Sun | Aug 20, 2017

Editorial | The power of benchmarks

Published:Tuesday | November 22, 2016 | 11:00 AM

An apparently paradoxical, but significant, fact of Jamaica's new standby arrangement (SBA) with the International Monetary Fund (IMF) is its inclusion of a number of critical, though seemingly non-economic, reforms to which the Holness administration has committed itself.

An example of this is the undertaking to, within a year's time, table a law replacing the one that now governs the Jamaica Constabulary Force to support the transformation into "a modern, intelligence-led police service that ensures citizen security, with stronger systems of administration, management, and international discipline". At the same time, a law will be passed to establish the Major Organised Crime and Anti-Corruption Agency (MOCA) as an independent law-enforcement body, while the single anti-corruption agency should become a reality.

These, and several others, are not structural benchmarks, which is to say, they are not among the formal criteria for which failure to fulfil could lead to penalties under the programme. They are important, however, in two fundamental ways.

This, in part, is something that Jamaica has long known about itself: We are a society with high levels of cynicism and low levels of trust in public institutions, including government agencies. People don't believe that their government will do what it says, to go about its obligations with honesty. Based on the history of behaviour, people have good reason for this.

In this regard, there is a propensity for external oversight and foreign validation such as comes with the imprimatur of the International Monetary Fund. Which underlines our second observation. It is a reasonable inference that by specifically listing these non-benchmark criteria in this policy matrix, the Holness administration is offering a transparent declaration that they will be done within the specified time frame.

Such an undertaking has added import. As odd or perverse as it may seem at first glance, they have a central place in any dialogue on the national economy. Myriad studies have shown that Jamaica's high levels of crime annually deprive the country of up to seven percentage points of economic growth. Further, the perception of corruption is a disincentive to investment, job creation, and, ultimately, economic expansion.

 

MACROECONOMIC STABILITY

 

Indeed, the Government's Economic Growth Council (EGC), having declared the maintenance of macroeconomic stability a given, has made achieving citizen security and justice the most important component of its growth agency.

There is consensus that shifting this paradigm must include an overhaul of a constabulary that is widely regarded as corrupt and inefficient, not structured for the time in which it exists, but resistant to change. For the better part of two decades, it has entertained reform in fits and starts but without fundamental transformation. Two and a half years ago, when the former administration established MOCA as a semi-autonomous agency, we argued that it should have gone all the way at once. We presume they feared the potential political backlash.

Circumstances, perhaps, are more propitious now for police reform and for the merging of the anti-corruption agencies. Having them in an IMF agreement adds confidence that real change will happen - as has been the case with the macroeconomy. What people now need to see are the specifics of the proposed changes. That dialogue must start immediately.

 

Clarification

 

In Sunday's editorial, we indicated that in the 2010-11 fiscal year, the Government's wage bill was 23 per cent of GDP. It was, in fact, 10.7 per cent of GDP and projected to reach 10.5 per cent in 2013-14 and projected to hit 9.0 per cent in 2015-16. It, however, was estimated to be 9.6 per cent of GDP this fiscal year and fall to the 9.0 per cent target in 2018-19.