By: Ainsley Brown
A nation’s development and prosperity are increasingly joined to its connectedness to the rest of the world. The Global Logistics Hub Initiative has the goal of integrating and expanding Jamaica’s role in the global supply and value production system. The Initiative is the government’s response, in the form of a growth and development strategy, to the challenges and opportunities of globalization. A critical plank of this strategy is the nation’s air connectivity.
In today’s world of globalization it is not sufficient to simply have market access, the ability to turn that access into market presence is a necessity. Air connectivity or air logistics, is basically the ability of the nation to link with the rest of the world by way of airline services, and along with trade agreements are a critical link between market access and market presence. According to the World Bank “…logistics services has become critical for competitiveness. Better logistics performance is strongly associated with trade expansion, export diversification, ability to attract foreign direct investment and economic growth.”
Air connectivity is not a new concept to Jamaica as it is often discussed in relation to our tourism product and the expansion of our air lift capacity by way of increased tourist numbers. This would necessitate accommodating larger and larger aircraft from increasingly longer distances. The Global Logistics Hub Initiative represents an expansion and enhancement of this.
However, it goes much further to link the slower but cheaper maritime transportation of intermediate (semi-finished) goods to the more expensive but faster air transport. In order for Jamaica to reap the greatest benefit from this sea to air connectivity it cannot and will not exist in isolation. But be linked to local value added production, centered largely but not exclusively around special economic zones.
Air transport while occupying a smaller portion of the international freight space – some 0.5% of global trade tonnage – none the less has higher margins – about 34% of global trade tonnage value- and has greater value added than does shipping. What this translates to is greater opportunities for investment and jobs. Moreover, the aviation sector is set for expansion in Jamaica due to several factors. The government for its part has been perusing for several years a liberal or what is called an Open Skies Policy making it easier for Jamaica to connect to the world. The signing of an air service agreement with Singapore late last year was a great advancement in this policy.
Global factors are also shaping the expansion of this sector. There is a general expansion of aviation globally but regionally the FIFA World Cup this year and the Olympics in 2016 both to be hosted in Brazil are anticipated to drive up growth. Jamaica stands to benefit greatly from these trends in both increased air passenger and cargo flow by being an open and friendly destination.