Editorial | Collaboration, consensus key to Jamaica’s political, economic success
As Jamaicans celebrate during the festive season, many will take time to reflect on what we have accomplished during the past year, while preparing for 2019. One important area to take some pride in is the stabilisation of the economy; with most of the key indicators showing positive gains. GDP growth, while not spectacular, has remained positive in the one per cent to two per cent range. Inflation has been in the 4 to 6 per cent range targeted by the Bank of Jamaica. Unemployment, at below nine per cent, is at record low levels. At approximately J$128 to US$1, the 12-month average for the nominal exchange rate has hardly changed, despite wild fluctuations during the year.
The major targets under the current standby arrangement with the International Monetary Fund have been met thus far by the Government, and there is a more confident feel about the prospects going forward. This achievement is partly a carry-over from the successful implementation of the previous Extended Fund Facility, led by former Finance Minister Dr Peter Phillips. A key reason for this national success has to do with the consensus that has been achieved between the major parties about broad economic policies and strategies for reform. Former Prime Minister P.J. Patterson, at the December 12, 2018 launch of his book My Political Journey, spoke about the need for consensus and collaboration if Jamaica is to make real progress. He reminded his audience of the success that the country achieved in reforming the then discredited electoral system, as a result of the genuine coming together of the two major parties to work in Jamaica's best interest. That lesson, as well as the current success around economic policies, should give real hope about what is possible in 2019 and beyond.
Lessons to learn
The two major parties came together in early 2018 to institute the state of emergency (SOE) and the zones of special operation (ZOSO) to fight Jamaica's runaway murder rate. The 21 per cent drop in murders for 2018, so far, has been largely attributed to these initiatives. The process of collaboration and consensus building must be managed and treated respectfully, or it falls apart easily. That is the lesson of the debacle we are now facing in the fight between Prime Minister Andrew Holness and Dr Phillips for public support for their respective positions on the issue of extending the SOE. Fighting crime and corruption monsters must involve a broad national consensus. It should not be a game of one-upmanship.
As Jamaica enters 2019, we may do so with some degree of optimism based on our recent successes on the macroeconomic front. We must, however, temper this with the clear reminder that we have not yet achieve the prosperity at the household level that the Government promised, and which most Jamaicans yearn to see.
The Andrew Holness administration appears to be adopting a more realistic approach to growth and prosperity. The optimistic '5 in 4' growth agenda has all but disappeared from public discussion. All the projections coming out of the Bank of Jamaica, the Planning Institute of Jamaica, as well and the multilateral financial institutions, indicate that GDP growth above two per cent in 2019 will be challenging.
The prime minister himself, at the Jamaica Labour Party Conference on November 18, told the country that "prosperity is not the absence of poverty, but the presence of hope that you can get out of poverty". Earlier, the country was told that prosperity was to be measured in monetary terms. This new philosophical spin on the promise of prosperity is likely to be coming from a realisation that rapid growth and prosperity is a long-term process that requires huge investment in fundamental reforms.
The Government has put a lot of store on the ongoing road infrastructure projects, particularly in the Kingston metropolitan region, to drive growth. Their long-term growth impact depends on the degree to which they boost private capital to invest, and they contribute to the improvement in productivity.
As Jamaica enters 2019, there will be a lot of unfinished business that we must tackle, including: the crime and corruption monsters, the need to complete the IMF Standby Agreement, and to rationalise and cut the cost of the public sector. The country has demonstrated that with skilful leadership and a willingness to collaborate and build consensus, even seemingly intractable problems can be solved. With this knowledge, Jamaicans can have a realistic hope that the country can make further advances during 2019 if reason and good sense prevails.