Industry, Investment and Commerce is working to establish a modern integrated policy framework for the operation of Special Economic Zones, which: create sustainable linkages with the domestic economy; promote public-private partnerships, technology transfer, business innovation, entrepreneurship & human capital formation; and are efficient, cost-effective and bolstered by competitive incentives in keeping with international standards for SEZ development and the Vision 2030 - National Development Plan.

And thirdly, implementing logistics centered economic policies and structural reforms that enhance the competitiveness of the economy and enable Jamaica to progress beyond being a pure transhipment point to adding substantial value domestically to goods moving through the hub and services provided in competitive economic clusters. This includes wide scale reforms emanating from the modernisation of government institutions, the quality standards infrastructure and specific reforms such as converting customs to executive agency status, implementing a single electronic trade window.

My supreme confidence of the likelihood of success in the GLHI  is based on recent trends in global indices,  the concrete actions of local and global investors, and our bilateral and multilateral partners that have made independent assessments and have concluded that that Jamaica’s march towards Logistics Hub status will add value to the global trading system. The country is beginning to reap the rewards of targeted high-level investment seeking missions to Europe, Kuwait, Dubai, Singapore, China, USA, Canada, India and Panama during the 2013-2014 fiscal year. Leading global firms have already bid on and/or are implementing some of the planned projects and other private sector projects are in the pipeline. The GLHI concept is fully endorsed by the multilateral financial institutions that are providing technical assistance along with investment and loan funding for its implementation.   Our international development partners, in particular, the World Bank and IDB, have identified specific interventions to be supported over the next four years as part of their respective country partnership strategies. 

Competing in the global economy demands that the domestic business environment be significantly improved to operate at global standards. As a country we cannot make any serious headway in achieving growth unless we are able to build the necessary capacity to meet the demands of the global marketplace. The infrastructure that supports quality standards development and quality assurance also occupies a central place in our drive for competitiveness.  The Ministry of Industry, Investment and Commerce will continue to engage public consultations, the latest exercise being The Growth Agenda and Special Economic Zones (SEZ) Policy Dialogue at the Jamaica Conference Centre on October 6 and 7. It will be a significant gathering of minds, as the Government of Jamaica (GOJ) seeks to build local and international awareness, and to foster a spirit of inclusion among key organisations about the direction of its logistics hub initiative, in order to influence and boost investor confidence with support from our multilateral partners.

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