Blockchain technology: a sustainability tool for agriculture
Block Chain Technology and Its Impact on Agriculture: Moving Towards Sustainable Agriculture, an amazing title for an amazing assignment by one of my students at Excelsior Community College in Kingston, Jamaica. My student Michelle Williams is reading for the Post Graduate Diploma in Logistics at the School of Business Management and Entrepreneurial Studies explains:
“Blockchain technology will help a farm or a nation to determine how sustainable their agricultural industry is as it accurately records information.”
For her engaging assignment can be please click here or read below.
The ability to not only collect but to analyze, visualize and weave data together into a compelling story is a powerful skill in today’s information age. What is more, data analytics and data visualization fields are emerging fields that are increasing in prominence in media outlets, governments, in business, etc. Therefore, individuals or organizations that develop this skill set have the ability to distinguish themselves by being able to tell their stories in visually compelling ways. There are several, free and paid, internet-based applications that let authors combine beautiful visualizations with narrative text, images, videos and social media – in this case Adobe Spark. The applications are designed to be attractive and usable by anyone, which makes them great for education and outreach, either to the general public or to a specific audience.
The assignment is to create graphically appealing story supported by research using the Adobe Spark platform by creating a Page. The subject is as follows: How block chain technology could be used to improve the sustainability in a particular industry, sector, product or business. Please note the students were free to select a particular industry, sector, product or business. In effect they are creating or suggesting an architecture for the use of block chain technology in the implementation of sustainability measures in an industry, sector, product or business that was of interest to them.
It is also important to note that block chain is on the cutting edge and putting them together with a sustainability frame work is very original and innovative.
Jamaica’s special economic zone framework designed to support private sector SEZ development
Its always a good idea to review your past work and accomplishments from time to time, you just never know what you will find. Such a review brings to mind the old adage what is old, is new; reviewing after some time gives you perspective and at times new insights. Conducting such an exercise led me to remember my participation as a panelist in 2014 on a Government of Jamaica policy dialogue: Jamaica’s Growth & Special Economic Zones Policy Dialogue. Some how I posted an article on my LinkedIn but not on Commercial Law International. What an oversight!
This oversight on my part has come to be a blessing in disguise as it allows me an opportunity to put out an article on Jamaica’s special economic zone (SEZ) policy and legislative framework, with particular focus on attracting private sector investment. This is especially timely given the continued roll out of Jamaica Special Economic Zone Authority, the Government of Jamaica’s, agency charged with regulating and attracting investments to zones in Jamaica. While this piece is a bit dated it never the less provides in brief some useful insights, in particular for the private sector, into the policy and legal framework of SEZs in Jamaica.
I was honored to be siting on the Private Zone Development, Joint Ventures and PPP Panel discussion today. Maybe its the nerd, sorry, I mean lawyer in me that gets so excited to talk about Special Economic Zone development models….its all about structuring the deal.
Please see the session brief below:
The Government of Jamaica (GOJ), in an effort to preposition itself in the world as a Global Logistics Hub, has identified Special Economic Zones (SEZs) as a key policy tool in achieving this objective. The main focus of SEZs is to attract foreign direct investment, diversification of the Jamaican economy, job creation and the increase in value-added exports. Policymakers are aware of the fact while economic zones bring about economic growth; they are not limited within themselves. The real value of economic zones depends on their ability to stimulate widespread growth through linkages with the domestic economy and to catalyze nationwide reforms by serving as pilots.
Drawing from numerous examples of successful SEZs around the world as well as Jamaica’s own experience with its existing Free Zone regime, the GOJ, is acutely aware of the potential direct and indirect impacts that could be realized by developing a modern SEZ regime as a tool for sustainable and globally competitive economic development. The GOJ, in order to realize the SEZ potential, has launched an effort to develop a new SEZ policy regime for Jamaica based on good economic and social practices in their operation and commercial principals in their development and management. Considering the vast investment potential of SEZ’s in Jamaica, the GOJ appreciates the importance of understanding the relevant economics, structures and processes that drive the successful implementation of SEZs. In this regard, the GOJ places great significance on the role of the private sector in SEZ development.
Given GOJ’s funding constraints, namely under the current IMF Loan Programme, the SEZ Policy encourages the private sector to play an active role in the Jamaican Special Economic Zones. The Policy envisages public private partnerships (PPP), joint ventures (JV) and private zone development in the development and operation of SEZs. This offers the potential for a number of different models. However, developing SEZ under PPP and or JV model has several commercial complexities as both the public and private sector need to bear some roles and obligations.
Greater involvement of the private sector in the development of zones reduces the burden placed on public resources and increases the efficiency of zones by allowing them to operate under market mechanisms. International experience reveals that a significant number of governments developed and managed zones have been less effective than their private counterparts. In order to facilitate private development of zones, an appropriate legal, regulatory and institutional framework should be in place. The Government’s main role would be to regulate economic zone activities, promote the zone regime, and aggressively identify, assemble, and make available land suitable for development through PPPs or JVs or private development.
Purpose of the session
Panelists will discuss the mechanisms to encourage and facilitate SEZ development in Jamaica (PPP, JV or private). The viability of any SEZ due to the highly capital intensive nature of their development, is dependent on finding adequate and appropriate types of financing to support a deal structure; panelists will discuss structuring and financing deals in PPP, JV or private infrastructure development.
China’s Special Economic Zone experience… seven things Jamaica has learnt
“If we are to seize opportunities to promote China’s all-round development, it is critical to expand the economy.” – Deng Xiaoping
China’s economic development over the past 35 years is nothing short of remarkable. Its journey to becoming ‘the factory of the world’ holds several important lessons in industrial development, attracting foreign direct investment and economic diversification. Although China’s journey is a complex one filled with a variety of policy prescriptions, one policy tool stands above the rest – special economic zones. The strategic and focused use of special economic zones (SEZs) as a development tool holds a special – pun intended – place in China’s story. And as Jamaica embarks on its own journey using its modernized SEZ framework, China’s journey holds valuable insights into the remarkable transformational power of SEZs.
What makes special economic zones special?
There are various definitions of SEZs, however, in the simplest of terms they are “geographically designated trade areas that are used to attract foreign investors and boost industrialisation. They generally have trade laws that differ from the rest of the country and companies are offered tax incentives to set up operations.” (What can Africa learn from China’s special economic zones? By Yejoo Kim, World Economic Forum).
SEZs come in a variety of forms, names and functions – Free Trade Zones, Free Zones, Export Processing Zones, Enterprise Zones, etc. – that reflect a government’s priorities and positioning of its economy. However, what unifies them all is that they are development tools used by governments to attract, and facilitate investments that act as catalysts to diversify whole or targeted segments of their economies.
A journey of a thousand miles begins with a single step
For China its SEZ journey began in the late 1970s/early 1980s as part of Deng Xiaoping’s economic reform and opening up of China to the world. The first SEZs were set up along China’s southern coastal areas in 1980, and most famously in Shenzhen. SEZ became China’s windows to the world. The SEZs, especially Shenzhen were an immediate success attracting by 1981 over half of China’s total foreign direct investment (FDI). The success story of China’s SEZ continues today and will for the foreseeable future.
Jamaica has set itself an ambitious goal and programme through its national development plan to “make Jamaica the place of choice to live, work, raise families and do business.” A critical element of Vision 2030 is transforming Jamaica into a global logistics hub which includes bringing together Jamaica’s geographic and other advantages with land, sea, air and technological infrastructure to support Jamaica’s modern industrial development. The ultimate aim of the global logistics hub is to increase the length, width and depth of Jamaica’s participation in global supply and value chains.
This increased participation or value addition may come in a variety of forms that would see Jamaica and her people expanding their skills and expertise in research and development, design, production, logistics, marketing or services, etc. in a range of industries. For Jamaica, much like China, special economic zones, are a ‘special’ vehicle to increase its participation in the global economy.
It is certainly true that Jamaica can learn many important lessons from China and other countries in the use of SEZs as a tool for economic development, however, to my mind here are seven of the most important:
- Special Economic Zones are not a panacea: SEZs while important are not an economic magic bullet and are not a cure all for a country’s entire economic woes. They do not stand by themselves but form part of a larger economic reform programme, for China that was Deng Xiaoping’s opening up of China to the world and for Jamaica it is Vision 2030 and the global logistics hub.
- On and off-site infrastructure integration: One of the most criterial factors that contribute to the success or failure of zones is availability and integration of adequate and appropriate infrastructure inside and outside of a zone. This infrastructure – land, sea, air or technology – must not only be fit for purpose but must be networked together to create value for stakeholders (workers, government, investors, etc.). Much like China, Jamaica, albeit on a smaller scale, has been developing and integrating its multimodal logistics infrastructure.
- ‘Soft’ infrastructure is as important as physical infrastructure: Having the right business environment is critical to attracting investors. The laws that the zones operate under, just like the physical infrastructure, have to be adequate and appropriate – fit for purpose. This is much more than just cutting red-tape but it’s about bureaucracies being facilitators and delivering government services as value additions. Investors must have confidence that it is easy to invest, their investment is safe and the operations of their investment will not be compromised by excessive red-tape. This, in part, is the very reason China and now Jamaica created the zones.
- Incubation for larger economic reforms: Reforming an economy is no easy task and one that cannot be done overnight no matter the size of the economy (Jamaica vs. China). However, SEZs offer policy makers an opportunity to experiment with a variety of reforms with limited risk to the wider economy. SEZs, in this regard act as incubators to test and refine reforms before rolling them out to the wider economy. The incubation of reforms gives policy makers policy room to create strong test cases done under as-close-to local conditions that increase the opportunity for success when rolled out in the wider economy.
- Efficient and effective administration: The efficient and effective administration of the SEZ regulatory environment is a self-evident, yet often understated success factor for SEZs. This goes beyond attracting and facilitating investments, as important as that is, into due diligence, long term assessment, planning and on-going monitoring of investors and their investments to ensure that they align to the country’s goals and policy priorities. In its Special Economic Zone Authority, Jamaica much like China has created a mechanism to do just that.
- Linkages: The phrase a rising tide lifts all boats defiantly describes the economic benefits of China’s SEZ development, however, this rising tide was not incidental and was planned for. One of the great development effects of SEZs are their spill-over effects into the rest of the economy. However, for these impacts to be meaningful and sustainable forward and backward linkages have to be forged by deliberate policy direction and actions. Jamaica’s SEZ policy and law recognize this fact and have created several mechanisms, particularly aimed at small businesses, to accomplish this.
- Developing a skilled labour pool: China realized early that it was not enough to have a cheap labour force but it had to have an educated one as well. What is more, China also recognized that in developing in its skilled labour pool, it was important that it match its skills training with the needs of current and future industries. In fact, over time China’s skills training development became an integral part of its investor targeting, innovation and over-all economic growth strategies. For Jamaica education and training are critical components of Vision 2030 and the global logistics hub.
A business component roadmap to Jamaica’s logistics centered economy
How is the Hub being implemented? What are the timelines? What is the economic value proposition? How is Jamaica positioned relative to other major hubs? What’s the difference between a transshipment hub and a logistics hub? What is the role of emerging markets such as China? What type of industries will be attracted to the hub? What strategy will be used to attract the leading global companies in the field of logistics? How will the hub be financed? What are the opportunities for local businesses? Answers to these and other questions will lead to a better understanding of the transformational nature of the initiative.
The document below is a bit dated however it still provides a comprehensive overview of Jamaica’s global logistics hub thrust.lhi-business-component-roadmap
The air transport sector globally is a significant employer
Special Economic Zones: a tool for economic development
Jamaica’s Logistics Hub: reshaping ourselves to reshape global trade, Part I
Jamaica’s progress towards being a Global Logistics Hub might appear to be slow, especially when compared to what Panama appears to be doing but Jamaica’s progress is real and it is meaningful. Three point need to be emphasized here:
- What Jamaica is developing and what Panama is developing are different.
- Jamaica’s Logistics hub is not solely dependent on the expanded Canal.
- Jamaica and Panama are not starting from the same position.
What Jamaica is developing, yes developing, because we have move well past mere plans, and what Panama is developing while connected, are different. The Panama Canal serves as a very important transit point and not a Hub in the sense that we are talking about in Jamaica.
With the current Canal expansion exercise taking place in Panama there has been a strong emphasis on the Maritime component of the Logistics Hub Initiative. This is understandable since 90% of all goods are carried by ships and the Canal currently handles over 5% of global trade. However, this emphasis has unfortunately been to the detriment, well as far as public focus is concerned, to the other elements of the Initiative such as the role of creating an enabling business environment and its importance for attracting investments, economic growth, growing our exports, increasing social and economic inclusion and job creation. Jamaica’s Hub it cannot be overemphasized, is about much more than just ports; our hub also has the following components: Aviation, ICT/Data, Financial Services, Production/Manufacturing (within and outside of Special Economic Zones), and Internal logistics (road, rail, fiber optics, etc.).
Creating an enabling business environment is a must if our people – entrepreneurs, students or job seekers – are to chart and travel the road to prosperity. If we don’t get our house in order and provide an enabling business environment all the infrastructure in the world will not matter as we will not be able to function in an efficient manner which is what companies are looking for to enhance their global value chains. This why you have the Shipping Association of Jamaica (SAJ) and veteran businessmen, like Charles ‘Charlie’ Johnston calling for trade facilitation reforms to the Customs Act that is currently before a Joint Select Committee of Parliament. Two such reforms, for example, are including the definition of transshipment in the Act and expanding it to include cargo coming from one port and leaving from another rather than how its currently defined in Regulation as cargo coming in from a port and leaving from the same port. The second reform is allowing for vanning/devanning of containers.
The first reform would allow for greater movement of cargo from port to port resulting in greater opportunities for the trucking sector for example but more importantly it is a needed reform to expand the benefits of our cruise shipping industry. This is especially true as we move into homeporting. Jamaica has a great opportunity in the cruise shipping industry, which is already being exploited but could be greatly expanded especially with homeporting. Some of these opportunities are in supplying the cruise shipping lines with such things as spare parts, food and lube oil. This activity – chandlery – is one that creates great opportunity for entrepreneurs, especially small businesses, and job seekers in both logistics itself and manufacturing.
The vanning/devanning of containers, is the process of stuffing and unsnuffing of a shipping container. It is a value added and cost savings logistics activity that takes place on or near the port that enhances transshipment. Jamaica already serves as a transshipment hub in the region; however, to move to a Logistics Hub, namely on the scale stated by Minister Hylton (Ministry of Industry, Investment and Commerce), “as a global asset and the fourth node in the global trading system along with Singapore, Dubai and Rotterdam,” vanning/devanning is a basic activity in achieving our vision. Large retailers such as Walmart and Macy’s, which source goods from all over the world, find vanning/devanning an invaluable cost savings logistics exercise. Companies like these regularly pack, unpack, rearrange and consolidate cargo from different containers to maximize container use and space. For example, clothes that come from Vietnam in two containers and shoes that come from China in one container can be sent to Jamaica where the containers can be rearranged to have a mix of clothes and shoes for the Miami and New York markets. By vanning/devanning in Jamaica, one container can be eliminated saving transportation cost to Miami and New York. Vanning/devanning, it must be emphasized, is a low hanging fruit that can utilize our port infrastructure, as is, and due to its labour intensive nature creates great job opportunities.
Let me be clear about the effects of this reform. Vanning/devanning will not suddenly become an exclusive activity only carried out in Jamaica. No! Such activities are currently being carried out in Panama and other parts of the region and this will continue to be the case. However, what the reform offers Jamaica is an opportunity to use its existing port infrastructure, as is, to offer a much needed service. What Jamaica can offer the market, among other things, is a centralized location in the Caribbean that is closer to the US Eastern seaborne markets relative to that of Panama.
These reforms, along with others, are enabling the further build out of a logistics centered economy. What the SAJ, Mr. Johnston and many others know, among other things, is that with our current port infrastructure Jamaica has great scale and scope for expanding its throughput by simply fixing our inefficiencies. Put another way, by improving the business environment, in this case on the port, we can increase economic activity, grow our exports and jobs with our ports, as is. Now just imagine when we also expanded the ports and other connected infrastructure, like the Special Economic Zones, what would be possible?
Opportunities for Micro, Small and Medium Enterprises (MSMEs) in a logistics centered economy
Opportunities for Micro, Small and Medium Enterprises (MSMEs) in a logistics centered economy
The logistics centered economy is a complex concept. However, it is essentially about creating sustainable economic growth by removing the obstacles to economic development. This is being achieved through policies directed at creating a business friendly environment, increasing our connectivity through the use of technology and increased transportation links. In fact it is through this process of reform, which includes businesses finding new and innovative ways to create value that the opportunities lay for Micro, Small and Medium Enterprises (MSME). The MSME sector has been the primary target of many of these reforms not just because they form the majority of businesses in Jamaica, but mainly because as the Minister of Industry, Investment and Commerce, Anthony Hylton has consistently said:
when you solve the fundamental problems facing the MSME sector you invariably improve the overall economy.
The Logistics centered economy is not simply an internal response to Jamaica’s economic challenges; it is also an opportunity to respond to those challenges by taking advantage of trends in the global economy. These trends have seen manufacturing becoming more global, specialized, fragmented and services dependent. This in turn has resulted in certain sectors critical to trade, including logistics, shipping, aviation, finance, and information communication technology being concentrated in strategic locations – logistics hubs.
So what are the opportunities for the MSMEs?
Opportunities abound for the MSMEs in a logistics centered economy, moreover, many of these opportunities do not lie in the distant future but are here and now. The issue however is, how best to illustrate these opportunities. The telling of stories is a good medium.
The Mobile Business Clinic has criss-crossed the island providing a platform for many fruitful and insightful exchanges at a grassroots level about the logistics centered economy. One of our all-time favorite came in Savannah-la-mar, where we met a restaurant owner who had come to the Clinic to take advantage of the business advisory services being offered by the Jamaica Business Development Corporation (JBDC).
This lady was excited to learn that her restaurant, even though not an export oriented business, was very much a part of the logistics centered economy. Her business had in fact benefited from the ease of doing business resulting from the Companies Office of Jamaica’s (COJ) ‘Super Form’ which consolidated the many forms needed to register her business into one and reduced the time, and money needed to interact with various government agencies to just one, the COJ. More importantly, she was excited to learn of a possible new way of expanding her business by revisiting the idea of deliveries which she had earlier tried but later discontinued. She embraced the idea that she could further expand her growing and lucrative made to order – in logistics speak, fulfilment – part of her business by using the existing transport infrastructure she had running right outside her restaurant. Rather than invest a lot of time and money in setting up and operating a delivery system she could use her cell phone and the connections she had with the taxi drivers to work out a delivery system.The second story is about a farmer who lives in Linstead and decided to tap into the lucrative, US $400 million ornamental fish export market. This farmer in his operation may benefit from the North/South highway increasing the speed and durability of his fish to get to the airport for export. He would have also benefited from the removal of export licenses by the Trade Board on ornamental fish and the expanded market access from the air service agreements with countries like Singapore and Turkey.
The final story is about Kington Wharves (KWL) and their US$100 million investment to upgrade and expand their port facilities and to build its Total Logistics Center (TLC). KWL provides the clearest example to date of how MSMEs will benefit from the establishment of Special Economic Zones (SEZ). While KWL has targeted large global companies for its TLC it has incorporated Jamaican MSMEs in its plans by creating backward linkages to the local economy. One example of this is the creation of a specialized area for the food vendors who operated just outside of the gates of the various properties it bought and consolidated for its investment and who would otherwise have lost their livelihoods. What KWL has done in its transition from Free Zone to SEZ is to create the first SEZ ‘goods and services providers’ as outlined in the draft SEZ policy. Moreover, these and other goods and services providers will further benefit from the removal of the GCT disincentive that was charged on their goods and services making them even more competitive to imports.
These examples illustrate, among other things, that the logistics centered economy while based on logistics, isn’t only about logistics. In fact it would be more accurate to say that what we are truly talking about is a logistics, value added, production, warehousing, and distribution economy. But I am sure you would all agree that doesn’t roll of the tongue as well as logistics centered economy. What they also show is that opportunities are here and now; and ready to be seized.