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Robert Wynter: Real public-sector transformation needed to drive growth

Published:Sunday | August 23, 2015 | 8:00 AM
Prime Minister Portia Simpson Miller has much to do on the matter of public-sector transformation.

We appoint national coaches such as Jill McIntosh and Winfried Schäfer., respectively, to lead our netball and football teams to victory. While we can discuss and criticise individual decisions such as the starting team, game tactics and substitutions, we ought not to dwell on these decisions. Rather, we should hold our coaches accountable to their overall purpose of leading the respective teams to victory.

It is no different with our political leaders. While we may question and criticise individual decisions such as the PetroCaribe debt buy-back, we must remember that the Government was elected and authorised by us to take such decisions. Therefore, instead of dwelling on individual decisions, we should be holding the political directorate accountable to their greater purpose.

In response to the opposition leader's call for a growth czar, the prime minister stated that her Government was responsible to "bring growth and development to Jamaica". Unlike the minister of finance and the Economic Programme Oversight Committee (EPOC) members who have been preening themselves on the success of the International Monetary Fund (IMF) programme, Madam Prime Minister has been stateswoman-like and strategically head and shoulders above the rest by expressing concern and taking accountability for the country's inadequate growth and development. The prime minister has also indicated that she intends to hold each minister accountable for his or her respective contribution.

The administration is in its fourth year, and economic growth has been dismal. Expected improvements in employment, poverty, education, health, national security, youth development and water management have all been below expectations, despite the hard-working Cabinet members and public-sector employees. The challenge facing Government is how to translate hard work into acceptable levels of growth and development. The simple answer is to articulate and then flawlessly execute a growth and development strategy.

GROWTH STRATEGY

The growth and development strategy is simple. Government must create the right environment for the private sector to invest and export, as the potential for increased local consumption is limited. Like any organisation attempting to be customer-centric, such an environment must be right from the perspective of the private sector, not simply from the perspective of the Government.

With increased investment, output and export, the resultant growth will provide greater fiscal surpluses for the Government to retire debt and to fund infrastructure and social-protection programmes which, in turn, will reinforce the enabling environment. This no-brainer strategy has not changed over decades. Our problem has been poor execution, giving credence to Michael Lee-Chin's dictum that success is one per cent strategy and 99 per cent execution.

Instead, EPOC Co-chair Richard Byles has suggested that the Government uses its surplus from the PetroCaribe buy-back bond issue to invest in growth projects with matching funds from the private sector (an amorphous group). Instead of fixing the environment to create a demand-pull of private-sector investment, the EPOC chair wants the Government to induce a type of supply-push of its own funds in a non-enabling environment; with the 'private sector' being an aider and abettor in this supply-push. Thankfully, Private Sector Organisation of Jamaica (PSOJ) President William Mahfood has publicly rejected Mr Byles' 'growth strategy'.

The Government's own strategy may be found in the 71-page Growth Agenda Policy Paper, the foundations of which are elaborated in the 291-page Growth Inducement Strategy (GIS). According to the policy paper, "The strategy provides a framework to mobilise potentially productive assets and unleash entrepreneurial dynamism to generate inclusive and sustainable growth, and has the following components: fiscal consolidation, business environment competitive reforms; strategic investment projects; human capital development and protection; human and community security; and environmental resilience."

Although admitting that despite significant achievements in the GIS implementation, the performance of the economy has remained subdued and the country's trade performance has been weak; the Government has remained upbeat, stating that the scope and depth of the Growth Agenda, if implemented successfully, will lead to a more competitive socio-economic environment that will change the business as usual growth dynamics and enable more robust and sustainable growth. I am convinced that the Government and the EPOC are really clutching at straws in articulating and executing strategies to support the prime minister in "bringing growth and development to Jamaica".

Tinkering vs Transformation

The environment for growth and development is created by the synergy, effectiveness and efficiency of every single ministry, department and agency (MDA) of government. It must be now clear that the underperformance of the public sector is the main reason for our inadequate growth and development. This is precisely what motivated the prime minister to be concerned and to take accountability as stated above.

Improving public-sector performance can be achieved through continuous improvement using a tactical approach OR by fundamentally transforming the sector using a strategic approach. Our failure to effectively transform the public sector, despite expending significant resources over a long period, has been and continues to be the fundamental reason for the continued anaemic growth and development.

Instead, our transformation and reform efforts have been and continue to be tactical and MDA-focused rather than being strategic and public sector-wide focused, explaining, in large part, the primary surplus success/economic growth failure paradox.

Public-sector transformation efforts have failed because:

1. Transformation does not require significant resources; rather, it requires political will and fixity of purpose. Limited resources IS A REASON for transforming, NOT AN EXCUSE for not transforming.

2. Failure to be purpose-driven; not clarifying the strategic context within which transformation must take place.

3. Failure to identify the starting and end points: transforming from 'what' to 'what'.

4. Failure to set purpose purpose-driven performance targets to measure and monitor the impact of the transformation.

5. Failure to separate quantum-leap transformation initiatives from normal continuous improvement activities.

6. The practice of using career civil servants who have been schooled and steeped in the status quo modality to drive transformation.

Moving Forward

I suggest that the prime minister revamp the Public Sector Transformation Unit (PSTMU) to focus on systemwide initiatives while allowing the respective permanent secretaries to deal with individual MDA improvement projects. The following sectorwide initiatives should be considered:

1. Revamp and realign government income and expenditure (aka fiscal consolidation as per IMF agreement). This is in progress and must continue.

2. Revamp and realign Government's financial resource management to strategy. This will require an overhaul of the current budget process.

3. Revamp and realign MDA strategy and accountability to government strategy. This will require an overhaul of the existing corporate planning system.

4. Revamp and realign Government's organisational structure to strategy (aka public-sector rationalisation). Very little has been accomplished, despite the commendable work by the Patricia McCalla-led unit.

5. Revamp and realign Government's human resources to strategy. I no longer believe the public sector is oversized; however, I do believe it is highly unbalanced.

6. Revamp and realign the design, execution and accountability of externally funded projects to strategy. Failure to extract adequate value from these loans and grants has been a major contributor to national debt.

These initiatives require minimal expenditure and must be driven by political will. Based on her own admission, I believe Mrs Simpson Miller is the only leader today with the political capital and the political will to drive the necessary changes. I trust she will get support from within her own administration and from other well-thinking Jamaicans.

- Robert Wynter is managing director of Strategic Alignment Limited. Email feedback to columns@gleanerjm.com and rob.wyn@hotmail.com.