By Curtis Martin, managing director, JN Bank
Article highlights:
- Jamaicans lose significant productive hours waiting in line to access services
- Low production restricts the number of goods produced, adversely impacts international competitiveness and the inflation differential between Jamaica and its trading partners, and ultimately the exchange rate
- The Jamaican dollar has depreciated approximately 76 per cent against the US dollar over the past 10 years, and more than 200 per cent over 20 years. Currency depreciation may increase the price of goods, as merchants pass on the costs associated with the increase in the exchange rate
- Jamaica needs continued improvement to infrastructure to widen access to reliable internet and enable greater opportunities for efficiencies that will save productive time
About a year ago I paid a routine visit to one of our JN Bank branches in eastern Jamaica. While there, I stumbled upon an intervention by three senior JN Bank leaders, who were graciously trying to convince a JN member, who insisted on carrying out a transaction at the teller, to use one of our Smart ATMs inside our JN Xpress area. They tried to tell her that the ATM was a much faster and convenient way of completing her transaction. It didn’t seem to matter to her that there were only a few people in the Xpress area, and that the ATMs were not being used by other persons at the moment, compared to the 15 or more people waiting in line to conduct their transactions at the teller.
Thankfully, she was eventually persuaded and she proceeded to use the Smart ATM with little assistance from our branch representatives. In no time, she was out the door and on her way, I assumed, to work.
Factoring the time it took her to travel to the branch and the time she spent waiting in line up to that point, my own estimation is that she could have lost at least one or two hours of an eight-hour working day, and she could have wasted more time if she had continued to wait in line to do her transaction, which could have been done in less than five minutes at an ATM or even online.
Time is literally money
I’ve shared this story to highlight the connection that many of us do not make readily on a daily basis between managing our time and the prices we pay for goods and services. Consider the productive time gained from not having to join a line during working hours to get banking transactions done. Online banking removes the need to visit a physical location to do a transaction, or choosing to do the transaction at a Smart ATM means less time is spent waiting on someone to do the transaction for you. Similarly, time can be gained from paying taxes, fees or fines online instead of waiting for hours at the tax office; or from sending a photo and message via WhatsApp to your local hardware or pharmacy to confirm that they have the item you need instead of going there only to realise they don’t have exactly what you require.
For many Jamaicans who conduct business transactions in the traditional way by visiting a location or waiting in line, it requires using a significant number of productive hours and other resources. First, it starts with taking public transportation or driving to the location, in the process burning imported fuel, which adds to the country’s import bill and degrades the environment. Further, it takes time to travel to the location and then more time is spent waiting in line, sometimes for up to three hours, to transact business, and then travel to the next destination.
Compare this to someone living in North America who may spend a few minutes to do the same business transactions using an online platform from the comfort of wherever they are. There is no time lost during travel, or time spent waiting in line, which saves both the customer and the business precious hours that can be invested in producing or innovating to yield more goods and services, and, at the same time, reducing the need for imports.
The relationship between the availability of goods and services and the level of money supply is often cited as a major determinant of inflation, which impacts the relative value (the exchange rate) of a country’s currency. Simply put, if there is not enough production taking place, there will only be a few goods available on which one can spend, which undermines the value of the dollar, as the supply of money will be greater than the number of goods available. Therefore, when productivity is low, the local currency is likely to be weak.
The Jamaican dollar has depreciated approximately 76 per cent against the US dollar over the past 10 years (from J$87.28: US$1.00 in March 2012, versus approximately J$153.00: US$1 in 2022), and more than 200 per cent over the past 20 years (from J$48.51: US$1.00 in January 2002). The depreciation in currency may increase the price of goods and services Jamaicans pay, as merchants will often pass on the increased costs incurred due to the deterioration in the exchange rate.
While the current wave of external shocks, precipitated by the COVID-19 pandemic over the past two years, and now the Russia-Ukraine war, have increased commodity prices- especially food and oil- exponentially, the current situation should impress on us the need to urgently improve our productivity. It is our productivity and innovation that will help to cushion the blow of external shocks such as these; shield us from the impact of higher prices, and protect the value of the Jamaican dollar, as it will reduce our need to import some basic goods and services.
Adopting and adapting to more efficient ways of doing business is, therefore, critical not only for businesses alone, but for every citizen of a country if the entire nation is to grow sustainably and achieve resilience. In other words, production requires participation, not just by some, but by all.
Reliable internet, stronger policies needed
However, even as we look to digitalisation to create more opportunities to increase productivity and innovation, the infrastructural limits cannot be overlooked, and must be resolved. Simply, if there is no internet or unreliable services, then people cannot be expected to do business as efficiently as their counterparts in the US, Canada or any other country where access is prioritised.
The COVID-19 pandemic of the past two years has been a touchstone for the quality of internet services provided locally. The divide that it has shown up, even within the Corporate Area, but especially outside of what is known as the Kingston Metropolitan Region (Kingston, St Andrew, Portmore and Spanish Town) has been evident and deleterious, as students lost hundreds of teaching and learning hours because of the unavailability or undependability of broadband services in rural parts of Jamaica.
The point I’m making is not a new one, and quite intuitively, was a point made by Dr Ransford Davidson, who manages our JN Bank operations in Browns Town and St Ann’s Bay, a mere two weeks before the declaration of the COVID-19 pandemic, and the subsequent discovery of Jamaica’s first case. While addressing the All-island Chamber of Commerce Luncheon in February 2020 in St Mary, he argued that our rural areas need reliable broadband services to enable businesses and citizens to actualise their potential. More than others, citizens in our rural areas are likely to spend more time travelling to access basic services, because of distance, road conditions and unreliable public transportation, hence they lose more productive time. Therefore, their access to internet services cannot continue to rely solely on the decisions made only by private players. Instead, policy has to be implemented to drive equity in access to services.
The effort to introduce community access points through the Universal Service Fund is admirable, but the digitalisation revolution is moving much faster and, therefore, requires much more impactful actions on the part of the state. Combined with a thrust to improve digital literacy, we must all treat this aspect of development without delay, because our next 60 years and more as a nation depend on it.