Public Affairs - Chaka-chaka government
Claude Clarke, Contributor
Most of us have been irked by the now-familiar practice of the National Housing Trust (NHT) funding politically popular programmes that cannot be financed by the Budget. But an even more dangerous practice is the NHT's use of its resources to finance adventures beyond the scope of its mandate. It is a practice that attracted little public displeasure until the purchase of Lennie Little-White's financially distressed and unsaleable attraction, Outameni, came to light.
What is most remarkable about the practice is that it has no more compelling rationale than Bill Clinton's response to the question of why he took advantage of his starstruck intern Monica Lewinsky. He did it because he could.
With an accumulated fund of almost $190 billion, including employee contributions, and awash with cash, the NHT has found itself with the capacity to indulge liberally in whatever catches its fancy: solely because it can.
These funds, garnered not through acumen but from the sweat and sacrifice of its contributors, have given it almost limitless capacity to spend.
In 2002, prompted by the Cabinet, it wished to develop a standalone park unconnected to any housing development. So it did. Ten years ago, it felt like speculating in a huge tourism development; and it dived in. And, of course, no doubt captivated by the historical and cultural appeal of Outameni, it acquired it. I do not challenge for one moment the desirability of any of these projects, but none of them was any of the Housing Trust's business.
In my Sunday Gleaner article 'Harmony, discord or economic dysfunction', published December 1, last year, I commented on the imprudence of the NHT's involvement in the ambitious proposal for the tourism mega project, Harmony Cove. Though conceived by its chairman, Kingsley Thomas, investing in it was outside the scope of the NHT's mandate and would not have contributed to the Fund's ability to fulfil its responsibilities. It is clearly administratively inefficient for one agency of government to perform the functions of another, simply because it has the cash to do so.
But in a sense, one can sympathise with the Trust. There are so many gaps in the Government's handling of its social and economic responsibilities that the temptation for a cash-rich agency to step into the vacuum must be considerable.
Take Emancipation Park. When the National Solid Waste Management Agency subsumed the Metropolitan Parks and Markets, it assumed responsibility only for sanitation, presumably leaving the responsibility for parks to the impoverished local governments. The NHT doubtless saw this as an area in which it could put its considerable resources to good use.
Emancipation Park is a desirable development. It is pleasant to look at and those who use it are grateful for it. However, it is not always prudent to do what is desirable. One's actions must be appropriate to one's circumstances. The depreciated cost of the Emancipation Park development, according to the NHT's 2013 audited financial statements, is $235 million. Today it carries an annual maintenance cost of $83 million: $12 million per acre for the seven-acre park.
By comparison, in 2011-12, the net cost of operating the nearly 5,000 acres comprising the eight Royal Parks of London was GBP 15.4 million, which, converted to Jamaican dollars, is J$560,000 per acre per year. So the cost per acre of maintaining Emancipation Park is 21 times that of the parks in a country with eight times Jamaica's per-capita wealth. Perhaps if the department charged with developing the country's parks were given the resources to do the job, the cost of maintaining them would be more consistent with the country's means.
The NHT has a specific mandate, which it has so far failed to fulfil. Thirty-five years after its establishment, its performance in providing housing solutions for its subscribers is woefully short of what is required. The fewer than 5,000, often low-standard housing solutions per year it provides can neither justify the revenue it extracts from the people nor satisfy the pace of housing creation needed.
Today, it accounts for only 12 per cent of the country's housing stock. By contrast, Singapore's Housing and Development Board, which is modelled along lines similar to the NHT, is responsible for 82 per cent of that country's residential units. Of course, the quality of the housing provided by the NHT for Jamaicans cannot be compared to the upscale, air-conditioned accommodations produced for the citizens of Singapore.
Reduce the wage deductions
In light of the disparity between the NHT's wealth and its delivery of housing solutions, perhaps it is time to reduce the wage deductions that fund it.
Permitting government agencies to act outside their area of responsibility, in a manner dictated by means and not mandate, undermines the discipline essential to good governance. This do-as-you-like, free-for-all style of governance leaves agencies and portfolios tripping over each other, often for personal or political aggrandisement.
This indiscipline permeates every level of government. The discipline requiring those answerable to the people to be aware of and accountable for the decisions and actions of the boards they appoint is gone, even for the most senior of ministers. The absence of discipline creates inefficiency, chaos and waste; and produces the kind of economic stagnation and social disorder we have today.
This administration is fond of declaring a desire to have 'joined-up government'. However, in the absence of a clear mission, what we will have is chaka-chaka government.
The clarity of the Government's mission and the managerial coordination needed can only be provided by the prime minister. Her first order of business must be to require all ministers, starting with her, to inform themselves about all major decisions taken by the boards they appoint and ensure they accord with the mission and policies of her administration. Because in the end, it is she who is accountable to the people of Jamaica.
Claude Clarke is a businessman and former minister of industry. Email feedback to email@example.com.