Government needs to refocus
determine the fate of the economic programme they are seeking to implement. And the people will need to perceive real signs of economic gain to see it through.
In light of this, Government has to move quickly to ensure that its economic management, while observing fiscal tidiness, results in increased economic output before long. They must also be aware that output will only increase when our production becomes competitive; and this will only happen when more Jamaicans are employed and our labour productivity is consistent with those with whom we must trade.
It is trade that will enable our economy to grow. Without dramatic improvement in our export performance, the economy will not grow in any meaningful way. But exports have continued their devastating decline under the IMF programme. Rapidly reversing this trend is essential if Jamaica is to have any hope of economic recovery. For even if the Jamaican market were supplied entirely with local production (if that were even possible), it could not provide the dynamic demand needed for sustainable economic growth.
No effort should be spared to increase Jamaica’s exports. The enormous potential of non-traditional export opportunities like business process outsourcing, as outlined by this year’s PSOJ Hall of Fame inductee, Glen Christian, should not be allowed to go to waste.
Government, even at this late stage, must convince the IMF to revise its programme to accommodate these efforts at economic growth.
Recognising that the necessary increases in employment and productivity depend on capital investment, it should be prepared to lengthen the country’s debt repayment schedule in order to allow Government to use a portion of the 7.5% of GDP primary surplus (perhaps 2.5%) to provide incentives for new private-sector investments in production and productivity. The Fund should be prepared to permit Government to change the tax code to attract as much corporate and personal wealth as possible to invest in production and productivity-enhancing activities as distinct from granting incentives merely for paying taxes on time.
Should the expected investments from these stimuli materialise, the tax revenues that would flow from the increased economic output would dwarf the cost.
Government’s focus should shift to employing and maximising the productive capacity of the people. That is why it is so important for the Ministry of Labour to go beyond dispute resolution and focus on employment creation and to establish an effective interface with the investment promotion agency, JAMPRO.
JAMPRO itself needs to be further empowered to engage with our educational institutions to influence their course offerings and to benefit from their advice in packaging projects and targeting investments. JAMPRO also needs to have trans-ministerial effectiveness, which is only possible if it bears the authority of the prime minister. No agency of government is in greater need and could make better use of prime ministerial authority than that which shoulders the responsibility of attracting development capital to the country.
The penchant of recent prime ministers to hold the NHT close while leaving JAMPRO to a line minister can only be explained by political, not economic, logic. And while politicians can be expected to be political, there is a point at which leadership requires that the national good supersede political manoeuvrings.
Most important, the prime minister cannot delegate economic development to her ministers. While ministers have their individual roles, only a head of government can provide the leadership and coordination needed for overall success. In Jamaica’s case, the prime minister must begin by taking charge of the economic development and investment promotion agency, JAMPRO.
Although the task of economic development must be pursued on multiple fronts, the effort needs to have a unifying focus. Ours should be our people: investing in increasing their productive capacity and expanding markets for the output of their efforts.
n Claude Clarke is a businessman and former minister of industry. Email feedback to firstname.lastname@example.org.