Projects

Drivers of hidden costs identified in the study were:

n  The absence of an adequate pool of skilled recruits: This has led to manufacturers having to make a significant investment to employee education and training, to ensure that entrants to the workforce can perform on the job. This lack of preparedness by entrants to the workforce is seen as a reflection of Jamaica’s education sector, and the limited opportunities for technical/practical training in the vocational education sector.  It has been recommended that the JMA’s working relationship with the HEART Trust/NTA be focused on certifying “on the job” training activities to complement classroom-based certification programmes. This process has begun as the JMA has an excellent working relationship with HEART and is currently collecting data on the training needs of the manufacturing sector to facilitate the customization of programmes for the sector.  

n  Crime and violence: As is well known, the crime situation in Jamaica has an adverse impact on productivity in many areas of the country.  This particularly affects manufacturers who cannot operate an effective shift system, or if they do, they incur special transportation and security costs to safeguard employees travelling to work after dark.  The JMA seeks continued dialogue with the Ministry of National Security in the formulation of an Industrial Security Strategy focusing on the issues that affect the productive sector.

n  Bureaucracy: Despite the Government’s efforts to improve its systems, there is still a high level of bureaucracy in many of the regulatory processes employed by the public sector.  Not only does this impact on the efficiency of the sector, but also create opportunities for abuse and corruption.  The JMA supports efforts to rationalize systems, and encourages the greater use of technology to simplify business processes and strengthen controls.

n  Lack of “joined up government”: In a related concern, manufacturers highlight the lack of “joined up government”.  Time is Money is a recurring theme in the study, and the necessity of visiting multiple agencies to carry out a single transaction means that significant amounts of non-productive time are spent “on the road”.  The JMA applauds the Government’s initiative to create One-Stop Shops, and looks forward to the application of this concept across the public sector.

n  Outdated Legislation: Several instances of out-dated laws and regulations were highlighted in the study, which include user fees, license fees and other regulatory costs.  Many of these charges are no longer relevant in today’s economic conditions, and impact on Jamaica’s competitiveness.  Indeed, the Prime Minister’s recent Economic Stimulus Package removed Customs User Fees, which is a clear recognition that the cost of doing business in Jamaica must be rationalized.  Work is taking place in these areas through such initiatives as the USAID-sponsored “Legs and Regs” Project, but the process of modernization must be accelerated and broadened to optimize Jamaica’s competitiveness.

n  Poor Utility Service: The leadership of the JMA has already expressed alarm at the current high cost of energy and potential hikes in electricity cost.  The Hidden Costs Study also draws attention to the quality of service provided by the utility companies and the problems brought about by disruptions in supply.  The study points to the requirement for additional capital investment in such items as power conditioning equipment and water purification plants.  The manufacturing sector is very open to the concept of alternative energy systems, and recognizes the Government’s initiatives in this area.  However, recent experiences have shown that attention will have to be paid to lessening the cost of importing such equipment and integrating such systems with the public utility services.