Blockchain technology: a sustainability tool for agriculture

Block Chain Technology and Its Impact on Agriculture: Moving Towards Sustainable Agriculture, an amazing title for an amazing assignment by one of my students at Excelsior Community College in Kingston, Jamaica. My student Michelle Williams is reading for the Post Graduate Diploma in Logistics at the School of Business Management and Entrepreneurial Studies explains:

Blockchain technology will help a farm or a nation to determine how sustainable their agricultural industry is as it accurately records information.”

For her engaging assignment can be please click here or read below.

Block Chain Technology and Its Impact on Agriculture

 

The Assignment
The ability to not only collect but to analyze, visualize and weave data together into a compelling story is a powerful skill in today’s information age. What is more, data analytics and data visualization fields are emerging fields that are increasing in prominence in media outlets, governments, in business, etc. Therefore, individuals or organizations that develop this skill set have the ability to distinguish themselves by being able to tell their stories in visually compelling ways. There are several, free and paid, internet-based applications that let authors combine beautiful visualizations with narrative text, images, videos and social media – in this case Adobe Spark. The applications are designed to be attractive and usable by anyone, which makes them great for education and outreach, either to the general public or to a specific audience.

The Task
The assignment is to create graphically appealing story supported by research using the Adobe Spark platform by creating a Page. The subject is as follows: How block chain technology could be used to improve the sustainability in a particular industry, sector, product or business. Please note the students were free to select a particular industry, sector, product or business. In effect they are creating or suggesting an architecture for the use of block chain technology in the implementation of sustainability measures in an industry, sector, product or business that was of interest to them.
It is also important to note that block chain is on the cutting edge and putting them together with a sustainability frame work is very original and innovative.

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Jamaica’s Special Economic Zones: Form, function, and model

Special Economic Zones (SEZs) come in a variety of forms, names and functions – Free Trade Zones, Free Zones, Export Processing Zones, Enterprise Zones, etc. These reflect a government’s priorities and positioning of its economy. However, what unifies them all is that they are development tools used by governments to attract, and facilitate investments that act as catalysts to diversify whole or targeted segments of their economies.

Special Economic Zones Defined
While Special Economic Zone (SEZ) come in a variety of configurations they generally have six common features:

  1.  A geographically defined area that is usually fenced in.
  2. Is under a single management or administration.
  3. Flexible and streamlined business regulations.
  4. Businesses operating within the zone are eligible for benefits (tax incentives) from being located in the zone.
  5. Support infrastructure that is designed to optimize the operations of businesses. Additionally zones are located proximate to key transport infrastructure such as port, airports, highway interchanges, that are used to facilitate the business operation of the zones.
  6.  The zone is considered a separate customs area.

The Purpose of SEZs
SEZ framework for hub

The general positioning of modern special economic zone regimes is their use by governments as a strategic tool in a larger economic development strategy or plan.  SEZs, for Jamaica, are a tool within a larger logistics hub development model that is being used to grow the economy through industrialization. As a tool within a larger growth strategy, Jamaica’s SEZ regime is designed to improve Jamaica’s competitiveness and create jobs, attract business and capital.

The activities within the SEZs are aimed at fully integrating the Jamaican economy into the global production and distribution systems that rely on global value and supply chains. This complex and dynamic system, at the heart of globalization, places Jamaica at a critical intersection of global trade, investment and services. In a globalized environment companies face several conflicting demands simultaneously, for example there is an equal drive to both centralize and decentralize production and distribution. Additionally, companies must balance global and local demands at the same time in the sense of being able to produce and distribute worldwide but at the same time adjusting product specifications through postponement to meet the local taste of consumers through customization.

Jamaica’s Global Logistics Hub, largely through its SEZs, creates a platform where global trade, investment and services will intersect and interact. The SEZs provide the ideal one stop shop location for meeting the simultaneous, and often conflicting, demands of the marketplace in a flexible, efficient and reliable manner.

Free Zone to SEZ: a new policy direction
The name change from Free Zone to SEZ is not a simple matter of form over substance. The SEZ concept is a deliberate policy break away from past policy and is intended to send a clear signal to the investor community (domestic and international); the multilateral lending agencies; and the WTO that Jamaica is moving in a new policy direction.
The Free Zones of the past were largely export processing zones reliant on non-World Trade Organization (WTO) compliant export performance fiscal incentives, the SEZ on the other hand move beyond export processing and is fully WTO compliant.

The Jamaica SEZ model
SEZs are purposed built and fully serviced sites aimed at improving the competitiveness of manufacturing and services. They are founded on the principles of improving efficiency, clustering of complementary value added services, and seamless integration into the global value chains, low corporate taxation and a business friendly environment.
These principles, however, are not self-applying. They have to be implemented systematic and this is where the Jamaica Special Economic Zone Authority (JSEZA) comes into play. JSEZA is the government body charged with regulating, monitoring, supervising, promoting and facilitating investments in SEZs in Jamaica. Through the work of JSEZA SEZs investors will facilitate and be facilitated by:
a. Developing world class industrial infrastructure, supported by world class transport infrastructure (road, rail, airport and ports) that function as trade facilitators;
b. Competitively priced energy;
c. Increase cargo flows through increased transshipment throughput; increased imports as inputs into production (SEZ and domestic); and increased exports as semi or finished goods (SEZ or domestic) that have the Made in Jamaica label;
d. Optimize and analyzing cargo flow information to seek out, attract and manage higher value-added logistics activities; and
e. Create backward linkages to the rest of economy through our Micro, Small, Medium Enterprises (MSMEs) through the sourcing of domestics raw materials as inputs into production and by subcontracting of local service providers.

As such Jamaica’s SEZs will be focused less on fiscal incentives and more on providing a platform to meet the efficiencies demanded by the global marketplace. Central to this are ‘soft’ -using government services as – incentives  inherent in regulatory relief such as expedited investment, construction, work permit approvals, and streamlined and efficient Customs inspection. The move to place greater reliance on business and trade facilitation reflects not only international best practice but also reflect a growing global trend of governments using their regulatory functions as services to investors, in effect non-fiscal incentives.

WTO compliance
The WTO prohibits subsidies in particular export performance and local content subsidies. Under its WTO obligations Jamaica has phased out its offending subsidies and has gone as far as repealing its Export Free Zone Act and replaced it with the Special Economic Zone Act, 2016.

Fiscal incentives
Generally the incentives offered under a SEZ regime will not be considered to be subsidies provided that the benefits are not focused on export performance, the use of domestic content, not set up to primarily benefit a specific industry or business, nor for the maintenance of foreign exchange balances. The new SEZ regime’s fiscal incentives focus therefore includes lower corporate income tax, duty free importation of raw materials and no General Consumption Tax (GCT) on electricity and telephone services. Jamaica has gone further and followed global best practice and included performance based mechanism such as employment tax credits for job creation that facilitate the lowering of the corporate income tax rate.

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Jamaica’s special economic zone framework designed to support private sector SEZ development

Its always a good idea to review your past work and accomplishments from time to time, you just never know what you will find.  Such a review brings to mind the old adage what is old, is new; reviewing after some time gives you perspective and at times new insights. Conducting such an exercise led me to remember my participation as a panelist in 2014 on a Government of Jamaica policy dialogue: Jamaica’s Growth & Special Economic Zones Policy Dialogue. Some how I posted an article on my LinkedIn but not on Commercial Law International. What an oversight!

This oversight on my part has come to be a blessing in disguise as it allows me an opportunity to put out an article on Jamaica’s special economic zone (SEZ) policy and legislative framework, with particular focus on attracting private sector investment. This is especially timely given the continued roll out of Jamaica Special Economic Zone Authority, the Government of Jamaica’s, agency charged with regulating and attracting investments to zones in Jamaica.  While this piece is a bit dated it never the less provides in brief some useful insights, in particular for the private sector, into the policy and legal framework of SEZs in Jamaica.

Enjoy.

I was honored to be siting on the Private Zone Development, Joint Ventures and PPP Panel discussion today. Maybe its the nerd, sorry, I mean lawyer in me that gets so excited to talk about Special Economic Zone development models….its all about structuring the deal.

Me (Ainsley Brown) deep in preparation before the panel discussion

Me (Ainsley Brown) deep in preparation before the panel discussion

Please see the session brief below:

The Government of Jamaica (GOJ), in an effort to preposition itself in the world as a Global Logistics Hub, has identified Special Economic Zones (SEZs) as a key policy tool in achieving this objective. The main focus of SEZs is to attract foreign direct investment, diversification of the Jamaican economy, job creation and the increase in value-added exports. Policymakers are aware of the fact while economic zones bring about economic growth; they are not limited within themselves. The real value of economic zones depends on their ability to stimulate widespread growth through linkages with the domestic economy and to catalyze nationwide reforms by serving as pilots.

Drawing from numerous examples of successful SEZs around the world as well as Jamaica’s own experience with its existing Free Zone regime, the GOJ, is acutely aware of the potential direct and indirect impacts that could be realized by developing a modern SEZ regime as a tool for sustainable and globally competitive economic development. The GOJ, in order to realize the SEZ potential, has launched an effort to develop a new SEZ policy regime for Jamaica based on good economic and social practices in their operation and commercial principals in their development and management. Considering the vast investment potential of SEZ’s in Jamaica, the GOJ appreciates the importance of understanding the relevant economics, structures and processes that drive the successful implementation of SEZs. In this regard, the GOJ places great significance on the role of the private sector in SEZ development.

Given GOJ’s funding constraints, namely under the current IMF Loan Programme, the SEZ Policy encourages the private sector to play an active role in the Jamaican Special Economic Zones. The Policy envisages public private partnerships (PPP), joint ventures (JV) and private zone development in the development and operation of SEZs. This offers the potential for a number of different models. However, developing SEZ under PPP and or JV model has several commercial complexities as both the public and private sector need to bear some roles and obligations.

Greater involvement of the private sector in the development of zones reduces the burden placed on public resources and increases the efficiency of zones by allowing them to operate under market mechanisms. International experience reveals that a significant number of governments developed and managed zones have been less effective than their private counterparts. In order to facilitate private development of zones, an appropriate legal, regulatory and institutional framework should be in place. The Government’s main role would be to regulate economic zone activities, promote the zone regime, and aggressively identify, assemble, and make available land suitable for development through PPPs or JVs or private development.

Purpose of the session

Panelists will discuss the mechanisms to encourage and facilitate SEZ development in Jamaica (PPP, JV or private). The viability of any SEZ due to the highly capital intensive nature of their development, is dependent on finding adequate and appropriate types of financing to support a deal structure; panelists will discuss structuring and financing deals in PPP, JV or private infrastructure development.

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The G20 Young Entrepreneurs´ Alliance — a strong international voice against youth unemployment

This article was first published in the official B20 Summit 2017 publication “G20 Executive Talks Series”.

What is the result of a combination of low rates of growth, high level of youth unemployment and an increasingly younger population in a country? An increasingly troubling economic outlook! That´s what the G20 members have faced for the past several years and in parts still face today. Therefore, the question that has to be answered is this: what policies can G20 governments adopt to address youth joblessness and disengagement and as a result encourage growth in their countries? Many economies that are rapidly developing face the challenge of finding work for large numbers of young people who will soon enter the workforce. Who can provide an answer to the challenge of youth unemployment?

That is the moment of the G20 Young Entrepreneurs´ Alliance (G20 YEA). The G20 YEA is a global network of 500.000 young entrepreneurs and the organisations that support them. The idea of the Alliance was born at the 2009 G8 Summit in Italy and was initiated after an invitation by the former Canadian Prime Minister Stephen Harper at the G20 YEA Summit 2010 in Toronto. At this Summit, participants determined entrepreneurship as the main force to combat the high levels of youth unemployment and as a result contributed to a communiqué that identified 5 key barriers that discourage young people from starting their own business and therefore enable them to escape the trap of youth joblessness: excessive regulation and taxation, even in a very early stage of a business; inadequate or inefficient coordination of many of the forms of support that are available; social attitudes that discourage risk-taking or stigmatize failure; the need for specific entrepreneurial education in schools and universities and access to funding to support start-ups and early-stage business growth.

Over the years, these five barriers became the pillars of the work of the G20 YEA and are prominently featured in the themes of every annual G20 Young Entrepreneurs´ Summit, always held in the same country as the G20 Summit. These unique events bring together hundreds of young entrepreneurs from the G20 countries, carefully selected by each member organisation.

To move the causes of youth entrepreneurship and the fight against youth joblessness forward, the G20 YEA became on one hand engaged with the G20 and their leaders and governments in a very early stage. Following the invitation in 2010 by the Canadian Prime Minister, in 2012 Mexican President Filipe Calderon met with more than 200 young entrepreneurs in his residence in Los Pintos and in 2017 at the G20 YEA Summit in Germany the guests at the Summit will include the Federal Minister for Economic Affairs and Energy, Mrs. Brigitte Zypries.

On the other hand, the relationship with the B20 (Business 20) was especially fruitful. The G20 YEA´s 2013 Moscow Summit was the first substantial engagement of the G20 YEA in the B20 and resulted in the inclusion of language on youth entrepreneurship in the subsequent G20´s Saint Petersburg communiqué. The G20 YEA´s 2014 Sidney Summit created a global action plan for young entrepreneurs and the G20 YEA´s 2015 Istanbul Summit yielded a commitment in the G20 communiqué at Antalya that year to “support the better integration of our young people into the labour market including through the promotion of entrepreneurship”. Finally in 2016 members of the G20 YEA began to work in the B20 Task Forces, encouraged by the Chair of B20 China, which resulted in 2017 in an open invitation by the Chair of the B20 Germany for the entrepreneurs of the G20 YEA to become even more involved in the B20 Task Forces. In addition, the G20 Young Entrepreneurs´ Alliance was appointed a “networking partner” to the B20.

The story of the G20 YEA continues in 2017, at the G20 YEA Summit in Berlin from 15th to 17th of June, hosted by JCI Germany (Wirtschaftsjunioren Deutschland, www.wjd.de) and their G20 YEA President Germany Carsten Lexa. More than 500 young entrepreneurs from the G20 countries will gather to share with the G20 leaders their ideas on the future of business, on how digitalisation will change the way to do business worldwide and on what can be done, from the perspective of young entrepreneurs, to create growth and employment opportunities, especially in the context of a more and more connected world. Information on the G20 YEA Summit 2017 can be found here: www.g20yea2017.com.

The fight against youth unemployment will not end for the G20 Young Entrepreneurs´ Alliance any time soon, especially in times where the idea of open borders to create worldwide wealth, growth and jobs and the advantages of this idea are questioned. Fortunately, young entrepreneurs have an unending willingness to do, be and learn more, they don´t accept the status quo and they want to change things that they think needs to be changed. And: they are not only crazy enough to think they can change the world — they do!

Carsten Lexa is the President of G20 Young Entrepreneurs´ Alliance Germany and the host of the German G20 YEA 2017 Berlin Summit (link to the Summit website). A corporate lawyer by profession and equipped with his own law firm (link to the law firm website), he advises international clients, who want to do business in Germany, in corporate and commercial legal matters. He is, by invitation of the European Commission, a participant in the annual SME Assembly. He is also a member of the B20 Task Forces and since 2014 a member of the national board of JCI Germany (WJDWirtschaftsjunioren Deutschland), the biggest organization for young leaders and entrepreneurs in Germany.

Interested in more information about Carsten Lexa? Follow him on Twitter (kanzlei_lexa), “like” the Facebook fan page (kanzlei.lexa) or visit the blog (Link).

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Is it legal to pay a woman a different salary than a man for equal work?

‘Equal pay for equal work,’ well it ought to be. And the operative word here is ought and it would appear that at least in one court in the United States  it ought not to be.

The 9th U.S. Circuit Court of Appeals rules that it is OK  legal  to pay women a different salary for the same work as a man.  Yes, really!!  The Court overturned a lower-court ruling which had stated that pay differences based exclusively on prior salaries were discriminatory under the US federal Equal Pay Act.

To my mind this is a poor ruling. Long and short: let’s continue discrimination because someone else already started it. Where is the justice? Forget justice, where is the logic?

 

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Top 10 best reads to understanding Jamaica’s SEZ Regime

Here are the top ten best reads to understanding Jamaica’s Special Economic Zone Regime and the mandate of the Jamaica Special Economic Zone Authority.

Top 10 best reads to understanding Jamaica's SEZ Regime

 

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How G20 nations can help young entrepreneurs with their businesses

Looking at the latest media coverage, one comes to the conclusion that it is “en vogue” to be an entrepreneur as a young person. In fact, digitization offers young people as many opportunities as ever to start a business and to do business, even across borders. Governments and organizations are also happy to make contact with young entrepreneurs and meet with them in order to appear as “hip” as possible. In reality, however, entrepreneurs, and young entrepreneurs in particular, often face great challenges. After all, economic and entrepreneurial activitie are often conducted any more only on a global level, that means across borders, and the same applies to competition: young entrepreneurs are increasingly focusing their business and its growth on the opportunities that arise not only in their own country — “go global” is today’s claim! However, this creates new obstacles which cannot be eliminated by one state alone.

The voice of this new generation of young entrepreneurs has been since 2010 the G20 Young Entrepreneurs’ Alliance (G20 YEA), whose members are the most important young entrepreneur organisations in the G20 countries. Once a year, their representatives meet in order to discuss problems, obstacles and success factors — also from their own experience — and to develop demands that are presented to the governments of the G20 countries as to how international young entrepreneurship can be better supported.

But what are the central demands of the G20 YEA to the governments of the G20 countries to support young entrepreneurs?

Enable Early education in entrepreneurial skills

Support for young entrepreneurs should be launched at an early stage. The necessary skills such as digital competence, quality of management, handling of financial resources or communication should already have a prominent place in education, and should in particular focus on school and university education. This is why the G20 YEA calls for both academic and secondary (university) education to be expanded by means of focus on the skills required for entrepreneurs. And through support by means of a “learning by doing” system, for example by means of practical entrepreneurial activities such as school or university start-ups or at least business games, the students could already work on and try out their future (theoretical or practical) company during their education and training.

Provide financial support

Of course, financial resources are required. For this reason, another priority of the G20 YEA is to enhance the financial support for partnerships between university incubators and accelerators and the private sector. In this way, university resources can be used by and, at the same time, innovations from university development can be introduced to existing companies.

Allow making connections and provide information

After the foundation, one of the most important phases for a company is the expansion and the scaling. In this phase, a platform for establishing contacts, fostering cultural exchange and creating opportunities for cooperations would be very helpful in order to access customers and employees worldwide. To capture the most important economic regions in the world, it makes sense if such a platform is provided and supported by the G20 countries and the relevant information and contacts (for example on the prerequisites for company foundations, on taxation, on important regulations or on the use of employees) is made available here.

Provide digital infrastructure

Since young entrepreneurs are constantly online and many business models require mobile accessibility, a functioning digital infrastructure is essential. This must be available without interference by means of high-speed Internet lines and at the same time it must be cost-effective. The G20 YEA therefore calls on the G20 countries to develop a 5G network in all G20 countries by 2022 to enable an uninterrupted participation in global digital networking.

Create a visa program for entrepreneurs

As described above, it is particularly important for young entrepreneurs to be in contact with customers, investors and potential employees worldwide. For this reason, strengthening the access and the presence for young entrepreneurs in their identified target markets is a particular concern of the G20 YEA. It therefore calls for a special visa program for entrepreneurs in the G20 countries, which allows a (young) entrepreneur not to enter a G20 country with as little difficulties as possible, but also lets him set up and develop its company there.

Reduce bureaucracy

In this context, the sometimes lengthy prerequisites for setting up a company or its continuation in some countries pose challenges for young entrepreneurs. The G20 YEA therefore calls for the implementation of structural and legal reforms with the aim of simplifying entrepreneurship through simplified bureaucracy and concomitant cost reductions. Overriding bureaucracy is the greatest obstacle to cross-border activities. The G20 YEA therefore specifically calls on the governments of the G20 countries to set themselves the goal of enabling the citizens of a G20 country to establish and register a company in another G20 country within 5 days, and if possible without the help of consultants or special professions.

Provide tax incentives

And since the creation of a company is often associated with the creation of new jobs, tax incentives should be created for young entrepreneurs, not only to start a business and generate profits, but also to create jobs as quickly as possible.

Strengthen the protection of intellectual property

Last but not least, it should not be forgotten that there are still different legal configurations in the individual G20 countries with regards to the protection of intellectual property. Often, however, the potential of a company lies in its initial idea, so that the protection of intellectual property is of particular importance. Here, the G20 YEA calls for the closure of existing gaps in the individual G20 countries with regards to IP protection in order to ensure a G20-wide uniform protection level.

Young entrepreneurship is global!

Young entrepreneurs are innovative, have the willingness to take calculated risks and will not stop the implementation of their business ideas because of national borders. They also create jobs that are urgently required because they use the opportunities of a globally connected world. However, they are faced with a variety of obstacles to their entrepreneurial ambitions, often resulting from “thinking in national borders”. However, what is needed is a viewpoint that goes away from “it is enough for our country” to a “how could we do better to respond to global competition”. The G20 YEA is ready to tackle the issue of how cross-border entrepreneurship can be strengthened and propose solutions to the G20 governments and leaders.

 

Carsten Lexa is the President of G20 Young Entrepreneurs´ Alliance Germany and the host of the German G20 YEA 2017 Berlin Summit (link to the Summit website). A corporate lawyer by profession and equipped with his own law firm (link to the law firm website), he advises international clients, who want to do business in Germany, in corporate and commercial legal matters. He is, by invitation of the European Commission, a participant in the annual SME Assembly. He is also a member of the B20 Task Forces and since 2014 a member of the national board of JCI Germany (WJD — Wirtschaftsjunioren Deutschland), the biggest organization for young leaders and entrepreneurs in Germany.

Interested in more information? Follow on Twitter (kanzlei_lexa), “like” the Facebook fan page (kanzlei.lexa) or visit the blog (Link).

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The law and autonomous vehicles: top six articles from the World Economic Forum

Diverless cars have already hit the roads but what happens if one of them hits you? In other words what is the legal framework that governs this and other expressions of the so called Fourth Industrial Revolution? For answers to these and other intriguing questions, here are my top six best articles on the subject from the World Economic Forum. Click Articles.

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The law as a economic development tool: a personal insight

I call on my fellow lawyers around the world to join me in having an expanded view of their role in society.

 

Thanks World Economic Forum and Andrew Ozanian.

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China’s Special Economic Zone experience… seven things Jamaica has learnt

“If we are to seize opportunities to promote China’s all-round development, it is critical to expand the economy.” – Deng Xiaoping

China’s economic development over the past 35 years is nothing short of remarkable. Its journey to becoming ‘the factory of the world’ holds several important lessons in industrial development, attracting foreign direct investment and economic diversification. Although China’s journey is a complex one filled with a variety of policy prescriptions, one policy tool stands above the rest – special economic zones. The strategic and focused use of special economic zones (SEZs) as a development tool holds a special – pun intended – place in China’s story. And as Jamaica embarks on its own journey using its modernized SEZ framework, China’s journey holds valuable insights into the remarkable transformational power of SEZs.

What makes special economic zones special?

There are various definitions of SEZs, however, in the simplest of terms they are “geographically designated trade areas that are used to attract foreign investors and boost industrialisation. They generally have trade laws that differ from the rest of the country and companies are offered tax incentives to set up operations.” (What can Africa learn from China’s special economic zones? By Yejoo Kim, World Economic Forum).

SEZs come in a variety of forms, names and functions – Free Trade Zones, Free Zones, Export Processing Zones, Enterprise Zones, etc. – that reflect a government’s priorities and positioning of its economy. However, what unifies them all is that they are development tools used by governments to attract, and facilitate investments that act as catalysts to diversify whole or targeted segments of their economies.

A journey of a thousand miles begins with a single step

For China its SEZ journey began in the late 1970s/early 1980s as part of Deng Xiaoping’s economic reform and opening up of China to the world. The first SEZs were set up along China’s southern coastal areas in 1980, and most famously in Shenzhen. SEZ became China’s windows to the world. The SEZs, especially Shenzhen were an immediate success attracting by 1981 over half of China’s total foreign direct investment (FDI). The success story of China’s SEZ continues today and will for the foreseeable future.

Jamaica has set itself an ambitious goal and programme through its national development plan to “make Jamaica the place of choice to live, work, raise families and do business.”  A critical element of Vision 2030 is transforming Jamaica into a global logistics hub which includes bringing together Jamaica’s geographic and other advantages with land, sea, air and technological infrastructure to support Jamaica’s modern industrial development. The ultimate aim of the global logistics hub is to increase the length, width and depth of Jamaica’s participation in global supply and value chains.

This increased participation or value addition may come in a variety of forms that would see Jamaica and her people expanding their skills and expertise in research and development, design, production, logistics, marketing or services, etc. in a range of industries.  For Jamaica, much like China, special economic zones, are a ‘special’ vehicle to increase its participation in the global economy.

The seven things

It is certainly true that Jamaica can learn many important lessons from China and other countries in the use of SEZs as a tool for economic development, however, to my mind here are seven of the most important:

  1. Special Economic Zones are not a panacea: SEZs while important are not an economic magic bullet and are not a cure all for a country’s entire economic woes. They do not stand by themselves but form part of a larger economic reform programme, for China that was Deng Xiaoping’s opening up of China to the world and for Jamaica it is Vision 2030 and the global logistics hub.
  2. On and off-site infrastructure integration: One of the most criterial factors that contribute to the success or failure of zones is availability and integration of adequate and appropriate infrastructure inside and outside of a zone. This infrastructure – land, sea, air or technology – must not only be fit for purpose but must be networked together to create value for stakeholders (workers, government, investors, etc.).  Much like China, Jamaica, albeit on a smaller scale, has been developing and integrating its multimodal logistics infrastructure.
  3. ‘Soft’ infrastructure is as important as physical infrastructure: Having the right business environment is critical to attracting investors. The laws that the zones operate under, just like the physical infrastructure, have to be adequate and appropriate – fit for purpose. This is much more than just cutting red-tape but it’s about bureaucracies being facilitators and delivering government services as value additions. Investors must have confidence that it is easy to invest, their investment is safe and the operations of their investment will not be compromised by excessive red-tape.  This, in part, is the very reason China and now Jamaica created the zones.
  4. Incubation for larger economic reforms: Reforming an economy is no easy task and one that cannot be done overnight no matter the size of the economy (Jamaica vs. China). However, SEZs offer policy makers an opportunity to experiment with a variety of reforms with limited risk to the wider economy. SEZs, in this regard act as incubators to test and refine reforms before rolling them out to the wider economy. The incubation of reforms gives policy makers policy room to create strong test cases done under as-close-to local conditions that increase the opportunity for success when rolled out in the wider economy.
  5. Efficient and effective administration: The efficient and effective administration of the SEZ regulatory environment is a self-evident, yet often understated success factor for SEZs. This goes beyond attracting and facilitating investments, as important as that is, into due diligence, long term assessment, planning and on-going monitoring of investors and their investments to ensure that they align to the country’s goals and policy priorities. In its Special Economic Zone Authority, Jamaica much like China has created a mechanism to do just that.
  6. Linkages: The phrase a rising tide lifts all boats defiantly describes the economic benefits of China’s SEZ development, however, this rising tide was not incidental and was planned for. One of the great development effects of SEZs are their spill-over effects into the rest of the economy. However, for these impacts to be meaningful and sustainable forward and backward linkages have to be forged by deliberate policy direction and actions. Jamaica’s SEZ policy and law recognize this fact and have created several mechanisms, particularly aimed at small businesses, to accomplish this.
  7. Developing a skilled labour pool: China realized early that it was not enough to have a cheap labour force but it had to have an educated one as well. What is more, China also recognized that in developing in its skilled labour pool, it was important that it match its skills training with the needs of current and future industries. In fact, over time China’s skills training development became an integral part of its investor targeting, innovation and over-all economic growth strategies. For Jamaica education and training are critical components of Vision 2030 and the global logistics hub.
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