By Shari-Ann Palmer January 29, 2015
Agriculture, Labour and Social Security Minister, Derrick Kellier, has welcomed the introduction of the International Labour Organization’s (ILO) ‘Formalization of the Informal Economy Project’.
The one-year pilot project is aimed at building the capacity of informal businesses, while encouraging the growth and development of micro and small entrepreneurs.
Speaking at the project’s second workshop in Montego Bay, St. James, on January 26, Mr. Kellier said the project will go a far way in “helping operators to understand and appreciate managing a successful business.”
Pointing out that in 2002 a team of consultants from the Inter-American Development Bank (IDB) estimated that Jamaica’s informal economy accounted for 43.5 per cent of the Gross Domestic Product (GDP), the Labour Minister said this community must be encouraged to formalise their operations.
“In many instances, when the national economy is depressed, there are opportunities for job creation and employment in the informal sector, especially in small communities. We must, therefore, facilitate, encourage and support these small enterprises as they are critical to the economy,” he emphasised.
While these businesses contribute so much to the economy, they are unable to benefit from “interventions of the more formal economy,” such as loans from financial institutions, because they are unregistered, the Minister noted.
Mr. Kellier pointed out that the project is intended to change all that, as it will prepare them for engagement in the formal economy.
“This project is aimed at strengthening institutional capacities in local communities and building networks to enable participation in the formal economy,” the Minister said.
“This will result in the enhancement in the quality of jobs which, under the ILO’s Decent Work Programme, is a good indicator for local employment programmes,” he added.
The Minister also highlighted the role the project is playing in the Government’s Growth Agenda being pursued under the International Monetary Fund (IMF) Agreement in achieving economic development, while strengthening the Ministry of Labour and Social Security’s mandate for human capital development and the empowerment of vulnerable groups.The project is currently being piloted in two communities within the parish, Granville and Garlands. The first workshop, which was held in November 2014, saw participants being exposed to some elements of entrepreneurship, including formulating business ideas, operating and organising businesses, legal aspects of business as well as costing and financial planning.