Editorial: Opportune time for investment council
Andrew Holness could hardly have done a better job in choosing people than those he has so far named - Michael Lee-Chin and Nigel Clarke - to sit on, and lead, the wise persons' group the administration expects to identify and drive initiatives to put Jamaica's economy on a path to robust growth. Nor has the economic environment been, for a long time, as prepared for a take-off of the kind that Mr Lee-Chin expects to inspire.
Mr Lee-Chin is a Jamaican-Canadian entrepreneur who made his first millions in Canada by acquiring a small mutual funds manager and parlaying it into the country's third-largest institution of the kind, before selling it to the largest for cash and equity. Along the way, when the Jamaican Government was selling bailed-out, distressed financial assets, he bought the National Commercial Bank, which is now, by assets, the island's largest financial company. He owns other businesses through his Portland Holdings.
That alone would make Mr Lee-Chin a worthy chairman of the Economic Growth Council (EGC). But he brings other important things to the job: charisma, unbounded optimism, and strong belief in the potential of Jamaica and Jamaicans. Moreover, those who work for him say that Mr Lee-Chin is extremely tolerant of debate, but holds people, including himself, to account for deliverables.
In that regard, we suspect that Mr Lee-Chin will be no less hard on himself, than anyone else, for the delivery of his pledge of a GDP growth rate of five per cent over the next four years, although there is need for greater clarity on that undertaking; whether Jamaica should expect the economy to be clipping along at a pace of five per cent a year from 2020, and, if so, how GDP expansion will be phased leading up to then.
Whatever the explanations or answers to these issues, in Dr Clarke, Mr Lee Chin will have a technically sound and intellectually gifted operator as chairman of the EGC's planning committee. Not only does Dr Clarke have experience in the management of business, but he demonstrated during an all-too-brief stint in the Senate an appreciation of policy nuance and an independent streak that enhanced the thoughtfulness of debates. We expect that Mr Holness will appoint other similarly talented people to the council.
But talent personnel, such as Mr Lee-Chin and Dr Clarke, won't, of themselves, deliver growth. Two other ingredients are important. One of them is substantially in place.
Over the past four years, Jamaica has undertaken a tough fiscal adjustment programme to control a Greek-style, unsustainable national debt, which is now on a downward trajectory. The Government's Budget is almost balanced. The current account deficit has been slashed. In other words, the country is close to achieving macroeconomic stability, or the kind of conditions to the liking of investors of the kind that Mr Lee-Chin, with his charisma and confidence, hopes to entice.
But he also knows that investor confidence can be easily undermined if the Government fails to entrench this nascent macroeconomic stability, or doesn't accelerate public-sector reform, including untangling red tape.
The other important element to the success of this project is the quality of technical support received by the EGC, without turf protection, or agencies tumbling over each other without doing much.