Experts in the business sector agree that the ongoing road infrastructure improvement, which is currently under way in some sections of the country, will have a positive impact on the long-term economic growth and competitiveness of Jamaica.
The construction projects being undertaken are the US$19-million Constant Spring Road Improvement Project; US$64-million Mandela Highway Realignment and Reconstruction Project; as well as, the US$56-million Hagley Park Road Improvement Project.
There is also the impending US$384-million Southern Coastal Highway Improvement Project, which involves rehabilitation of the 110-kilometre roadway between Harbour View in Kingston and Port Antonio in Portland; in addition to the extension of the tolled East-West Highway, which will run from May Pen, Clarendon, to Williamsfield, Manchester.
Dennis Chung, chartered accountant and former CEO of the Private Sector Organisation of Jamaica (PSOJ), said the roadworks, overtime, are expected to facilitate seamless travel by the commuting public and will enhance connectivity to major markets and commercial centres, thereby boosting economic activity.
He noted that while investing billions in road infrastructure does not directly add to the country’s gross domestic product (GDP), it will, in the long term, generate growth through employment and other aspects of development.
“A lot of people believe that the spending of money on the road infrastructure adds a lot to GDP and it doesn’t, because a lot of the materials used during the construction are imported, and GDP is based on domestic production,” he said.
Chung noted that the initial benefits of investing in road infrastructure are seen in terms of the employment it provides for a large segment of the workforce.
“A significant part of our population are relatively unskilled; therefore, they’re suited for jobs in the construction industry, agriculture, and the tourism sector. The spending that’s taking place now is something that will drive income levels more than anything else,” he explained.
Chung said he expects that work will continue on the country’s infrastructure, as the fiscal deficit improves and there’s more money available for the Government to spend on infrastructure projects, as the debt-to-GDP ratio decreases.
“Therefore, for the roadworks to continue to contribute to economic growth, the Government will need to push other construction jobs.”
He further noted that when completed, the road infrastructure development will impact the country’s economic growth targets by improving productivity.
TRAFFIC WOES At present, traffic woes are a major concern for many commuters across the Kingston metropolitan transport region and parts of St Catherine.
Chung estimates that the traffic woes cost the country approximately $200 billion a year in lost production time.
He reasoned that, “When completed, the road improvements should actually improve the productive time in the country. Therefore, it’s going to lead to greater production capacity in the country. And, what it also will do, just like it did in countries such as the United States of America, is that it will allow people to live further away from work.”
With the National Works Agency (NWA) reporting that the Mandela Highway upgrade is more than 90 per cent complete, motorists are already experiencing a significant improvement in their travel time.
Some motorists have reported that travel time from the Caymanas area into Kingston has been reduced from about two to three hours in peak traffic, to about 30 to 45 minutes.
REAL ESTATE BOOST Carlton Earl Samuels, chief development financing officer at The Jamaica National Group (JN), said the ease of travel and improved accessibility for commuters is good news, not only in terms of productivity, but also for the real estate sector.
“What this means is that the improved road network will allow persons to consider living in areas they once thought were too far from Kingston, or the commercial district,” he said.
He noted that investors will now consider these areas attractive for housing developments, as more people are willing to live further outside of the Corporate Area and commute into Kingston.
“Therefore, more areas in St Catherine, and eventually St Thomas and Portland, will become more attractive to both housing developers and buyers.”
Samuels said this will not only drive housing development in these areas, but it might also slow down the rate of price increases for properties in Kingston.
The JN Group executive further noted that once a population begins to migrate to communities outside of Kingston, the migration will spur further development in terms of the construction of businesses and other commercial activities in those areas.
“Therefore, it now provides an opportunity for businesses which normally cluster in the Corporate Area, to move and expand some of their operations into rural areas,” he said.
Samuels noted that this will also drive greater tourism opportunities for parishes such as Portland and St Thomas, which means increased competitiveness and earning of foreign currency for the country and those communities.
Metry Seaga, president of the Jamaica Manufacturers’ and Exporters’ Association, concurs, noting that the current work to improve the country’s road network will also positively impact the business sector.
“It makes it a lot easier in terms of transportation costs and the movement of goods. Therefore, there is potential for greater price competitiveness, which will benefit consumers if this happens,” Seaga maintained.
