World Bank Offers to Aid Jamaica's Logistics Hub Plans

Jamaica’s plans to become one of the world’s top four logistics centres has received a major boost after the World Bank committed to providing technical and other assistance for specific aspects of the proposed Global Logistics Hub initiative.  
 

The World Bank Group, through its representative to Jamaica, Giorgio Valentini, has endorsed the Government of Jamaica’s plans for the logistics hub initiative, describing it as ‘transformational’ when implemented which will significantly enhance Jamaica’s potential for growth.
 

A 16 person delegation from the World Bank Group visited Jamaica last month for consultations on Jamaica’s Country Partnership Strategy which will feature the Logistics Hub Initiative. The Country Partnership Strategy will govern the relationship between the island and the World Bank between 2014 and 2017. The World Bank Group (WBG) support includes issues such as Public Private Partnerships, infrastructure needs and infrastructure investment funds, facilitation mechanisms, energy needs, capacity building and providing a skilled workforce. The WBG is also concerned with providing a safety net for the most vulnerable in society.

High level discussions have already started with a number of overseas investors to develop vast areas of prime real estate to handle increased volumes of air and sea cargo. Projects under discussion include growth of container throughput at the Port of Kingston ahead of the expansion of the Panama Canal, as well as the development of commodity ports to handle petroleum products, coal, minerals and grain; the development of an air cargo strong hold through the expansion of existing airports and construction of an air cargo airport as well as the construction of large scale ship repair dry docks and aircraft maintenance, repair and overhaul facilities. Special economic zones are also being conceptualised by a wide range of local and foreign investors. 
 

Once completed the initiative, which is being spearheaded by the Jamaica Ministry of Industry, Investment and Commerce, will transform Jamaica into the fourth node or pillar in the global supply and logistics chain alongside Singapore, Dubai and Rotterdam. A critical element in the equation to make the Logistics Hub successful is the involvement of suitable, long-term investors. The Government of Jamaica is already in discussion with some prospective partners as well as looking for new ones.

The World Bank sees the initiative operating within the context of the Caribbean Growth Forum, a joint venture between the Inter-American Development Bank, the World Bank and the Caribbean Development Bank. The World Bank Group has already started to provide technical assistance in developing precursors of the master plan for the logistics hub and in support of the Port Community System.

To assess the ability of internal logistics to unlock the country, the World Bank Group has already started ground work on creating a GIS database, a trucking survey, a port and aviation survey, a regional trade survey, and an assessment of air, marine and ICT connectivity. This initial work should be completed by June 30, 2013, and will feed into the overall master plan. The master plan will serve to define how Jamaica should be positioned as a global hub, assess the internal logistics and the infrastructure and energy needs of the special economic zones being created  and demonstrate how the logistics potential of Jamaica can motivate international interventions plus attract private sector investment. 

The World Bank notes that thousands of jobs will have to be created to support the logistics hub. Efforts have already started to look at the training of human capital to fuel the needs of the hub and also strategically for export under special agreement with large markets like the US and Canada. This ‘export’ of Jamaican labour, can enhance the island’s comparative advantages of having the perfect geographical location, and a strong English speaking work force. Thousands of jobs are expected to be created in areas such as, mechatronics integration of marine engineering, (mechanical, electrical and informatics), various ship board professions such as electromechanical engineering, port operations management, heavy duty equipment operations, logistics and supply chain management.

Jamaica’s proposal to become the fourth node in the global logistics chain is a critical component  of the Government’s growth strategy. The recent IMF staff-level agreement on the key elements of an economic program to be supported by a 48-month arrangement under the Extended Fund Facility (EFF), in the amount of US$750 million calls for reforms to improve growth-generating efficiency through enhancements to the business environment, increased competitiveness, and strengthened institutional capacity. Despite considerable inertia within multilateral  circles due to Jamaica’s development record, the Global Logistics Hub Initiative has rekindled believe in the growth prospects of the country.

Meanwhile, the Minister of Industry Investment and Commerce, Anthony Hylton recently led a mission to Washington (February 18-22) to continue talks with the World Bank Group on additional areas of collaboration and support for the Logistics Hub.

The Jamaican Mission held a number of meetings with the World Bank, the International Finance Corporation(IFC), the Multilateral Investment Guarantee Agency (MIGA), the Inter-American Development Bank (IDB), and the Inter-American Investment Corporation (IIC).   Meetings were also held with US Chamber of Commerce and the US Trade and Development Agency. The US Chamber offered to promote the Logistics Hub among its membership while the USTDA is assessing specific components of the Logistics Hub for grant assistance especially where these activities support US trade and development. Separate meetings were held with  the law firms Curtis, Mallet-Prevost Colt & Mosle and also Sandler, Travis, Rosenberg.

A technical mission from the World Bank Group will again be in Jamaica from March 4-March 18 to commence work on the internal/external logistics assessment of the initiative.