By IPS Correspondents
KINGSTON, May 27 1998 (IPS)

With vital foreign exchange earnings from traditional exports, such as sugar and bananas now reduced to almost a trickle, entrepreneurs in this northern Caribbean island are trying to look to new products to pick up the slack.

But even these non-traditional exports, which once formed a vibrant sector seem to be failing, leaving many wringing their hands in despair and wondering where to turn next.

“From the late 1980s to the early 1990s, there was growth in non- traditional exports from about 15 to 20 percent,” says Jean Smith of the Jamaica Exporters Association (JEA). “We had a more stable macro- economic climate. Some companies were doing better.”

In 1989, total earnings from non-traditional export commodities were 255 million dollars, according to a social and economic survey released by the government’s Planning Institute of Jamaica (PIOJ). This grew every year, reaching a high of 464 million dollars in 1995, before experiencing gradual declines in the last two years.

In 1996, earnings from non-traditional exports such as apparel, fresh fruits, horticulture and soya-based milk amounted to 430 million dollars. Last year that figure stood at 400 million dollars.

“The first half of the decade was good for us,” says 39-year old Tanya Davis, who operates a small apparel business. “But recently, we have been operating at a loss, and we are thinking of closing down.”

Wesley Hughes, Director-General of the PIOJ, sees several reasons for the decline in the non-traditional exports.

“The fall-off in the value of apparel exports was the result of a loss of competitiveness of domestic producers relative to Mexican producers since the inception of NAFTA (North American Free Trade Agreement), which resulted in the closing of a number of firms,” Hughes says.

“Although a decline in apparel export earnings was recorded for the first time, there had been a progressive slowing in the rate of growth since 1992. The value of yam exports fell to 10.8 million dollars due to depressed world market prices,” he says.

Donna Williams is a small exporter. Her company exports yam, a starchy tuber to the United States. With exports in the region of 200,000 tonnes per year, this product is ranked as Jamaica’s most important non-traditional export crop. The decline in yam prices on the US market affected her adversely.

And she is not impressed by the PIOJ’s attempt to explain away the problems in the export sector by pointing fingers at global developments.

“They saw all these things happening, and they did nothing to help us,” says an angry Williams. “The government is more to blame than these so-called global markets.”

But still, the non-traditional export market is doing better than traditional exports. Aluminum prices have gone down and so too has sugar production.

“In the 1960s Jamaica produced in excess of 500,000 tonnes of sugar annually. In 1997 that figure stood at some 256,000 tonnes.

“The climate for both (traditional and non-traditional exports) is similar, except that for non-traditional exporters it is difficult to compete without a preferential market for your products,” Smith says. “With bauxite, alumina and sugar, despite the erosion of their preferences, there are still some benefits.”

It is generally more competitive and costly for exporters in non- traditional exports. Most of them entered the field 20 to 25 years ago, while sugar, for instance, has been around as an industry in Jamaica for 300 years.

“Non-traditional exporters are competing globally with other producers who are operating in an economy which has positive growth, low inflation, low interest rates, and more support in terms of marketing and research,” says Smith.

Yam, for instance is faced with growing competition from countries like Brazil and Costa Rica.

Overall, exports from the agriculture sector declined by 14.5 percent in 1997 while the manufacturing sector contracted by 2.5 percent.

Gross Domestic Product (GDP) declined by 1.7 percent, in effect canceling out the 0.5 percent growth in 1995.

“There is some level of fallout in the sector as a result of pressures imposed on the financial sector,” adds David Campbell, himself an exporter of fresh fruits to the US.

“Now, the whole industry is in a shambles, so it’s not easy to pick up the pieces.”

And Finance Minister, Omar Davies is not optimistic about the future of this sector.

“I have tremendous doubts about encouraging people to get into exports. I’m not enthusiastic, and I’m not sure which cards will be played,” he says.

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