Strategic Global Repositioning and Future Economic ...

THE NORTH-SOUTH

AGENDAPAPERS • E I G H T E E N APR I L 19 96

Strategic Global Repositioningand Future Economic Development

in Jamaica

Richard L. Bernal

This paper argues that Jamaica is one of the countries withthe potential to become an exporter of services andthereby achieve economic development. If this goal is tobe reached, Jamaica must immediately implement a policyof strategic global repositioning.

U N I V E R S I T Y O F M I A M I

North South CenterA PUBLICATION OF THE

TH E NO RT H- SO U T HAGENDA PAPERS

NUMBER EIGHTEEN

Strategic Global Repositioning

and Future Economic Development

in Jamaica

Richard L. Bernal

U N I V E R S I T Y O F M I A M I

North South CenterA PUBLICATION OF THE

1500 Monza Avenue, Coral GablesFlorida 33146-3027

NORTH-SOUTH AGENDA PAPERS • NUMBER EIGHTEEN

The mission of the North-South Center is to promote better relations andserve as a catalyst for change among the United States, Canada, and thenations of Latin America and the Caribbean by advancing knowledge andunderstanding of the major political, social, economic, and cultural issuesaffecting the nations and peoples of the Western Hemisphere.

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April 1996

ISBN-1-57454-016-5Printed in the United States of America

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Introduction: Strategic Global Repositioning

Strategic global repositioning is a process ofrepositioning a country in the global econ-

omy by implementing a strategic plan. Suchplans are designed to consolidate andimprove existing production lines while reori-enting the economy toward new types of eco-nomic activities. In most developing countries,this involves structural transformation (notadjustment) to achieve economic diversifica-tion, including export diversification. Theneed for strategic global repositioning derivesfrom trends in the global economy that por-tend limited opportunities for industrializationin developing countries.

Many developing countries have attempteda transition from agriculturally basedeconomies that export primary products to anindustrialized economy that exports manufac-tured goods. Their motivations were obvious,given that industrialization was regarded assynonymous with development and high percapita incomes. Conventional wisdom indevelopment economics since the early 1950shas been based on the premise that industrial-ization is a strategy for transforming develop-ing economies into developed ones. In thevast majority of cases, all developing countriesattempted industrialization through an initialphase of import-substitution industrialization.Having nurtured infant industries through pro-tectionist measures and incentives to foreigninvestment, national economies were expect-

ed to become exporters of manufacturedgoods, capitalizing on wage differentialsbetween developed and developing countriesand taking advantage of raw material andenergy availability, where possible.

The reality, however, has been that veryfew developing countries have succeeded incarrying out these transformations. The fewthat have succeeded are known as newlyindustrialized countries (NICs), the mostnotable examples of which are the AsianTigers (Hong Kong, Republic of Korea,Singapore, and Taiwan). The world economyhas changed, requiring much less low-

wage manufacturing. With great success,the NICs have filled this niche in the interna-tional division of labor and attendant industri-alization and export opportunities. Therefore,the option of industrialization has been largelypreempted and is no longer feasible for thevast majority of developing countries.

This situation, however, is not the disasterthat it appears to be, because it is both possi-ble and desirable for some countries with par-ticular attributes to relinquish their unques-tioning faith in the procreative power ofindustrialization and to make an immediateswitch to a service-oriented economy. Giventhe fact that services are the fastest growingcomponent of the world economy, the exportof services can provide development that hasbeen elusive thus far. Like industrialization,this is not an option that every developing

STRATEGIC GLOBAL REPOSITIONING

AND FUTURE ECONOMIC DEVBELOPMENT IN JAMAICA

Richard L. Bernal

Dr. Richard L. Bernal is Ambassador of Jamaica to the United States and Permanent Representative tothe Organization of American States.

The views expressed in this paper are those of the author and not those of the government of Jamaica.My gratitude for useful comments is extended to Don Harris, Norman Girvan, Errol Hewitt, WinsomeLeslie, Carl Goodridge and Yvonne Peart.—R.L.B.

NORTH-SOUTH AGENDA PAPERS • NUMBER EIGHTEEN2

country can pursue; countries with the poten-tial must move immediately in order to seizethis opportunity.

This paper argues that Jamaica is one ofthe countries with the potential to become anexporter of services and thereby achieve eco-nomic development. If this goal is to bereached, Jamaica must immediately implementa policy of strategic global repositioning. First,the current and expected future trends in theworld economy will be expanded. The fol-lowing sections of the paper discuss Jamaica’spotential for strategic repositioning anddescribe the actions that are necessary formaking this a reality.

Global Economic T r ends

Current global trends highlight the increas-ingly limited opportunities for developing

countries to become industrialized and thepossibilities for the export of services.

Globalization of Production and Finance

In recent years, international trade and capi-tal flows have grown at a faster rate than

world gross domestic product (GDP).1 Thevolume of world merchandise trade is estimat-ed to have increased at an average annualrate of slightly more than 6 percent during the1950-1994 period, while the average annualrate of world output grew at approximately 4percent. During those 45 years, world mer-chandise output multiplied five and one-halftimes, and world trade multiplied 14 times,both in real terms.2 During the 11-year periodfrom 1983 through 1993, the volume of worldmerchandise exports grew 71 percent, roughlydouble the 35 percent growth in world outputover the period.3 This trend reflects the pro-gressive globalization of production andfinance and the concomitant erosion ofnational barriers (such as tariffs, quotas, andexchange controls) to the international move-ment of goods, services, capital, and finance.1

The globalization of production is a rational-ization of resource use on a global scale andis more efficient (in terms of cost) than pro-duction confined to national economies. The

location of discrete aspects of the productionprocess reflects an effort to perform eachoperation where it can be executed most effi-ciently and effectively. This reflects the alloca-tion of economic activity by the global marketon the basis of comparative advantage. Thereis no point in resisting or attempting toreverse this process.

Emergence of Trade Blocs

The driving force behind globalization istransnational corporate integration through

mergers, strategic corporate alliances, andtakeovers. Efficiency in resource allocationand profit maximization on a global scale areconstrained in a world economy that is frac-tured into national economies with policiesthat restrict the degrees of freedom.Transnational corporate integration impelsmulti-country market integration, initially in aregional context, both as an economic ratio-nalization ex-post facto and as a defense bythe nation-state against the inevitable relin-quishing of the vestiges of economic sover-eignty.5

The transition to a truly global market istaking place through the integration of nation-al economies into trade blocs. The deepeningof the integration process in the EuropeanEconomic Community (EEC) and a resurgenceof regional trading arrangements in LatinAmerica and Asia are manifestations of atrend within the world economy toward theemergence of trade and economic blocs.6 Thistrend could lead to a compartmentalized glob-al economy consisting of 1) an EEC enlargedto a European Economic Area (EEA) byabsorbing the European Free Trade Area(EFTA) and parts of Eastern Europe; 2)aWestern Hemisphere Free Trade Area(WHFTA) around a core composed of theUnited States, Canada, and Mexico; and 3)some sort of free trade zone or arrangementlinking the countries of Southeast Asia or agrouping including Japan.7 Countries that arenot included or associated with trade blocs,particularly developing countries, could facesteep protectionist barriers and could therebybe excluded from these major export markets.

STRATEGIC GLOBAL REPOSITIONING AND FUTURE ECONOMIC DEVELOPMENT IN JAMAICA, 3

Given the fierce rivalry between existing tradeblocs, this situation could marginalize manycountries from the growth-stimulating dynam-ic of industrialized countries.8

Erosion of Preferential Trade Arrangements

Preferential trade arrangements for develop-ing countries are likely to be progressively

reduced. Developed countries no longer feelobliged to provide special treatment to devel-oping countries, especially those that haveminute markets, lack essential raw materials,and have limited strategic importance. Futuretrade arrangements will be based on reciproc-ity, given the present global emphasis on freetrade. Developing countries must be preparedto adapt to the elimination or erosion of pref-erential trade regimes, such as the LoméConvention and the Caribbean and CanadaTrade Agreement (CARIBCAN). The EuropeanUnion Commission responsible for the LoméConvention has declared its intention to con-duct a radical re-appraisal of the conventionthat will involve the gradual elimination ofpreferential tariffs.9 The EU is also planningfree trade agreements with developing coun-tries; it has already opened free trade negotia-tions with South Africa and has recentlysigned an interregional framework agreementwith Mercosur.10

Already, the benefits provided by theCaribbean Basin Initiative (CBI) have beendiminished by the North American Free TradeAgreement (NAFTA), which has put CBI coun-tries at a disadvantage in terms of access toU.S. markets since NAFTA provides Mexicowith special exemptions from tariffs and quo-tas during specified adjustment periods forcertain products.11 The World Bank has esti-mated that approximately 36 percent ofCaribbean exports to the United States will besubject to displacement by NAFTA.12 There arealso adverse implications for CBI countries interms of investment because NAFTA will facil-itate investment shifts from CBI countries toMexico.13

Jamaica is faced with the dilemma of howand when to participate in NAFTA or in theproposed Free Trade Area of the Americas(FTAA) while maintaining its relationship withthe EU through the Lomé Convention.14 Theadverse repercussions of NAFTA on CBIexports to the United States are clearly evi-dent in the apparel industry (Table 1).

TABLE 1.GROWTH OF U.S. APPAREL IMPORTS

FROM MEXICO AND THE CBIANNUAL INCREASE IN QUANTITY OF IMPORTS

Year Mexico CBI

1991 24.7% 24.8%

1992 23.0% 25.8%

1993 21.8% 21.8%

1994 50.2% 15.75

1995 Jan.-August 71.6% 26.2%

Source: Major Shippers Report, U.S. Department ofCommerce, Office of Textiles & Apparel; U.S. Imports ofTextiles and Apparel Under the Multifiber Arrangement:Annual Report of 1994, U.S. International Trade Commission,Publication 2884 (April 1995).

Decline of Exports from Developing Countries 15

The decade of the 1980s was characterizedby low growth in industrialized countries

and uneven growth in developing countries.During 1990 and 1991, low-income and mid-dle-income economies stagnated in terms ofGDP per capita. The outlook is not encourag-ing, as GDP growth in the G-7 countries(Canada, France, Germany, Italy, Japan,United Kingdom, and United States) fell from2.8 percent in 1990 to 1.9 percent in 1991 andto 1.2 percent in 1993. These declines in GDPgrowth have reduced demand for exportsfrom developing countries and have con-tributed to a 6 percent decline in non-oil com-modity prices (in nominal dollar terms). Thevolume of merchandise exports from develop-ing countries declined by 2 percent between1990 and 1991; however, growth in LatinAmerica and the Caribbean increased margin-ally. The outlook is equally bleak for primary


product exports as technological change isreducing demand by providing synthetic sub-stitutes and reducing raw material input perunit of manufactured goods. During the 1980-1991 period, export unit values of primarycommodities and, to a lesser extent, manufac-tured goods from developing countries wereon a downward trend relative to those ofdeveloped countries. Commodities declinedby approximately 50 percent and manufac-tures by about 18 percent. Thus, developingcountries as a whole have experienced adecline in net barter terms of trade for bothtypes of exports.16

The global economy is steadily becomingless material-intensive. As Drucker noted, rawmaterials and energy accounted for approxi-mately 60 percent of the costs of producingan automobile, which used to be the repre-sentative industrial product in the 1920s.17 Theraw material and energy costs needed to pro-duce the representative industrial product ofthe 1980s the semiconductor microchip, areless than 2 percent of total input costs. Inanother example, copper wire, for which rawmaterial and energy costs account for close to80 percent of total production costs, is rapidlybeing replaced in telephone cables by glassfiber, for which raw material and energyinputs account for only 10 percent of produc-tion costs. On a nation-wide scale, Japanincreased its industrial production two-and-one-half times between 1965 and 1985, whilebarely increasing its raw material and energyconsumption at all. U.S.-manufactured prod-ucts contained less than half as much rawmaterial and energy inputs as they had 20years earlier. Aluminum use is a clear exam-ple: in 1972, one pound of aluminum (frombauxite) produced 22 beverage cans, but by1989 it yielded 30 cans.18

Shift from LoanCapital to Investment

The World Bank reports that official devel-opment assistance (ODA) declined in real

terms by over 3 percent from its 1990 peak,and grants have continued to decline. As apercentage of GNP, official development assis-tance from industrialized countries has

remained constant at 0.35 percent since1985.19 In real terms, U.S. foreign aid will con-tinue to fall, as the government is becomingincreasingly preoccupied with domestic issuesand as the fiscal deficit persists. In addition,the share of a reduced U.S. foreign aid budgetallocated to developing countries is likely todecline even further. Meanwhile, theEuropean Union’s aid priorities are nowEastern Europe and the Magreb.20

Foreign direct investments (FDI), includingequities and bonds, to developing countrieshave grown dramatically in the 1990s,although the direction of these flows has beenuneven between regions and countries. Infact, 15 countries have been the primary ben-eficiaries. The bulk of these investments havebeen made in East Asia, notably China, andfour countries in Latin America (Argentina,Brazil, Colombia, and Mexico).21

Reorganization of Corporate Structures

Today’s business environment is dominatedby rapid change, with the balance in the

seller-customer relationship shifting to cus-tomers. Competition has intensified with glob-alization, which has vastly increased the num-ber of players in the marketplace, and innova-tions in technology have induced changes.Companies have to be flexible, responsive,competitive, innovative, efficient, and cus-tomer focused. The traditional hierarchicaland pyramid-shaped organization of corpora-tions is too cumbersome and slow to respondeffectively. This has prompted a process of“re-engineering,”22 that is, “the fundamentalrethinking and radical redesign of businessprocesses to achieve dramatic improvementsin critical, contemporary measures of perfor-mance, such as cost, quality, service, andspeed.”23

An important aspect of corporate reorgani-zation is downsizing and decentralization,through which large corporations reconstitutethemselves as networks of small, oftenautonomous, units. This downsizing trend isillustrated by the fact that Fortune 500 indus-trial companies have reduced their work forceby 25 percent (a total of 4.4 million employ-


ees) since 1979.24 Downsizing is not apanacea; recent studies have revealed that 1) no correlation exists between corporateperformance and the decision to downsize,and 2) severely downsized firms did not do aswell as stable firms.25 Re-engineering, ofcourse, has a human side as it involves a newworkplace culture and new mode of organiz-ing work, as well as the adjustment associatedwith the displacement of labor.

The conventional wisdom is that in theproduction of most manufactured goods thereare important benefits to be derived fromincreasing size. The relatively small size of theaverage firm in most developing countries hasprevented the realization of economies ofscale, and, therefore, output is costly com-pared to imports and uncompetitive in exportmarkets. However, technology is makingsmall-scale production not only more viablebut more profitable. Futurologist John Naisbittspeaks of a global paradox: “The bigger theworld economy, the more powerful its small-est players.... As the world integrates econom-ically, the component parts are becomingmore numerous and smaller.... The bigger andmore open the world economy becomes, themore small and middle size companies willdominate.”26 The recent trend toward strategiccorporate alliances has made it possible fornetworks of small firms to overcome the limi-tations of size and compete effectively againstlarge corporations.27 Small firms can ensuretheir survival and profitability in the globaleconomy by 1) specializing in a single aspectof production or distribution; 2) capitalizingon specific market niches; 3) specializing in“flexible” manufacturing; and 4)concentratingon economies of speed, which are now moreimportant than economies of scale.28

Decline of Low-wage, Labor-intensive Manufacturing

Internationalization of the labor market andof employment opportunities is rapidly

deepening as a result of the continuousprocess of spatial relocation of economicactivity concomitantly with industrial restruc-turing.29 The wide differential in wages impelsfirms to relocate from high-cost economies to

low-wage countries. For example, the hourlylabor cost in the textile industry in 1995ranged from $24.23 in Western Germany to 28cents in Bangladesh.30 Even taking intoaccount differences in productivity, there isstill a large gap in wage differentials. The gapis not being closed: hourly pay in the textileindustry in the United States increased from$11.89 in 1994 to $12.18 in 1995, while inMexico it dropped from $2.27 to $2.22.31

The competition for low wage manufactur-ing jobs has intensified. Many of the industriesthat rely on inexpensive labor will be turningincreasingly toward locations in EasternEurope and the poorest developing countries.The political and economic implosions of theSoviet Union and Eastern Europe have led tothe reintegration of these areas into the globaleconomy. This has led to a diversion of aidand foreign investment from developing coun-tries, a depression of commodity prices, andthe addition of a huge pool of relativelycheap labor. Since 1990 there have been60,000 joint ventures in Eastern Europe, witha foreign investment value of nearly US$9 bil-lion.32 In this context, the workers of bothregions are competing for scarce capital,which could lower wages.

Manufacturing is becoming more mecha-nized and, therefore, utilizes less manpower.33

In particular, computer technology and therapid expansion of robotics since the early1980s have intensified this trend.34 The num-ber of industrial robots in operation in Japandoubled between 1977 and 1993 and is pro-jected to double again shortly after the year2000.35 U.S. production of manufactured goodsduring the 1980s steadily increased, whileemployment dropped steadily, so that in 1988it required only two-fifths of the person-hoursof labor it took in 1973 to manufacture thesame volume of goods.36 Jamaica’s strategicplanning must take into consideration “tech-no-poles,” which are clusters of information-driven, high-technology manufacturing areassuch as Silicon Valley or Boston’s Highway128.37 With the necessary advanced planning,Jamaica could become such a techno-pole.

Developments in biotechnology couldhave a major dislocating effect on agriculture,causing changes in locations and methods ofproduction. Scientists have warned that if fieldcrops are grown in vitro, major portions ofthe farming enterprise could be eliminated.This, in turn, will displace farmers and farmworkers.38 Not all technological change islabor saving. Zuboff distinguishes betweentechnology that automates and technologythat informates; the former is labor saving andlabor displacing, while the latter enhanceslabor and productivity.39

Growth of Knowledge-based Employment

Three broad categories of work are emerg-ing, resulting in increasing divergence in

remuneration and leading to pronouncedlabor market segmentation and a skewedincome distribution. The three types of workare 1) routine production, 2) in-person ser-vices, and 3) symbolic-analytic services. Thesymbolic analysts, also called knowledgeworkers, concentrate on problem solving andstrategic brokering by manipulating symbols.They generate the highest value-added factorand compete in a global labor market withhigh international mobility.40 The other twocategories of worker, routine producers andin-person servers, are immobile international-ly, but given the mobility of capital, technolo-gy, and management, their wages are influ-enced by lower wages in developing coun-tries and labor-saving technology. By the year2000 it is estimated that 70 percent of all jobsin Europe and the United States will empha-size “cerebral” rather than “manual” skills.One-half of these so-called “brain-skill” jobswill require personnel with university-leveleducation or equivalent professional qualifica-tions.41

Growth of Services

The contribution of services to GDP andemployment has increased in both devel-

oped and developing countries since the mid-1960s.42 During the 1980s, services grew attwice the rate of the merchandise trade rate,and by 1990, services represented 36.1 per-

cent of world trade.43 Furthermore, servicesaccount for 61 percent of GDP in industrial-ized countries and between 35 and 51 percentof GDP in developing countries.44 The UnitedStates generates 72 percent of its GDP in theform of services. In 1991, services accountedfor 30 percent of U.S. exports.45 It is projectedthat the service sector will account for fourout of five jobs in the United States by theyear 2005.46 In Great Britain, service industryexports, especially financial and tourism ser-vices, have already exceeded the export ofgoods.

In 1994, there were 150 non-banking ser-vice firms in the Forbes International 500,which excludes the United States. These firmsnot only include traditional services (such asutilities, insurance, construction, and retailing)but also firms in media and telecommunica-tions and several firms dedicated entirely tothe provision of services to businesses. In theUnited States, the number of service firmsexceeded the number of manufacturing firmsin the 1995 Fortune 500.

The average annual growth in trade incommercial services between 1980 and 1993was 7.7 percent, compared to 4.9 percent formerchandise trade. The overall share of ser-vices in total trade amounted to 22.2 percentin 1993 (up from 17 percent in 1980), and it isestimated that in the early 1990s serviceindustries accounted for 50 to 60 percent oftotal FDI flows. 47

The rapid changes in global economicconditions have eliminated certain strategiceconomic opportunities and, in the meantime,have created new ones. Jamaica must adaptitself to such changes in the process of its cur-rent global repositioning. Within its long-termstrategic plans, it must simultaneously prepareitself for anticipated developments — “sce-nario building” — such as the possible nor-malization of relations between the UnitedStates and Cuba.48 The following sections dis-cuss the specific attributes of the Jamaicaneconomy and the actions required to putthese characteristics to use in the country’srepositioning.



Actions Required for Strategic Global Repositioning

Jamaica is a highly open economy and issensitive to events in the global economy.

This is reflected in 1) a high export/GDPratio, 2) the high import content of produc-tion and consumption, and 3) the importanceof foreign capital inflows to gross investment.The structure of Jamaica’s exports is alsohighly skewed in favor of traditional exports(bauxite/alumina, sugar cane, and bananas).These products currently account for 62 per-cent of the value of total domestic exports. In1994, bauxite/alumina alone accounted for 51percent of total exports. If service exportssuch as tourism are included, data from theStatistical Institute of Jamaica and the JamaicaTourist Board indicate that bauxite/aluminaexports account for 29 percent of total foreignexchange earnings, agriculture (excludingsugar) for 3 percent, non-traditional exports(including apparel) for 19 percent, tourism for44 percent, and manufacturing for 5 percent.The fact that 73 percent of Jamaica’s foreignexchange earnings come from bauxite/alumi-na and tourism clearly demonstrates theextent of its vulnerability to external events,such as price fluctuations for primary productexports.

Over the years, attempts have been madeby successive governments to diversify theeconomy, as is evident in the growth of thenon-traditional export sector. However, at pre-sent it is important to build on this trend bymoving into new areas of activity and types ofservices, such as health care and informatics.

The events and trends now taking place atthe global level and in the hemisphere posean unprecedented challenge to Jamaica. Thedifficulties are not insurmountable, but it isclear that a new development strategy basedon the following actions will be required.

Abandoning the Traditional Mind Set

In Jamaica, there must be both a recognitionof the need to change and a willingness to

innovate. Every process of adjustment beginswith changes of mind, outlook, and attitude

and will only commence in earnest whenthere is a change of mind in both the publicand private sectors and when Jamaican entre-preneurs dare to think in new and adventur-ous ways. Reality clearly contradicts the viabil-ity of the entrenched, dominant “industrializa-tion” paradigm. The “industrialization para-digm” emerged when Sir W. Arthur Lewischallenged the colonial orthodoxy, which pro-posed that industrialization was not possible,and, therefore, the economy should be basedon the export of agricultural products.49

Lewis’s argument for export-oriented industri-alization financed by foreign investment wasoverwhelmed by virulent nationalism and eco-nomic insularity.50 Import-substitution industri-alization, carried out behind protectionist bar-riers and rationalized by “infant industry”arguments, soon exhausted the national mar-ket. The regional integration mechanismoffered a solution, since the amalgamation ofeconomies into a regional market would per-mit economies of scale and improve efficiencythrough competition.51

Ensuing governments, since the early1950s, have been locked into a mind-set thatequates industrialization with the transitionfrom underdevelopment to development. Thisprocess is viewed as progressing from import-substitution industrialization to the export ofmanufactured goods. Despite protection andother government support, this transition hasnot taken place in Jamaica. Although therehas been some success with this strategy inthe NICs of Asia, perhaps it is no longerviable under the new developments in theworld economy.

Jamaica should move away from the tradi-tional approach to development based onindustrialization and pursue developmentbased on export of services. The advantagesof this strategy are numerous, including thefact that services are the fastest-growing sectorin world trade and in the U.S. economy,which is Jamaica’s largest trading partner. Thejobs created would be relatively high wageand environmentally safe. The prospects forthe export of services, especially to the UnitedStates, are very encouraging.52 Many of the12.5 million new jobs, such as data processing


and accounting, can be undertaken inJamaica, given the wage differentials andmodern communications technology.

The need to focus attention on the expan-sion of services for the global market shouldnot diminish attention to other sectors andproducts. While the opportunities for furtherindustrialization are not as propitious, themanufacturing sector should not be aban-doned in the efforts to expand service sectors.The substitution of one panacea for anotherwould be detrimental. What is required is bal-anced development, emphasizing diversifica-tion of exports. Hence, the government’srecent formulation of a revamped industrialpolicy is a worthwhile exercise, but the gov-ernment must be careful not to stop pickingwinners in order to shape and use the marketcreatively.53

Diversifying Exports

The outlook for the demand and price ofraw materials and primary products is not

encouraging. In this context, Jamaica mustensure that it is not overly dependent on theexport of raw materials, such as bauxite, andagricultural products, such as sugar andbananas. Given the history of fluctuating com-modity prices and declining terms of trade rel-ative to manufactured goods, it is importantthat the export products are competitive inprice and viable in the medium to long terms.Both sugar and bananas are marketed underspecial trade arrangements with the UnitedStates and the European Union, and this situa-tion threatens adverse changes. Changes tothese regimes would have very serious impli-cations.

There has to be a willingness to lookbeyond traditional economic activities andtoward financial services and the new dynam-ic sectors in the global economy, such asmicroelectronics, biotechnology, telecommuni-cations, robotics, and information. The transi-tion from low-wage, labor-intensive activitiesto technology-based and information-intensiveactivities will depend on the quality of humanresources. The growth sectors of the U.S.economy provide an indicator of where there

are opportunities. The fastest growing 25firms in the United States were concentratedin computers (retailing, networking, software,manufacturing, health care, leisure/recreation,and financial services).54 The work force willhave to be more skilled, knowledge oriented,and capable of adopting new technology.Management, production, and decisionmakingwill have to be “informationalized.”55 Exportfirms in Jamaica will have to develop thecapacity to respond quickly to changes indemand in new and existing markets, espe-cially in the U.S. market. This more than any-thing else is the secret to success of the newlyindustrialized export economies of Asia. Ifproduct “X” is in demand today, it will bemanufactured by Japan tomorrow and by theNICs of Asia at a lower price the followingday. It is this ability to respond quickly tochanges in the marketplace that determinesthe success of exports.

Developing countries that are not at thelower end of the wage spectrum must expectlow-wage jobs to bypass them. The solution isa combination of increased productivity, prod-uct innovation, and the penetration or cre-ation of niche markets. In recent years, Israelhas been unable to compete in the Europeanmarket with imports of citrus fruits fromBrazil, Morocco, and other developing coun-tries. Israel has since developed new hybridsof citrus fruits that are sweet, colorful, seed-less, and easy to peel. Not only did exports of“easy peelers” jump by 65 percent during thelast year, but Israel is exporting this technolo-gy to non-competing countries such as SouthAfrica.56 In addition to innovation, productivityand competitiveness are increasingly deter-mined by the generation of new knowledgeor by access to and processing of information.Jamaica must seek to create a technologicallyadvanced and information-based society andmust keep up with customization andincreased information in such key sectors asapparel.57

Traditional sectors, such as export agricul-ture, can be revitalized by improving the qual-ity and price competitiveness of export sta-ples, such as sugar, bananas, and coffee. In

addition, new export products should beexplored. The export opportunities of the tra-ditional sector have not been exhausted butrequire some imagination and innovation, ascan be found in exotic horticulture, bananachips, and “tropical boutique agriculture.”58

Recent successful non-traditional agro-exportsinclude winter vegetables from Mexico, high-value fruit from Chile, and cut flowers fromColombia.59

Adjusting Proactively

The only thing that is certain about theworld economy is that it will continue to

change at an exponential rate. The ability todiscern changes, to adopt and adapt to newtechnology, and to reorganize rapidly will ulti-mately determine one’s capacity to respond.Firms, governments, and individuals must getaccustomed to a lack of permanence andmust not resist change but recognize that itpresents unavoidable challenges and opportu-nities. Not far in the near future, there will bechanges that most economic agents would beapprehensive to contemplate.

The countries that succeed in the newglobalization are the countries that pursue“proactive adjustment”; that is, they adjustquickly in anticipation of and in response toglobal changes in demand and technology.Those countries that pursue “reactive adjust-ment” — that is, those that react slowly anddefensively to events by focusing on protec-tionism — are not going to survive and willnot achieve growth. In this new globalization,it is impossible to insulate production ordemand from global competition and globalchanges. Therefore, it is impossible for coun-tries in this hemisphere to achieve growth ifthey opt for the route of protectionism.Proactive adjustment that improves competi-tiveness in the global marketplace must betaken. U.S. President Bill Clinton understandsthis and has stated the idea during his elec-tion campaign and during his presidency.

Defensive and reactive adjustment thataims to preserve industries or to retain aspectsof production that can be accomplished at alower cost in other countries is self-defeating.In the short run, reactive adjustment of this

sort reduces competitiveness of exports andincreases prices of domestic goods, therebyreducing demand and increasing inflation. Inthe long run, entrepreneurs will find ways toimport cheaper alternatives and will relocateinefficient aspects of production in othercountries in order to retain international pricecompetitiveness and national market shares.For example, garment production in whichmachine-intensive textiles made in the UnitedStates are cut and sewn into garments in CBIcountries, such as Jamaica where labor costsare lower, ensures the survival and competi-tiveness of U.S. firms in both the nationalmarket and the global marketplace. Thefutures of U.S. and Jamaican industries areinextricably bound by an interdependencebased on comparative advantage and compet-itive markets.

Improving Human Resources

Management in Jamaica must becomemore sophisticated, be constantly in touchregarding developments in international mar-kets, and constantly updated regarding tech-nological innovations. Managerial capacity hasimproved considerably, and professionalismhas increased in recent years. However, thereis still room for improvement, particularly inthe public sector. In the short run, the privatesector’s managerial capacity can be upgradedby importing skilled managers and other pro-fessionals. This does not imply that foreigners,who are unfamiliar with the country’s cultureand traditions, should take over top manageri-al posts. In the short run, there are more thanenough skilled Jamaicans overseas who,under the right circumstances, would be will-ing to return home. Countries must no longerbe viewed simply as physical places but asnations without borders. In the long run, thisrequires a reorientation of post-secondaryeducation away from an emphasis on the arts,toward an emphasis on management,accounting, computer programming, and allaspects of modern technology.

In a business environment characterizedby frequent changes that require rapidresponses, management and workers mustdevelop a new relationship in which tradition-



al roles and attitudes are replaced by collabo-rative interaction. The relationship betweenmanagement and workers and between differ-ent levels within the production process willhave to change in a way that ensures incen-tives that maximize productivity. The interac-tion within the work place will have to bemore cooperative and the divisions less rigid,permitting more dialogue between tradeunions and management. If productivity is tobe increased and innovations encouraged, it isimperative that the atmosphere become lessadversarial and more genuinely interactive.60The traditional notion of a “worker” will haveto be abandoned, and a new concept that rec-ognizes worker participation in managerialdecisions and employee stock ownership pro-grams will have to be adopted. These devel-opments will require trade unions to expandtheir traditional role beyond overseeing wagerates and working conditions to includeemployment creation/preservation, educa-tion/training, and ownership participation.The fact that the number of work stoppagesand strikes over the past few years havedeclined is an indication that this process hasalready begun.

In Jamaica, the productivity of labor,including workers and managers, needs to beupgraded, and this means improvement in thequantity and quality of education. The impor-tance of this is illustrated by the experience ofEast Asian countries. The expansion andtransformation of education and training dur-ing the last three decades has been a key fac-tor in the “economic miracle” of East Asianeconomies.61 Improvements in education andtraining have to be tackled by individualenterprises and by the society as a whole.Firms need to put more emphasis on voca-tional and on-the-job training. New education-al technology (such as multimedia training)can help workers to learn more quickly andmore thoroughly; this is particularly useful forworkers who are functionally illiterate.

For society as a whole, education willhave to become the first priority. In otherwords, the financial requirements necessaryfor a well-educated work force should be the

first item on the government’s budget.Specifically, the education budget must beprepared first; any money left should be allo-cated to the other functions of government.

Developing a well-educated work forcewill not necessarily require spending moremoney, but it will require that expendituresbe allocated differently. Two requirementsmust be met in reallocating expenditures.First, the curriculum needs to be changed in amanner that emphasizes reading, English,math, and science — at both primary and sec-ondary levels. This can be achieved byincreasing the number of classroom hoursdevoted to these subjects and decreasingclassroom hours in other subjects. The secondrequirement is that teachers’ salaries shouldbe raised to a level that encourages the returnand retention of experienced and qualifiedteachers (many of whom are currently in pri-vate industry, from garments to life insur-ance). Better teachers will not only help pro-duce a better educated nation but will alsoimprove public knowledge about nutrition,hygiene, sanitation, birth control, preventivehealth care, and so on.

Education’s emphasis should be on a solidand sound primary education (up to the ageof 12 or 13) and should coincide with areduced emphasis on grammar school educa-tion at the secondary level, with greater prior-ity given to technical schools. The curriculumshould include more practical, job-relatedskills and subjects, since only a small fractionof the total high school population will go onto a university. This kind of education pro-gram would create a technologically orientedwork force with a sound educational founda-tion, capable of high productivity, includinglearning new job skills. The production, trans-fer, and adoption of science-based knowledgeis becoming more important each day.62 Withonly 3.6 percent of secondary school studentsenrolled in technical, vocational, or agricultur-al schools, a great deal of work is required.63

These needs have been recognized, and thegovernment has planned a number of remedi-al programs. A National Council on TechnicalVocational Education and Training was estab-

lished in February 1994 to address labor forcetraining.64 Jamaica, like most developing coun-tries, is not without its share of social ten-sions, poverty, and crime. The best way toaddress these problems is also through educa-tion and training. New educational programsin Jamaica will eventually lead to enhancedemployment levels and increased economicactivity.

Supplementing the Skills Pool with Overseas Nationals

Increasingly, the world economy will bedominated by knowledge-based industries,

especially services, making the quality ofhuman capital a critical factor. For manydeveloping countries, much of their humancapital resides outside of their borders. Everyeffort must be made to repatriate this loss.Just as incentives and special programs existfor foreign investment, similar schemes mustbe established to induce overseas nationalswith professional skills to return home. Itmight even be necessary to run an advertisingcampaign to attract skilled foreign profession-als, as the Canadian government is now doingquite aggressively.65 In India, overseas com-munities and returning professionals and busi-nesspeople have spearheaded several of thenew growth sectors, such as computer hard-ware and software.66

Jamaica has produced more than enoughqualified, skilled people to enable the econo-my to venture successfully into the twenty-first century. Most of this human capital, how-ever, is currently residing outside the region.The Returning Residents Unit in the Ministryof Foreign Affairs reported a steady increasein the number of Jamaicans returning home,from 1,152 individuals in 1992 to 2,355 in1995.

Developing Strategic Corporate Alliances

Corporate integration, consolidation, andrestructuring through cross-border mergers

and acquisitions is a worldwide phenomenon,resulting from 1) efforts aimed at increasingsize; 2) market presence; 3) competition,

which has forced consolidation and pruning;4) easing of regulations governing mergers;and 5) preparations for more intensive com-petition from U.S. and Japanese firms in theglobal marketplace.67 Traditional rivals arenow collaborating in Europe: Air France andLufthansa plan to merge their hotel chains,and Meridian and Kempinski are sharing mar-keting and reservation costs.68 In the mean-time, Nissan plans to buy auto parts from aToyota affiliate.69 Such collaboration has beena well established pattern in Japan.

In today’s global economy, capital has nonationality. Indeed, even bitter political differ-ences and economic rivalry have been sweptaside by strategic corporate alliances, as in thecase of Mexico’s largest construction firm,Empresas ICA, of which Flour Daniel ofCalifornia now owns 49 percent.70 Just a fewother examples: a Nigerian trade delegationvisited South Africa; China and Taiwan willcollaborate in building a petrochemical plantin Malaysia; and rivals Toshiba and Samsung(of Korea) will collaborate on computerchips.71

Some strategic alliances have already beenformed in Jamaica. For example, JamaicaBroilers — the highly successful producer andexporter of poultry, beef, and fish — recentlyformed two international partnerships thatsupport its objectives of being the most effi-cient producer in the market and becominginternationally competitive. One of thesealliances is a partnership with a U.S.-based,breeder-flock operation for the export of fer-tile eggs to Latin America and the Caribbean.The other alliance is a fifty-fifty partnershipwith one of Great Britain’s larger egg produc-ers for the purchase of a poultry processingoperation — both alliances are aimed atexpanding its overseas markets.

Desnoes and Geddes Limited, brewers ofthe internationally known Red Stripe beer,sold 51 percent of its holdings to Guinness, along-time licenser of the company. The resultshave been very positive for the companybecause, for the first time in many years, con-sumers were spared the usual shortage ofcompany products at Christmas because its



production line had been modernized. Otherexamples of strategic alliances include a jointventure between Jamaica Producers Groupand Fyffes Group Limited of Ireland to pro-duce bananas for the European market, GraceKennedy and Company Limited’s telecommu-nications venture with Sprint of the UnitedStates, and Telecommunications of Jamaicawith Cable and Wireless of Great Britain toupgrade local and international communica-tions.

Some Jamaican firms and financial institu-tions have become multinational corporationsor are branching into the United States, GreatBritain, the Caribbean, and Cuba. SomeJamaican entrepreneurs have set their hori-zons at both the hemispheric and global lev-els. By merging, some firms can become moreviable. Joint ventures with foreign investorsare critical for survival since many Jamaicanexporters are small compared to the firms andmultinational corporations that they competewith in the world market. This small size putsCARICOM exporters at a severe disadvantage;therefore, there is a need for collaborativecorporate alliances or mergers to provide alarger capital base and larger pool ofresources and expertise.

“Arms-length” international trade is beingdisplaced by intra-firm trade and global mar-keting networks.72 Jamaican exporters havesuffered in the past from having to deal withmiddlemen in penetrating the distributionchain in the United States and other exportmarkets. It is paramount that this obstacle toeffective marketing be removed as quickly aspossible. The best solution is for largeexporters or groups of exporters to establishretail outlets in major export markets bystrategic transnational alliances.

Transnational corporate alliances andmultinational corporations could enhance theobvious complementary relationship, derivedfrom differences in wage levels and factorendowments, between Jamaica and the UnitedStates. This complementary situation takes theform of locational differentiation of produc-tion, according to maximum efficiency andrelative competitiveness in the global market.

For example, the CBI region is the largestsupplier of garments and apparel to theUnited States; 80 percent of these garmentsare 807-type products, of which U.S. laborand raw materials constitute 70 percent of thefinished product. In the absence of this com-plementarity, both the U.S. textile and apparelsectors would face a flood of “cheap labor”imports.

Creating a Business Facilitating Environment

New communications technology has givenincreased mobility to professionals who

can provide their services by telephone, fac-simile, and computer modem. Many of the“telecommuters” are relocating out of largecities to cleaner, quieter, more rural environ-ments, as illustrated by the relocation move-ment in the United States to the RockyMountain states (Montana, Idaho, Wyoming,Colorado, Utah, and New Mexico). In 1992,Utah led the United States in percentagegrowth of personal incomes and population.73

This phenomenon is beginning to spreadglobally. For example, a British fund manag-er has relocated to the Bahamas, where hemanages US$70 million of investments fromhis beachfront home and visits London onlytwice each year.74

Jamaica’s wage levels and close physicalproximity to the United States provide anopportunity to capitalize on the new globaldispersion of employment made possible bynew communications technology. With suffi-cient planning, Jamaica could be an excellentlocation for specific operations of foreigncompanies, especially software design, dataprocessing, and accounting. These “back-offices” are established when a companytransfers particular operations to anothercountry because of the relative advantages thesecond country provides. This is already hap-pening elsewhere, for example, in the case ofSwiss Air, which is moving its accountingdepartment from Switzerland to Bombay,India.75 Improved communications infrastruc-ture and the quest for a quality of life based

on an unspoiled environment and warm cli-mate could make Jamaica one of the globalgrowth poles for such services.

Improving Physical Infrastructur e

Jamaica urgently needs to improve theextent and quality of it physical infrastruc-

ture, such as roads, irrigation, electricity, andtelecommunications, in order to reduce theoperating costs of firms in all sectors. Roadtransportation and telecommunications nowrequire a quantitative leap in anticipation ofincreased demands and must use state-of-the-art technology. Under the right conditions,much of the required expansion in physicalinfrastructure could be financed by privatecapital, including foreign capital. This hasalready begun to happen in electricity genera-tion and airport expansion. Multilane, high-speed highways are required in the Kingstonmetropolitan area to link it with other impor-tant cities and towns. Airports and docks needto be enlarged and modernized for tourismand trade. An international airport should becontemplated for Ocho Rios.

Modernizing International Marketing

Undoubtedly, there are several problemswith production in Jamaica: inconsistent

quality, irregularities in supply, and poorlabeling. However, poor marketing also hasplaced a severe constraint on exports. Thereare some sectors that have achieved sophisti-cated levels of marketing, most notably thetourist industry. In other sectors, this weak-ness has been obviated by strategic corporatealliances, commodity agreements, and sub-contracting. In modern marketing one mustfirst listen to the market, then tailor the prod-uct to the desires of the consumers, and, onlythen, market the product.

Immediately, Jamaica needs to catch upwith new marketing techniques and technolo-gies, in particular, interactive electronic mar-keting.76 Interactive retailing can exist in manyforms, including personal computer userslinked to online services and Internet-based

retailers, multimedia kiosks, interactive homeshopping programs over cable and satelliteTV networks, and CD-ROM shopping catalogs.All of these media allow the consumer to pur-chase by telephone or computer and to paywith a credit card, reducing retailers’ costs forproduct storage and display areas.77

The need to develop electronic marketingis suggested by the fact that more than one-third of all households in the United States(Jamaica’s largest export market) own person-al computers, and the number is growing at arate of approximately 35 percent per year.78

The number of Internet users has grown from25 million in 1993 to 90 million in 1995 and isprojected to reach 1 billion by the year 2000.79

Jamaica must project a new national imageto the global marketplace, as part of theframework of a national marketing plan.Jamaica already has a positive image basedlargely on tourism advertisements and oninteractions with Jamaicans living abroad.Jamaica’s current image, however, is not suffi-ciently businesslike because of current adver-tising’s stress on leisure and a “laid-back” atti-tude. In fact, Jamaica’s tradition of excellenceis founded upon the reputation of Jamaicansas enterprising and hardworking. Jamaica hasthe potential of becoming an internationalbusiness center, as the essentials of a stablegovernment, a dynamic market-driven econo-my, and a highly skilled labor force arealready in place.

Garnering Capital, Technology, and Skills

Mobilizing capital, technology, and individ-ual skills is necessary for effective com-

petition in the global marketplace. Theseinputs, necessary for development, can begarnered in the global marketplace. Jamaicahas signed bilateral investment treaties (BITs)with several capital exporting countries,including the United States, Great Britain,Holland, and Switzerland, and is currentlynegotiating with China. These BITs enhanceJamaica’s attractiveness to foreign investorsbecause they provide a predictable legalframework for investment. In addition, access


to new technology has been enhanced by therecently concluded U.S.-Jamaica IntellectualProperty Rights Agreement.

There is a great need to implement theseactions as quickly and as effectively as possi-ble. As mentioned earlier, however, one of themost important of these actions is to abandonthe traditional mindset and adopt a service-oriented growth model. The following sectionexamines Jamaica’s potential for expandingservices.

Potential for Expanding Service Sector

Undoubtedly, there will be some new man-ufacturing industries in which Jamaica can

successfully participate. Consolidating existingindustrial production, improving cost efficien-cy, and enhancing the quality of existingexports from mineral processing, agro-indus-try, and manufacturing are all important com-ponents of Jamaica’s economic future. Therecently formulated National Industrial Policy80

will, among other things, attempt to addressthe reliance on old technology, low capacityutilization, lack of inter-industry linkages, andshortage of skilled labor.81

Despite the importance of traditionalindustry, the fundamental point is that indus-trialization is not the panacea it has beenassumed to be, and now the focus of eco-nomic strategy should be shifted toward thedevelopment of services for sale to the globaleconomy.

The distinction between service and manu-facturing firms is becoming increasingly diffi-cult to make since individual firms are becom-ing involved in more diversified economicactivities. In 1994, for example, GeneralElectric, known as a manufacturing company,earned 40 percent of its revenues from servicecomponents of its business. Several ofJamaica’s large companies, Grace Kennedyand Company, for example, already exhibitthis type of corporate diversification.82

Given the rapid expansion of services inthe global economy, and given Jamaica’s com-parative advantage in exporting services, there

should be an immediate, concerted drive toposition Jamaica in the global market for ser-vices. This strategy includes expandingJamaica’s existing services, such as tourismand data processing, which have alreadyattained international standards in productivityand are competitive in the global marketplace.Actually, Jamaica is already well on its way tobecoming a service-dominated economy.

Aside from expanding existing services,Jamaica needs to establish new services cru-cial for strategic repositioning. The prerequi-site for taking advantage of new, non-tradi-tional investment opportunities is the capacityto risk thinking of new ventures and toattempt to supply goods and services thathave not been supplied by Jamaican compa-nies in the past. The following section 1)examines Jamaica’s unique characteristics thatmake it well positioned for a service-exporteconomy and 2) examines specific servicesthat may play major roles in repositioning theJamaican economy.

Jamaica’s Unique Position in the Global Economy

Jamaica does have a number of characteris-tics that make it well-positioned for moving

in the direction of service exports. One of themost important features of Jamaica as itattempts to adjust to global transformations isits location. Jamaica’s location — in the centerof the Caribbean Basin and in the center ofthe Western Hemisphere — makes it a naturalhub for shipping (transshipment and bulk-breaking) and airline traffic. Close proximityto the United States will facilitate delivery of awide range of services, particularly thoseinvolving direct interaction with consumers, asis already the case for tourism.

As an advanced economy, the UnitedStates is in a continuous process of sheddinglabor-intensive activities. Many of these ser-vices will be supplied from overseas, or U.S.consumers will have to travel abroad to findaffordable health care and retirement services.A concerted effort should be made to capital-ize on Kingston’s location to transform it intothe international business center of the


Caribbean.83 Cities that have become globalbusiness centers provide their homeeconomies with an essential component ofsuccessful participation in international tradeand finance.84

A second important characteristic ofJamaica is that English is the primary lan-guage. Thus, Jamaica has an advantage overits immediate neighbors in Central Americaand the Caribbean, where Spanish or Frenchare the principal languages. English is still thelanguage of international business, and theEnglish-speaking U.S. market is still the largestin the hemisphere.

Relatively low-cost labor is another impor-tant factor that will enable Jamaica to competein the global market. Compared to industrial-ized countries and many developing coun-tries, Jamaica still has relatively low laborcosts; yet, it is still capable of high productivi-ty in the right circumstances. In addition,Jamaica can draw upon a large pool of skilledJamaican professionals who want to returnfrom abroad. Repatriation of skilled nationalsliving abroad has been important recently inSouth Korea, Taiwan, India, and China, coun-tries where skilled professionals with highereducation and business experience havereturned home from the United States andelsewhere.85

Jamaica has produced, over severaldecades, products and services that are heldin high regard in the world market, includingrum, coffee, apparel, and award-winninghotels. The achievement of the highest stan-dards in these products and services over somany years is not accidental nor fortuitous.Rather, they indicate Jamaicans’ capacity forexcellence, and there is no reason why thissuccess should not be attained in new andexisting economic activities.

Part of Jamaica’s excellent reputation forcertain products and services is the result ofits proven managerial capacity. Particularcases stand out for their competitive pricesand quality. The achievements of the baux-ite/alumina companies and of many hotels,for example, demonstrate this capacity. In

1994, Jamaica was voted “Caribbean Island ofthe Year” by Caribbean World and Travelmagazine, and Sandals was rated the number-one resort chain in the travel industry byCruise and Vacation View magazines. TheSuper Clubs chain has also won several inter-national awards. It should be possible toachieve similar standards and competence inother sectors.

In addition to managerial capacity inJamaica, there has been an explosion ofentrepreneurship in the country in recentyears. There is a new group of entrepreneurswhose business acumen has been honed bythe adversity of economic difficulties over thelast two decades. These groups are formingmultinational corporations by establishingoverseas factories, insurance companies,banks, building societies, and hotels. Jamaicanmultinationals operate in Great Britain,Canada, United States, Puerto Rico, theCayman Islands, Cuba, Panama, Trinidad andTobago, Barbados, Belize, Antigua, and St.Lucia. These entrepreneurs and representativecorporations have demonstrated the capabili-ty, innovation, technical sophistication, andinformed risk-taking necessary for survival inthe global marketplace.

The fact that Jamaica is now a market-dri-ven economy complements Jamaica’s otherunique characteristics. The government hasremoved the major constraints on privateenterprise and the restrictions and regulationsthat had previously inhibited the operations ofthe market. This process has involved a com-prehensive program of trade liberalization,involving the elimination of quotas andimport licensing and a substantial reduction intariffs. Exchange controls have also beenabolished, and there is a market-determinedexchange rate system. Rent controls havebeen discontinued, and price controls arenow limited to a few items.

These changes have been accompanied bytight fiscal and monetary policy, reflected inan improved fiscal and balance of paymentposition. Steps have also been taken to ratio-nalize the civil service, reduce its costs, andimprove its efficiency. The public sector has


been trimmed significantly through a compre-hensive privatization program. Major privatiza-tions include Air Jamaica, telecommunications,hotels, and sugar factories.

One more characteristic of Jamaica shouldalso be mentioned. Jamaicans have an exten-sive network of transnational communal eco-nomic networks. In some cases, these infor-mal economic networks, based on race, cul-ture, religion, and nationality, may be global.Shared values and a sense of identity permitrapid transnational economic exchanges, suchas trade and transfers of money. Jamaica’stransnational networks need to be nurtured,facilitated, and put to greater use. Theseefforts involve an initial recognition thatJamaica is a “nation without borders.” Theimportance of such networks for economicprosperity is illustrated in practice and inanalyses such as Kotkin’s work on “globaltribes.”86

Sector-Specific Potentials for Jamaican Services

Without doubt, Jamaica has the necessarycomponents and attributes for strategi-

cally repositioning its economy in the direc-tion of service industry exports. A number ofspecific services in Jamaica have distinct pos-sibilities for expansion and deserve specialattention.

Tourism

In Jamaica, employment in the tourismsector already accounts for 8 percent (72,000individuals) of the total labor force in full-timeemployment. Jamaica already provides a widerange of tourist accommodations, with all-inclusive resort hotels playing a prominentrole. However, there is room to explore newavenues and attract new segments of the mar-ket. Already, the Jamaica Tourist Board plansto spend 70 percent of its 1995-1996 budgeton marketing efforts and is beginning toexamine the feasibility of expanding into eco-tourism. Within the last three years, theTourist-Board has also developed innovative,fairly successful programs to attract new mar-kets. However, if tourism is to remain a viable

option for Jamaica in the twenty-first century,the country must move beyond these initia-tives to consider other possibilities, such ascombining health care with tourism.87 Theneed to develop new aspects of tourism ismade more urgent by the return of lower costdestinations (such as Haiti and especiallyCuba) to the tourist market.88

Health Care and Retirement Communities

The high cost of health care in the UnitedStates makes it cheaper for individuals to flyto Jamaica, receive treatment, spend timevacationing, and still save money. Electiveprocedures, such as cosmetic surgery, physio-therapy, and spa treatments, could be madeavailable in Jamaica at a fraction of the U.S.cost. Cuba has seriously pursued this opportu-nity since 1988 and, by 1994, received nearly4,900 patients from all parts of the world,though most were from Latin America and theCaribbean. Furthermore, an increasing numberof U.S. residents are going to Mexico for treat-ment because the cost of a doctor’s visit thereis as much as 80 percent lower than in theUnited States, and some drugs are up to 75percent cheaper.89

Health tourism is not an entirely newaspect of the local tourist industry. In fact, theorigins of Jamaican tourism were closely relat-ed to the health needs of visitors. The RoyalCourt Hotel is already trying to cater toretirees by keeping a physician on the premis-es and making spa facilities available.90

Usually, off-shore health care and healthtourism emerge from an existing modernworld-class health sector. However, thissequence could occur in reverse. In otherwords, the creation of a modern health sectorcatering to overseas clients would have signif-icant spin-off benefits in upgrading the healthsystem throughout Jamaica. In addition, thiscould mean that Jamaicans would no longerhave to travel abroad for certain kinds ofmedical treatment but could have them pro-vided by local facilities with payment in U.S.dollars.


The immediate comparative cost advantageis revealed by the fact that a nurse in theUnited States makes US$32,000-$44,000 peryear, while the top salary for a nurse in thepublic health system in Jamaica is US$16,000per year.91 Obviously, nurses working in theprivate hospital system in Jamaica that cater toan overseas clientele (based on U.S. currency)would receive salaries substantially higherthan the prevailing rates in Jamaica but signifi-cantly lower than U.S. rates.

Health care services would not only be anattraction for occasional visitors but could alsocomplement the country’s attraction for per-manent retirees. Jamaica’s close proximity tothe United States, its year-round warm weath-er, and its low wage levels constitute an envi-ronment suitable for the development ofretirement communities. This sector wouldnecessarily not compete with tourist areas, asretirees generally prefer the cooler hill loca-tions, such as those in Costa Rica.92 There isnow a trend toward U.S. citizens retiringabroad because their incomes purchase moreabroad than in the United States.

In addition, the day is rapidly approachingwhen there will be multinational hospitals. Ahospital in Washington, D.C., might own afacility in Jamaica to which it could refer cer-tain cases. There is also a huge market forretirement homes offering custodial care. Thismarket would not only permit Jamaican doc-tors and nurses to earn foreign exchange butwould also help stem Jamaica’s loss of med-ical personnel and help rebuild the health ser-vice.93

Comparative composites for the cost ofretiring in various locations reveal thatJamaica is relatively inexpensive. Jamaica isless expensive than the following retirementarea: Sarasota, Florida; Okandgan Valley,Canada; Western counties of Ireland; suburbsof San José, Costa Rica; and Guadalajara/LakeChapala, Mexico.94

Informatics/Information Processing

In other countries around the world, com-parative advantages have attracted new busi-nesses in the information sectors, but Jamaicahas not fully capitalized on such advantages.In India, where computer expertise is relative-ly inexpensive, computer software exportshave grown tremendously: exports in 1993totaled over US$500 million, a substantialincrease from the US$74 million total in1985.95 The industry has continued to growrapidly, with 61 percent of these exports soldin the United States.96 Another case in Irelandfurther illustrates the comparative advantagesfor this service industry. Cigna, a largeAmerican health care company, is one of sev-eral U.S. companies that has set up backoffices in the Irish countryside and have takenadvantage of advanced telecommunicationstechnology in order to reduce labor costs. Thebranch office in Ireland handles around 5,000medical claims per day, which is equivalent to20 percent of Cigna’s business. The paper-work from doctors, patients, and corporateclients across the United States is flown toIreland from New York’s John F. KennedyAirport, then collected by courier and drivento the processing site. The information is thenentered into the computer in Ireland andtransmitted through fiber optic cables back toCigna’s headquarters in Delaware, where(because of the time difference) it arrives intime for the following day’s business.97

Jamaica has not fully capitalized on theopportunities for overseas sales by the infor-mation processing industry, despite the factthat it was identified by both public and pri-vate sectors as “an area for immediateaction.”98 There is further room for expandingJamaica’s information processing activities. Atthe present time, about 45 companies areinvolved in electronic data processing,employing 6,000 people — up from 4,000workers two years ago. The government’snew policy, which allows companies outsidefree zones to enjoy tax-free benefits, and thegovernment’s commitment to computer train-ing initiatives, such as “Jamaica 2000,” should


encourage more companies to considerJamaica for their operations. Already, one U.S.company, ISADRA International, has beenapproved to operate as a single-entity freezone. The company will bring capital invest-ment of US$2.4 million and initially willemploy 76 Jamaicans.

Business Support Services

The financial sector in Jamaica has grownrapidly: gross assets of the commercial/mer-chant banking sector have increased fromJ$69.2 million in 1989 to J$1.1 billion in 1994.In addition, institutions have been spreadingtheir corporate reach to the internationalarena. The insurance industry has expandedto CARICOM, Panama, and the DominicanRepublic, while the Building Societies haveestablished branches in Great Britain. A num-ber of commercial banks have opened officesin the United States and Great Britain. In thearea of off-shore financial services, theBahamas, the Cayman Islands, and, to a lesserextent, Barbados have been involved in off-shore banking since 1979.99 Jamaica has theright factor mix of lower wages and closeproximity to be a convenient, cost-effectivelocale for back-office operations such as dataprocessing and accounting.

Jamaicans have been purveyors of profes-sional services to regional markets and to themultilateral financial institutions and interna-tional agencies. Because of the absence of afree trade regime in services in the region,professional services activities are confined tothe national level. There are niche marketsoutside the region that a few larger compa-nies have exploited, often in partnership withforeign firms. The biggest of these firms areinvolved in engineering and construction.Technology for low-cost housing, developedby Jamaican companies, has been exported toTrinidad and Tobago, Belize, and Nigeria.There are some constraints facing these firms,such as resource limitations, limited ability todo market research, high cost of bidding,slow payments from overseas clients, and, ofcourse, lack of staff with hands-on experiencein the consulting process itself.

With regard to infrastructure, Jamaica rateshigh among developing countries. With mod-ern international airports and well-equippedseaports, cargo and passenger transportationare easy. Over 30 international shipping linescall regularly and provide oceanic and feedershipping services to the two international sea-ports — one in Kingston and the other inMontego Bay. Port Bustamante in Kingston isa modern container transshipment terminal,located on the world’s seventh-largest naturalharbor. The port has five cargo gantry cranescapable of servicing any container ship afloat.In addition to the container terminal, the porthas nine break-bulk wharves, roll-on/roll-offfacilities, and a cruise ship pier. An expansionand upgrading program costing US$80 millionis now in progress.

Entertainment

It has been estimated by the RecordingIndustry Association of America (RIAA) that 27million units of Reggae albums, compactdiscs, cassettes, and single recordings weresold in the United States between 1992 and1993, earning a revenue of approximately$270 million. The British PhonographicIndustry (BPI) stated that “Dance/Soul Reggaemusic traditionally accounted for 10 percentof the album market.” Urban contemporarymusic, which includes Reggae, accounts for 7percent of global recording sales of an esti-mated US$25.8 billion. As cited in thePlanning Institute of Jamaica’s publication, theBPI reports that 4.5 percent of the singlessales and 7 percent of the album sales sold inthe United Kingdom are performed or writtenby Jamaicans.100 Despite the international suc-cess of Jamaican music, the industry has limit-ed formal organization.

Given the vast potential of the entertain-ment industry, the government should moverapidly toward the creation of an internationalsatellite channel devoted to the promotion ofreggae music. This initiative could prove to beextremely valuable, considering the fact thatan estimated 99 percent of U.S. households,60 percent of British households, and 75 per-cent of Japanese households have a radio.


Furthermore, 98 percent of all U.S. house-holds have at least one television. Such wide-spread media are ideal mechanisms for thespread of one of Jamaica’s most well-knownexports — reggae music.

Apart from music and music videos, film-making has significant potential in Jamaica.This potential is illustrated by a series ofrecent productions in the country. In additionto natural attractions, Jamaica offers tax con-cessions and duty exemptions.101 To encour-age this lucrative industry, much more needsto be done, including an aggressive campaign,such as Ireland’s, to attract film companiesand productions.102

Jamaica has tremendous potential forexpanding tourism and entertainment servicesto the global market. Some action has beentaken by the government of Jamaica, andsome action has been taken by Jamaicanentrepreneurs and corporations, but greatercooperation between public and privategroups is necessary to make global reposition-ing a reality for Jamaica.

Implementing Strategic GlobalRepositioning:

Private-Public Cooperation

Jamaica can make its transition through acombination of proactive adjustment and

strategic repositioning in the global economy.Strategic planning is a process of continuousdialogue and interaction among the leadershipof the private sector, the public sector, tradeunions, and social sectors. This process canbe augmented by inputs from individuals andorganizations abroad. Close, continuous coop-eration among the leaders of these sectors isessential in order to formulate strategic plan-ning and targeted implementation. What isneeded is a marriage that harnesses the visionand expertise of both the public and privatesectors. This cooperation has been a criticalfactor in the economic successes of Japan andthe NICs of Asia, particularly with respect toprivate-public sector synergy and the alloca-tion of decisions between the market andpublic administration.103

Jamaica’s economic horizon, as reflected inthe private sector’s view of returns on invest-ment and in the government’s time frame ofeconomic policy, needs to be extended to thelong term. In recent years, the planning per-spective was shortened by the need to satisfyquarterly quantitative performance criteria inthe International Monetary Fund (IMF) pro-grams of the last 20 years. There is a need formore extensive long-term strategic planning,including “scenario building,” especially withrespect to anticipating the impact of worldevents. In addition, there is a need for far-sighted strategic planning to convert Jamaicainto a Western Hemispheric “techno-pole.”

Conclusion

The key to transforming an economy from“developing” to “developed” is ensuring

that the right policies, institutions, and infra-structure are in place at the right time.104

Jamaica can achieve this transformation if itundertakes a process of strategic global repo-sitioning. Global economic trends are current-ly at a favorable juncture, and other countriesare already moving to take advantage of theseopportunities. At this time, the opportunity isat hand, and Jamaica must seize the moment.



1. Peter Dicken, Global Shift: TheInternationalization of Economic Activity (New York:Guildford Press, 1992) 16.

2. I n t e rnational Trade: Trends and Statistics(Geneva: World Trade Organization, 1995) 15.

3. Ernst H. Preeg, Trade Policy Ahead: Three Tracksand One Question ( Washington, D.C.: Center ForStrategic and International Studies, 1995) 6-7.

4. For discussion on the globalization of finance, seeRichard O’Brien, Global Financial Integration (NewYork: The Royal Institute of International Affairs Councilon Foreign Relations Press, 1992); and Dimitris N.Chorafas, The Globalization of Money and Securities(Chicago: Probus Publishing Company, 1992).

5. Wriston points out that instant global communica-tions and computers have resulted in an “informationrevolution,” which makes national boundaries increas-ingly irrelevant, undermining “sovereignty.” See WalterB. Wriston, The Twilight of Sovereignty (New York:Charles Scribner’s Sons, 1992).

6. For more information on Latin American integra-tion, see Richard L. Bernal, Regional Trade Arrangementsin the Western Hemisphere,” The American UniversityJournal of International Law and Policy 8, 4 (Summer,1993) 683-718. The rise of regionalism in Asia-Pacificregion has been steady and extensive. See Norman D.Palmer, The New Regionalism in Asia and the Pacific(Lexington: Lexington Books, 1991).

7. In October, 1991, the member countries of theAssociation of South East Asian Nations (ASEAN) for-mally announced their intention to form an Asian FreeTrade Area (AFTA) with the objective of creating a singlemarket in 15 years. See Lim Siong Hoon, “ASEAN TablesFirst Step to Regional Customs Grouping,” FinancialTimes, October 1991.

8. Lester Thurow, Head to Head: The ComingEconomic Battle Among Japan, Europe and America(New York: William Morrow. Co., 1992) 203-218. It hasbeen argued that firms not securely established in the“Triad,” e.g. U.S., Japan, and Europe, will not surviveglobal competition. See Kenichi Ohmae, Triad Power.The Coming Shape of Global Competition (New York:Free Press, 1985).

9. Caroline Southey, “Brussels Plans Re-appraisal ofLOME Links,” Financial Times, February 14, 1995.

10. For information on negotiations with SouthAfrica, see Katherine Butler, “Tight Fists, Free TradeThreaten Preferences for Ex-EU Colonies,” Journal ofCommerce, November 2, 1995. For information on Latin

America, see Nathaniel C. Nash, “Europe Seeks LatinFree-Trade Ties,” New York Times, December 7, 1994;David Jessop, “When LOME IV Expires,” S u n d a yO b s e r v e r, October 29, 1995; and Latin AmericanNewsletters, “Mercosur Marks Anniversary by SigningLandmark Accord with European Union,” L a t i nAmerican Regional Reports — Southern Cone Report,December 28, 1995, 1.

11. Richard L. Bernal, “The Caribbean Basin FreeTrade Agreement Act” (H.R. 1403) in Hearing before theSubcommittee on Trade and the Subcommittee onOversight of the Committee on Ways and Means, Houseof Representatives, 103rd Congress, 1st session, June 24,1993 (Washington, D.C.: U.S. Government PrintingOffice, 1993) 68-75.

12. Coping with Changes in the Extern a lEnvironment (Washington, D.C.: World Bank, CaribbeanDivision, Report No. 12821, LAC, June, 1994) 115.

13. Potential Effects of a North American Free TradeAgreement on Apparel in CBERA Countries (Washington,D.C.: United States International Trade Commission,Publication 2542, 1992).

14. See Richard L. Bernal, “From NAFTA ToHemispheric Free Trade,” Columbia Journal of WorldBusiness, XXIX, Number 3, Fall 1994; and Bernal, “TheCompatibility of Caribbean Membership in Lomé,NAFTA, and GATT,” Social and Economic Studies 43, 2(June 1994).

15. World Bank, Annual Report 1992 (Washington,D.C.; World Bank 1992). See also, “IMF World EconomicOutlook,” Financial Times, April 24, 1994.

16. Trade and Development Report, 1993 (New York:United Nations, 1993) 20.

17. Peter F. Drucker, The New Realities (New York:Harper & Row, 1989) 122-123.

18. Fortune, June 3, 1991, 45.

19. World Bank, Annual Report 1993 (Washington,D.C.: World Bank, 1993) 33.

20. Ian Davidson, “Shifting Strategy for Aid,”Financial Times, February 15, 1995.

21. World Bank, World Development Report 1995(New York: Oxford University Press, 1995) 204-205.

22. Empirical studies of the Untied States show thatre-engineering coupled with computerization haveresulted in enormous increases in efficiency, productivi-ty and returns on investment. See “The TechnologyPayoff,” Business Week, June 14, 1993, 57-68.

NOTES

23. Michael Hammer and James Champy, Re-engi -neering the Corporation (New York: Harper Collins,1993) 32.

24. Fortune, January 24, 1994, 31-32.

25. Kirstin Downey Grinsley, “The Ax That CutsBoth Ways,” Washington Post, November 5, 1995.

26. John Naisbitt, Global Paradox (New Yo r k :William Morrow, 1994).

27. See Joseph L. Badaraco, Jr., The Knowledge Link:How Firms Compete through Strategic Alliances (Boston:Harvard Business School Press, 1991); and Martin K.Starr, Global Corporate Alliances and the CompetitiveEdge (New York: Quorum Books, 1991).

28. Small firms taking advantage of market nichesare discussed by Tamir Agmon and Richard L. Drobnick(eds.), Small Firms in Global Competition (New York:Oxford University Press, 1994). Michael H. Best discuss-es flexible specialization in “A Pro d u c t i o n - o r i e n t e dIndustrial Policy: The Case of Jamaica,” in Keith Cowlingand Roger Sugden (eds.), Current Issues in IndustrialEconomic Strategy (New York: Manchester UniversityPress, 1992). Alvin and Heidi Toffler discuss economiesof speed in Creating a New Civilization: The Politics ofthe Third Wave (Atlanta: Turner Publishing, 1995) 47.

29. Michaly Simai (ed.), Global Employment. AnInternational Investigation into the Future of Work 1(London: Yed Books, 1995).

30. Tim Burt, “The West Embarks on Long March toa Low-wage World,” Financial Times, September 21,1995, 17.

31. Simai 1995.

32. Michele Kayal, “We s t e rn Firms Step UpInvestment in East Europe,” Journal of Commerce, April28, 1994.

33. Jeremy Rifkin, The End of Work. The Decline ofthe Global Labor Force and the Dawn of the Post-MarketEra (New York: G.P. Putman’s Sons, 1995).

34. The expansion of robotics is discussed in“Reaching Further in Industry,” Financial Times, June 6,1995, 12.

35. Bethan Hutton, “Breaks with Tr a d i t i o n , ”Financial Times, October 3, 1995, 12.

36. Peter F. Drucker, The New Realities (New York:Harper & Row, 1989) 123.

37. Manuel Castells and Peter Hall, Technopoles ofthe World: The Making of 21st Century IndustrialComplexes (London: Routledge, 1994).

38. Laurence Busch, William B. Lacy, Jeff re yBurkhardt, and Laura Lacy, Plants, Power and Profit:Social, Economic and Ethical Consequences of the NewBiotechnologies (Cambridge, Mass.: Blackwell, 1992).

39. Shoshana Zuboff, In the Age of the SmartMachine: The Future of Work and Power (New York:Basic Books, 1988).

40. See Robert B. Reich, The Work of Nations (NewYork: Alfred A. Knopf, 1991).

41. Charles Handy, The Age of Unreason (Boston:Harvard Business School, 1989) 32.

42. Phedon Nicolaides, Liberalizing Trade inServices. Strategies for Success (New York: Council onForeign Relations Press, 1989) 19-24.

43. Hamish McRae, The World in 20-20. Power,Culture and Prosperity: A Vision of the Future (London:Harper Collins Publishers, 1994) 27.

44. Liberalizing International Transactions inServices: A Handbook (New York and Washington, D.C.:United Nations Conference on Trade and DevelopmentProgramme on Transnational Corporations and TheWorld Bank, 1993) 6-7.

45. Hamish 1994.

46. Occupational Outlook Handbook, 1992-93 edi-tion (Washington, D.C.: U.S. Department of Labor, May1992) 10.

47. World Bank, Global Economic Prospects and theDeveloping Countries, 1995 edition (Washington, D.C.:World Bank).

48. Peter Schwartz, The Art of the Long View (NewYork: Doubleday, 1991). For a study applying “strategicplanning scenarios,” see Daniel Ye rgin and ThaneGustafson, Russia 2010: What It Means for the World(New York: Vintage Books, 1994).

49. Richard L. Bernal, “The Great Depre s s i o n ,Colonial Policy and Industrialization in Jamaica,” Socialand Economic Studies 37, 1 and 2 (March-June, 1988) 33-64.

50. W. Arthur Lewis, “The Industrialization of theBritish West Indies,” Caribbean Economic Review 2, 1(1950) 1-61.

51. Havelock Brewster and Clive Y. Thomas, TheDynamics of West Indian Economic Integration(Kingston: I.S.E.R./UWI, 1967).

52. Occupational Outlook Handbook 1 9 9 2 - 9 3(Washington, D.C., U.S. Department of Labor, May 1992)10.


53. For a discussion on the revamped industrial pol-icy, see Donald J. Harris, An Approach to IndustrialPolicy for Jamaica (Kingston: Planning Institute ofJamaica, 1995). For further analysis on how govern-ment should approach industrial policy, see MalcolmSawyer, “On the Theory of Industrial Policy” in KeithCowling and Roger Sugden (eds.), Current Issues inIndustrial Economic Strategy (New York: ManchesterUniversity Press, 1992) 10; and Michael Best, The NewCompetition: Institutions of Industrial Restructuring(Cambridge: Harvard University Press, 1990) 20.

54. Wa r ren Cohen and John Simmons, “FastCompanies,” U.S. News and World Report 119, 1 (July 3,1995) 42-45.

55. Information technology has not merely added anew dimension to the way business is conducted, buthas altered fundamentally the nature, management ando rganization of business, see Stan Davis and BillDavidson, 2020 Vision (New York: Simon and Schuster,1991) and Shoshana Zuboff, In the Age of the SmartMachine (New York: Basic Books, 1988).

56. Mark Dennis, “Israel Pins Expansion Hopes on‘Television fruit,’” Financial Times, July 6, 1995, 23.

57. John Waiter, “Tomorrow is Here,” Bobbin, 36, 11(July, 1995) 39.

58. A. Reyes-Pacheco, An Option for CaribbeanAgriculture Development: Tropical Boutique Agriculture(Kingston: Inter-American Institute for Cooperation onAgriculture, May, 1992).

59. Lori Ann Thrupp, Bitter Sweet Harvests for GlobalS u p e rmarkets. Challenges in Latin America’sAgricultural Export Boom ( Washington, D.C. Wo r l dResource Institute, August, 1995) 18-19.

60. For a look at worker relations and attitudes, seeCarl Stone, Work Attitudes Survey: A Report to theJamaican Government (Kingston: Earle Publishers,1982).

61. The East Asian Miracle (Washington, D.C.: WorldBank, Oxford University Press, 1993) 43-46.

62. Micko Bunc, Global Economy in the Age ofScience-based Knowledge (New York: United NationsInstitute for Training and Research, 1992).

63. M. Alister McIntyre, Human Resourc e sDevelopment: Its Relevance to Jamaica and theCaribbean (Kingston: Grace Kennedy Foundation, 1990)18.

64. Cecil A. Goodridge, “The Role and Function ofthe National Council on Technical Vocational Educationand Training.” Paper presented at the Te c h n i c a l

Vocational Education and Training Conference, Jamaica,June 15, 1995; and Ministry of Education, Youth andC u l t u re, Five Year Development Plan 1995-2000.Technical and Vocational Education and Tr a i n i n g(Kingston: The Five Year Development Plan Committeefor Technical and Vocational Education and Training,April, 1995).

65. Lila Sarick, “Canada Strives to Woo UpscaleImmigrants,” The Globe and Mail, June 7, 1995.

66. Joyce Barnathan, et al., “Passage Back to India,”Business Week, July 17, 1995, 44-46.

67. ”Feeding Frenzy on the Continent,” BusinessWeek, May 18, 1992, 64-65.

68. “Feeding Frenzy...,” Business Week.

69. ”Nissan to Buy Auto Parts From a ToyotaAffiliate,” The Wall Street Journal, May 14, 1993.

70. ”Flour Daniel, ICA Form Jointly OwnedCompany,” The Journal of Commerce, May 19, 1993.

71. For details on these respective cases, see “NigeriaDelegation’s Visit is Boost for South Africa,” The Journalof Commerce, May 19, 1993; “China Joins Taiwan - LedChemical Deal in Malaysia,” The Journal of Commerce,May 19, 1993; and “Toshiba to Work With Samsung onFlash Chips,” New York Times, December 22, 1992.

72. Intra-firm trade is discussed by Gerald K.H e l l e i n e r, in I n t r a - F i rm Trade and the DevelopingCountries (London: Macmillan Press, 1981).

73. Jordon Bonfante, “Sky’s The Limit,” Ti m e ,September 6, 1993, 20-26. See also “Software Valley,” TheEconomist, April 23, 1994) 69-70.

74. Conner Middleman, “The Joys of Homework,”Financial Times, July 8 and 9, 1995.

75. Daniel Green, “SIA Considers MovingDepartment to India,” Financial Times, October 13,1992.

76. For a discussion of such technologies, see“Reinventing the Store,” Business Week, November 27,1995, 84-96.

77. Tom Foremski, “Interactive Retailing: LatestTechnologies,” Financial Times, October 4, 1995. Seealso “Merchants of Cyberspace,” Sunday Ti m e s ,November 19, 1995.

78. Paul Taylor, “Retailers Wake Up to ‘Cyberspace,’”The Financial Times, October 4, 1995.

79. John Wiater, “Tomorrow is Here” Bobbin, 36, 11(July, 1995) 39.


80. National Industrial Policy — Growth &Prosperity: The Way Forward — A Strategic Plan forG rowth and Development (Kingston: The JamaicaInformation Service, March 1996).

81. Alvin G. Wint and Gordon V. Shirley, “Enhancingthe International Competitiveness of the JamaicanManufacturing Sector: The Role of Government Policy,”Department of Management Studies, University of theWest Indies, Mona, Jamaica, March 21, 1995.

82. Hermann von Gersdorff, “Development ofCaribbean Service Exports: An Overview,” paper pre-sented at the University of the West Indies Conferenceon “Prospects for Service Export Development in theEnglish-speaking Caribbean,” Jamaica, May 13, 1995.

83. Jamaica must study the attributes of cities thathave become centers of business. See Bill Saporio, “TheWorld’s Best Cities for Business,” Fortune, November 11,1994, 112-142.

84. Paul L. Knox and Peter J. Taylor, World Cities ina World System (Cambridge: Cambridge University Press,1995).

85. ”Have Skills, Will Travel - Homeward,” BusinessWeek, 21st Century Capitalism, 1994, 164-165.

86. Joel Kotkin, Tribes: How Race, Religion andIdentity Determine Success in the New Global Economy(New York: Random House, 1993).

87. George Alleyne, “Health and Tourism in theCaribbean,” Bulletin of PAHO 20, 3, 1990, 291-300.

88. Cuba, for example, is returning to the circuit ofcruise ship destinations in the Caribbean. See PascalFletcher, “Cuba Back on Cruise Circuit,” Financial Times,December 12, 1995.

89. Phillip J. Hilts, “Quality and Law Cost of MedicalCare Lure Americans on Border to Mexico,” New YorkTimes, November 23, 1992.

90. Lloyd Williams, “Health Tourism: One DoctorMakes Small Start,” Sunday Observer, June 4, 1995, 6.

91. ”Salary Survey,” U.S. News and World Report,November 1, 1993, 105.

92. Justin Martin, “Or, If You’d Rather, RetireAbroad,” Fortune, July 24, 1995, 94-95.

93. Felix Carrion Sanchez-Penichet, paper presentedat Conference on Prospects for Services Exports in theCaribbean, Montego Bay, Jamaica, May 13-14, 1995.

94. For further information, consult F o r t u n eMagazine, July 24, 1995; and the Planning Institute of Jamaica.

95. Edward A. Gargan, “India Among Leaders inSoftware for Computers,” New York Times, December 29,1993; and N. Visuki Rao, “India Posts 20% Growth inSoftware Exports,” Journal of Commerce, February 28,1994.

96. Paul Taylor, “Global Competitor with turnover of$1 billion a year,” Financial Times, December 6, 1995.

97. John Murray-Brown, “Fibre Optic Bridge,” TheFinancial Times, November 11, 1994.

98. Beverley Mullings comments on Jamaica’suntapped potential in “Te l e c o m m u n i c a t i o n sRestructuring and the Development of ExportInformation Processing Services in Jamaica” in HopetonS. Dunn (ed.), Globalization, Communications andCaribbean Identity (Kingston: Ian Randle Publishers,1995) 164-184. For the public sector’s evaluation of thisindustry’s potential, see Jamaica Five Year DevelopmentPlan 1990-1995 (Kingston: Planning Institute of Jamaica,1990) 84. For the private sector’s view on the potentialof this industry, see “Going for the Iceberg: A Blueprintfor Growth and Development of Export of InformationServices,” report prepared by the Information ServicesGroup of the Jamaica Exporters Association, 1989.

99. Trevor A. Carmichael, “International Banking,Barbados,” I n t e rnational Financial Law Review,September, 1991.

100. Pamela B. Watson, The Situational Analysis ofthe Entertainment (Recorded Music) Industry (Miami:Watson & Company Consulting Services, Inc., 1995).

101. The Nuts and Bolts of Filming in Jamaica(Kingston: Jamaica Promotions Corporation, 1995) 5.

102. Mike Burns, “Michael D’s Isle of Imagination,”Europe, July/August, 1995, 18-19. Also, Hugh Linehan,“Ireland Makes Its Own Luck,” The European Magazine,August 3-9, 1995, 6.

103. Robert Wade, Governing the Market: EconomicTheory and the Role of Government in East AsianIndustrialization (Princeton: Princeton University Press,1990).

104. Kenichi Ohmae, “Putting Global Logic First,Economics, Not Politics, Defines the Landscape onWhich All Else Must Operate,” Harvard Business Review,January-February 1995.


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