Customs: The lynchpin for economic growth in the Caribbean

February 16, 2015


The sea unites the Caribbean as a region and ports are the first point of call for trade

  • Exports account for 30% of Jamaica’s GDP but delays cost the region dear in lost trade
  • Improving customs procedures will help boost economic growth in the region
  • The reforms aim to transform the country into a competitive destination for trade

For the average traveller, Customs is simply another form to be filled in when arriving in another country. But for a country like Jamaica, where exports of goods and services represent almost a third of GDP, Customs is much more than another part of travel bureaucracy.

Jamaica's Commissioner of Customs Major Richard Reese highlights the fact that his department must maintain a balance between revenue generation, trade facilitation and border protection.

Facilitating trade

In testament to the island's maritime past, Kingston boasts the seventh largest natural harbour in the world, but inefficient Customs, a lack of coordination and bottlenecks in port processes cost the Caribbean dearly.

"If [the cargo] gets delayed here, then there is a cascading effect on other ports. These ships hate to wait at an inefficient port where they do not know when they are going to sail out next. That cargo has got to go to somebody else," explains Master Mariner Ashok Pandey.

A recent World Bank study revealed that handling charges in the Caribbean can be two to three times higher than in similar ports in other regions. As a result, it can be significantly cheaper to ship a container to Hong Kong than a neighbouring country just 100 miles away.

Improving logistics in the country is therefore a priority for the Government of Jamaica, which aims to put Jamaica firmly back on the trade map with a new logistics hub in Kingston. However, no expansion project will improve performance without also tackling current inefficiencies.

At the same time, trading across the border as measured by Doing Business, which has become faster and easier over the past two years. Notably, Jamaica recently reduced the time to import by allowing Customs entries to be lodged at night.

Commissioner Reese boldly posits a Jamaica Customs Agency (JCA) objective is to "make Jamaica, as a destination, competitive"; whether it is by air, sea, passenger, or cargo.

In answer, the Government of Jamaica and the World Bank have approved a new project to strategically transform the public sector, improving efficiency, modernising processes and ultimately paving the way for private sector growth.

For the World Bank, JCA is one of the major agents in supporting the Government of Jamaica's economic growth programme. For us, the partnership with JCA is a critical and crucial one, considering its role as a trade facilitator, policy advisor and service provider.

" Our view is that an objective is to make Jamaica - as a destination - competitive. Whether it is by air, sea, passenger or cargo "

Major Richard Reese

Commissioner of the Jamaica Customs Department

The future is digital

While pirates don't now sail the seas of the Caribbean, the threat of drugs and firearms is still very real for the region. As the agency responsible for items entering and leaving the country, Jamaica Customs is on the frontline in the fight against contraband.

As Major Reese is quick to point out, it's an ongoing challenge balancing border protection and trade facilitation.

Digitising the permit and entry forms will expedite processing for the private sector and Customs alike, reducing losses on goods sitting waiting for approval. However, Major Reese was quick to stress that new efficiency measures must not jeopardise officials' capabilities to check for those items which may not be listed on the inventory.

"When the ship docks, the officers aren't there throughout the entire period," explained Major Reese. "That, in itself, already shows arrangements are currently supportive of cost-reduction to the carriers, but at the same time we have to be mindful of security," he clarified.

Harbouring a prodigious talent in its youth, Jamaica is working hard to position itself as the next global digital hub. The removal of duty from phablets is therefore a strategic choice by Customs officials, which has reduced the cost of these devices and opened up the digital spectrum to a wider cross section of Jamaicans. This is a move which is designed to improve access to key sectors such as ICT and education.

A regional view

Jamaica is not alone in facing Customs challenges.

The sea unites the Caribbean as a region and ports are often the first point of call for passengers and cargo alike, and yet logistical inefficiencies and poor port management mean that it can cost less to ship goods across the world than to another port within the sub-region.

The Caribbean is home to much potential for fostering economic growth; more efficient Customs procedures is just one step in the journey to making it a reality.