Rosalea Hamilton | Re-examining growth after Brexit
Jamaica and 192 other countries have agreed that inclusive, sustainable economic growth and 'inclusive partnerships', built on shared visions and goals at the global, regional, national and local levels, can be achieved as part of the Sustainable Development Goals (SDGs) by 2030. The fractured British and European partnership seems to contradict these goals.
After Brexit, Britain will have to re-examine how to achieve these growth objectives with a different vision of partnership than their European neighbours. Jamaica should also re-examine our growth strategies in the context of CARICOM and globalisation.
Modern globalisation has created new growth opportunities, especially in developing countries, but has also created worldwide instability, displacement, rising income inequality, and growing dissatisfaction with 'the system'. Free-market growth strategies, embodied in neo-liberal policies, have produced differential, uneven impacts across race, class, ethnicity, gender groups and geographical regions. Increasingly, those who have been negatively affected have become more vocal and visceral in expressing their disapproval of the system's perceived incapacity to deliver expected benefits.
The entry of Britain into the European Common Market, in 1973, and the subsequent deepening European Union integration in the 1990s produced mixed outcomes for the people of Britain. The emergence of the World Trade Organization (WTO) in 1995 created new challenges and opportunities as cheap labour and innovative firms, mainly from Asia and India, displaced uncompetitive firms in dying industries in the West, including Britain.
With borderless economies and declining economic sovereignty, many countries deepened regional arrangements as a buffer against intensification of global competition fostered by WTO global trade rules. The core objective is to gain access to larger markets on preferential terms that foster growth and economic well-being.
Unequal distribution of income
Over the years, the bruising impact of globalisation and successive global crises did not spare the British. The impact has been uneven. The uneducated working class in communities with uncompetitive manufacturing firms has been the worst affected, especially in the context of the UK's very unequal distribution of income. Britain is the third most unequal country in Europe. Not surprising, the Brexit results revealed a strong correlation between those who voted 'Leave' and those with working-class background and lower education and income. Strong nationalist fervour, fostered by the loss of British sovereignty and immigration/racial fears, also contributed to the 'independence' British stance.
So, what alternative growth strategies will Britain pursue to achieve the SDGs? Its main challenge is to define an appropriate restructured, regional arrangement for the free movement of goods, services and capital, with British immigration restrictions. 'Independent Britain' will still be part of a global market economy subject to renegotiated WTO trade rules that promote open markets and globalisation.
As we re-examine our own growth strategies that have yielded marginal growth and troubling social outcomes, we should rethink, rather than abandon, CARICOM, considering the following:
1. Restructured regional arrangements: As globalisation intensifies, Jamaica should work to restructure CARICOM to deliver greater benefits to member states and firms. Decisions about free movement of people and other contentious arrangements should directly involve the people of the region. It is time for a referendum that gives Jamaicans not only national choices, but also regional ones that clarify the terms of more beneficial regional arrangements, rather than a 'Jexit'.
2. Growth with participatory governance: Non-discriminatory, inclusive growth means that people should not be denied opportunities to participate in the growth process. We must recognise and accommodate differences. Growth with declining income inequality requires structural change, which necessitates support systems, especially education and participatory governance arrangements that enable more people to have a say in national as well as regional decisions.
3. Inclusive, sustainable growth: Concepts of 'inclusive', 'pro-poor' or 'shared' growth highlight the importance of not only growth outcomes but also whether and how people engage in, and benefit from, the growth process. Jamaica's growth outcomes include the highest level of income inequality in the Americas. This is unacceptable.
What is needed are deliberate, targeted policies and programmes that favours job-creating, globally competitive firms capable of penetrating regional and global markets, supported by social programmes that improve the quality of people's lives. This can be achieved with evidence-based policies that integrate not only macro but also micro determinants of growth. Recent, micro-level data collected through the Office of the Scotiabank Chair in Entrepreneurship and Development at the University of Technology, Jamaica, provide new insights that will be shared in forthcoming articles.
- Rosalea Hamilton, PhD, is Scotiabank chair, entrepreneurship and development, University of Technology, Jamaica. Email feedback to email@example.com, firstname.lastname@example.org, and email@example.com.