January 31, 2013
However, the cost to join the ranks of such global hubs is estimated
to cost Jamaica anywhere between US$8 and $10 billion. While Jamaica is
endowed with natural advantages, such as geographic proximity—it is the
island closest to Panama and home to the world’s seventh largest natural
harbor in the world—it is also saddled with a crippling amount of debt.
In order to successfully complete the daunting project before the
canal opens, Jamaica will have to dredge the Kingston harbour in order
to ensure that the massive ships will be able to enter port, expand
existing port facilities, construct a dry dock for ship repairs,
establish a transshipment commodity port, an air-cargo and passenger
facility at Vernamfield, and develop the Caymanas Special Economic Zone.
The Caymanas SEZ alone is a massive undertaking, consisting of a
1,500 acre site, with an independent energy source and integrated port
facility developed through a public/private partnership. The Jamaica
Investment Forum touts that this will be Jamaica’s first ever integrated
industrial zone in the country, with the potential to provide up to 21,000 jobs. The air-cargo facility at Vernamfield will also host a smaller export processing zone.
Jamaica’s Minister of Industry, Investment, and Commerce, Anthony Hylton, has stated that
plan is now the “flagship project” to stabilize the country’s economy
and that the government has elevated it to the status of a national
priority. The Government of Jamaica has estimated that the massive
project would provide a 17% increase in GDP for the country over the upcoming decade. Given that Jamaica’s economy has largely stagnated, the World Bank noting
that it had little and often no growth over the past 40 years, the
potential opportunity makes the project impossible to turn down.
Mr. Hylton argued that
“It is our opportunity to leverage the radical shift in the geography
of global trade to build and anchor an engine of growth that will
generate sustained growth and jobs for years to come.”
In his vision, the transformation goes much more beyond the
establishment of a transshipment and logistics hub. Proponents are
presenting and packaging the project as a savior that will literally
transform life on the island. “Jamaica’s surplus of professional and
skilled workforce will be a primary factor in the success of Jamaica’s
logistics hub and the corollary initiative such as the establishment of
an international financial services center. We will also be relying on
our robust and expansive telecommunications infrastructure across the
island as well as our extensive subsea fiber network,” Hylton added.
While the World Bank, Inter-American Development Bank, and promises
of private investment from companies based in China and Singapore look
promising in regards to covering much of the costs, the Caribbean has
been sold tales of modernization and prosperity before. While remaining
cautiously optimistic about the impact such a project would have upon
Jamaica, it would be important to remember how the Caribbean Basin
Initiative of the 1980s was designed to turn the Caribbean into an
archipelago resembling mini models of Taiwan and Singapore. It obviously
While it can be argued that the Caribbean lacked the infrastructure
needed to modernize in a similar way to the Asian tigers, the Caribbean
lost out in the long run primarily because it was cheaper to place
sweatshops in China and Mexico. Despite Jamaica’s committed drive to
construct the necessary facilities to serve as a logistics hub, it will
be in competition with similar deep harbour projects in the Bahamas, the
Dominican Republic, Costa Rica, Colombia, and even Cuba. Additionally,
the American ports of Miami and Jacksonville
are also hoping to steal some of the Caribbean’s thunder. Thus while
the upside is huge, it is not guaranteed by any means. It hinges on
promises of funding and completion targets being met in an extremely
narrow window of time.
Hopefully this project will serve as a national project for Jamaica,
galvanizing its potential and provide a light at the end of the tunnel.
However, if Jamaica is going to truly capitalize on such a project, it
cannot forget to make additional funds available for education and
social services. While Jamaica certainly has a pool of skilled workers
in the targeted sectors, the completion of such a project calls for a
great deal more. At the moment, Jamaica’s debt serving eats up 50% of the annual budget,
while health and education combined only accounts for 20%. Perhaps the
promise of the project will allow Jamaica to have more breathing room
from the World Bank and International Monetary Fund negotiations.
Whatever happens, the coming six months will be crucial in
determining whether promises of funding are kept and deadlines followed.
Despite the late start and magnitude of the project in comparison to
their other Caribbean competitors, Minister Hylton remained confident, stating that “We are late but we are an island of sprinters, so we can get there.”