A Simple Truth: Jamaica Best Positioned for Global Logistics Hub, Part I
The simple truth is that Jamaica is best positioned of all the nations in the region to become a global logistics hub.
Jamaica’s Global Logistics Hub Initiative has often been linked to the expansion of the Panama Canal and rightfully so; however, it is important to note that the Initiative is not wholly dependent on the Canal expansion. Both the expansion and the Initiative are driven by the same forces – globalization, the increased importance of intermediate goods, the blurring line between trade in goods and services, the rise of global supply/ value chains, etc. – that are not only driving but reshaping global trade.
It is these same forces and not so much to provide competition to Panama or in readiness for the Canal’s expansion that is driving the much celebrated logistics plans in the region. The planned Nicaragua canal and Costa Rica dry canal is not simply about providing competition to Panama, likewise neither is the Port of Mariel in Cuba or the Port of Caucedo in the Dominican Republic simply about getting ready for the Panama Canal’s expansion.
The Canal expansion project, however, does serve as an important catalyst for the region and particularly for Jamaica to seize the opportunity to grow its economy through greater participation in the global trading system. As critical as an expanded Panama Canal will be in reshaping global trade, by itself it would be suboptimal without the nations of the region also taking action.
A global logistics hub will optimize an expanded Canal, or for that matter, Nicaragua or Costa Rica, by creating opportunities and synergies in transshipment, just in time delivery, tourism, manufacturing, digital content creation, banking, ship and airplane repair and maintenance, etc., that either never existed or where underutilized. To let you in on an open secret, the Panamanians and others know this but more importantly they know the simple truth: Jamaica stands as the best positioned.
What Jamaica represents is a centralized location in the Americas where logistics and related activities can all be clustered on one island. Jamaica will become a platform for the use of digital technology to plan the design, production, packaging and distribution of goods; financial services; a strategic depot for the storage of natural resources, ship and airplane repair, legal services, tourism and so on.
Many of these activities will take place in what are called Special Economic Zones (SEZs). SEZs are defined by the World Bank as “geographically delimited areas administered by a single regulatory body, offering certain incentives (generally duty-free importing and streamlined customs procedures) to businesses which physically locate within the zone.” Jamaica’s SEZs are a developmental tool used to enhance the efficiency, competitiveness and productivity in trade, manufacturing and service delivery, namely logistics. These SEZs will be critical for us to deepen our participation in global value and supply chains and put our people to work.
This article does not take into consideration the normalizations with Cuba taking place with the US. The hub being done between Cuba and Brazil is well underway and will offer more in terms of location and capacity. The smaller islands have the same type of developments as the proposed on in Jamaica and by the same company CHEC. Oct. 2014 Dubai & Singapore pulled out bids on the Kingston Container Terminal stating that both the Goat Islands project and the KCT where not sustainable & viable.
The positioning of Jamaica is one thing. The inability of the Government to capitalize on the assets they currently have and market that, is what will inhibit them from moving into the global logistics chain.
Crime, corruption and the high cost of production due to energy needs are also main factors in choosing location for even valued added products.
In sort there are too many of these like kind ports being built all over the Caribbean and only so many ships. The world may never in our lifetime see the pre worldwide economic turndown boom again, as projections in trade are only at a modest 1% +/-.
Jamaica for Jamaica’s sake should be looking at sustainable economic development, not something that hinges on the supply and demands of the global market.
We have looked very carefully at the Portland Bight Protected Area and feel very strongly that the area is best suited for the UN biosphere reserve. It would offer more economic sustainability, fishing, research. ecotourism, education, small business, and developments that enhance the long term goals of combating climate change.
Interesting Information for the feature.