Missed Golden Opportunity?

Recently the government completed the divestment of the sugar industry, a move that I fully endorsed. I have always felt that too much of the country's money is being used to bail out an industry that can sustain itself once it is under proper management and has the requisite capital. This, I believe, should come from private developers with limited support from the government.

One of the bauxite companies in Manchester and St Elizabeth has also paid out significant sums to workers who had to be made redundant because of the global economic crisis. The redundancies in these two parishes have been causing inconceivable hardship on the residents who were heavily dependent on the bauxite industry.

But with the divestment of the sugar industry and the closure of one of the major bauxite companies came the payout of large sums of redundancy money to workers who have toiled in these industries for years. It is this matter that I would like to address because I believe that a golden opportunity has been missed with the efforts to reorganise these sugar and bauxite workers.

It is estimated that some $2.7 billion was paid out in redundancy money to sugar workers: $900 million from the Government of Jamaica and $1.8 billion from the European Union. Approximately $1.8 billion was paid out to bauxite workers in Manchester and St Elizabeth.
Cumulatively, some $4.5 billion has been paid out to workers in both the sugar and bauxite industry. This is a lot of money in the hands of these former workers.

I am aware that a number of efforts were made to counsel and train the redundant workers to utilise their money well, but I believe that an opportunity was missed by the authorities to establish a joint-venture company which would create new agro-industries in the parishes being affected by the redundancies. It is my opinion that this joint-venture company could have offered shares to these redundant workers so that they could invest some of their money in an entity that would generate further wealth and employment. For example, 200 million shares at a price of $5 per share could have yielded $1 billion from redundant workers to assist in establishing this company. The government could have asked private companies, such as GraceKennedy, that have an established and reputable track record in food processing, to be a shareholder in the business as well. The Development Bank of Jamaica could also come in as a partner. What this would have done is to create an entity with a significant capital base to establish at least three or four food-processing facilities in the parishes that are being affected by the redundancies.

These food-processing plants would be engaged in the processing of various agricultural products for export. The same workers, who have been made redundant and bought shares in the joint-venture company, could be contracted to produce various agricultural crops to sell to the food-processing plants. The Ministry of Agriculture could utilise the project that they have recently signed with the Canadians for approximately $250 million to create greenhouses: to provide these houses to the redundant workers for producing various crops to supply to the processing plants. The redundant workers would be thus generating income from two sources: the shares that they buy and from the crops that they are selling to the processing plants.
This would have created a new and different industry on the southern belt of the country. It would metamorphose all the communities that once depended on bauxite and sugar-cane for existence. Most important, it would have created the new kind of enterprising farmer that the prime minister has been advocating.

I believe that there is a missed opportunity although it is never too late for a shower of rain. As a country we need to start thinking outside the box and to utilise the limited resources that we have to generate further wealth. We cannot only be dependent on overseas investors to invest their money in our country. We have to do it ourselves and creative ways must be utilised. With greater coordination and planning, we could have created a new industry on the south coast to counter the fallout from bauxite and sugar.

The global tsunami that has hit Jamaica so badly calls for sharp and innovative thinking. I am saddened by the poverty and frustration among our people and we have to do some creative things to assist them. Going to the International Monetary Fund must be a temporary response to the crisis we face. We need a simultaneous production plan that will see our people producing as they have never done before. We need a "production czar" to drive this production plan and the best person to do so is the prime minister. He has the capacity to get things done and on a timely basis. The establishment of the joint-venture company could start this response. It would be great if the government were to act upon this idea.

Floyd Morris is a former senator and minister of state in the Ministry of Labour and Social Security

source: jamaicaobserver