Ian Boyne | Holness’ holistic approach to growth
Andrew Holness' adoption last week of a tripartite framework to monitoring the new standby agreement (SBA) with the International Monetary Fund (IMF) demonstrates his holistic, integrated and broad approach to economic development.
The standard neo-liberal prescriptions focus on macroeconomic and fiscal targets, relegating other matters to secondary, even tertiary, importance. Progressives have always maintained that macroeconomic targets are threatened when growth is not inclusive and development-oriented. Traditional capitalist development has typically delivered the goods in terms of GDP growth and high investment, but has generally not translated into equitable, broad-based development.
This lopsided view of growth has produced increasingly alienated, disaffected and disillusioned citizens who have been left behind by the growth train. Andrew Holness has demonstrated a keen appreciation of the fact that his achieving the much-touted "5-in-4" growth plan is one thing, but ensuring that the Jamaican people benefit adequately from that growth is something else. His pulling together three groups to monitor the economic programme displays a commendable grasp of the nuances of economic development.
Thankfully, he is not infected with the myopia that results from the virus of neo-liberalism. He made some noteworthy statements last Monday in announcing that he was not only reconstituting the Economic Programme Oversight Committee (EPOC), but also establishing P-STOC the Public Sector Oversight Committee; and pulling in the Economic Growth Council (EGC) in completing the triad to monitor our performance under the new IMF programme.
A release from the Office of the Prime Minister said: "EPOC ended up focusing on fiscal, monetary and quantitative matters" a clear criticism of EPOC's oversight (pun intended) of some important matters with which it could have concerned itself.
Outgoing Chairman Richard Byles did an excellent job in telling us about the quantitative targets and how they were being met, and he would often lament that they were not resulting in the desired growth, but there was an absence of attention to broader developmental indicators.
I suspect that he understood his remit to have been centred around those areas he did focus on, and then Minister of Finance Peter Phillips did not seek to suggest he should do more. Holness is now saying, not too subtly, that that approach was inadequate. Byles cannot be blamed, and Holness did not seek to do so, but instead commended him for his boldness and forthrightness, and rightly so.
But as I have often written, Phillips was too uncritical of neo-liberal perspectives, having backslidden far from his socialist ways. This Holness administration is making the People's National Party look right-wing, and Holness is certainly staking out his position, in quite non-ideological terms, as a pragmatist with a progressive bent. Ironically, PNP people are now chiding him as a "populist", but his inclusive approach to economic policy and management will prove more conducive to growth and social development than taking the more narrow approach of just obsessing over macroeconomic targets.
Holness said on Monday:
"We wish to design the monitoring framework to address the challenges ahead. Not only must we maintain fiscal responsibility, but we must transform the public sector, grow the economy, and protect the vulnerable. There is, therefore, the desire to deepen, broaden and diversify the monitoring framework." Yes, EPOC was excellent in ensuring that those crucial macroeconomic targets were met. Government was kept on its toes. The State's tendency to pander to populist adventures and to veer off course was tempered by the existence of EPOC.
That was fine. But Holness is right: Something broader was, and is, needed.
Holness has snatched the PNP agenda without attaching any labels to himself; but clearly tapping into the people's sense that while the macroeconomic targets were going in the right direction under the PNP, that was not being felt in their lives. Holness is determined to pass not just the IMF test, but the people's test.
He has now put together a framework that allows him to monitor that. It sends an important signal in policymaking. Also, Holness pulled off a master stroke by appointing two well-known Comrades with impeccable PNP credentials as EPOC, and P-STOC heads firebrand PNP stalwart D.K. Duncan's son, Keith, and National Workers' Union bigwig Danny Roberts - two highly competent and thoughtful men.
Keith will do a fine job at EPOC, and Danny Roberts is the sharpest, most informed, avant-garde union leader around, who is a sharp critic of neo-liberalism. Danny is his own man and will defend the interest of the working class in a non-partisan, enlightened way. The Prime Minister should have gone further, though, in creating a mechanism much broader than a Public Sector Transformation Oversight Committee. He has talked about protecting the vulnerable, and one gets the impression that Danny is to do more than simply look out for public-sector workers' welfare.
But he should have established a more broad-based committee with people from the social sector, the NGO community, and the academy who would assess how the IMF programme and EGC's work are impacting poor people and affecting social development. The social indicators need to be monitored, too.
Now the Prime Minister could well say, as he implied, that the trade union representation on EPOC should quite properly look at the social issues. Indeed, it has been a failing that there has been no explicit employment targeting. I see the IMF urging us to adopt inflation targeting, in its November 11 report on Jamaica. That's standard neo-liberal fare. But what about employment
targeting? What about monitoring job creation and unemployment reduction and putting that on par with inflation targeting?
Holness can more easily talk about "protecting the vulnerable", as the PNP did, because the IMF is now receptive to such talk.
The EGC people must get a copy of the book The Fix: How Nations Survive and Thrive in a World of Decline, which has just been published by Jonathan Tepperman, editor of Foreign Affairs, who studied at both Yale and Oxford. Read particularly the chapter, 'Manufacture your miracle', which tells of the dazzling economic growth of South Korea, which was poorer than Bolivia, Ghana and Iraq in 1961.
South Korea has grown faster and longer than any other country in the world. Between 1963 and today, it has grown seven per cent a year and contracted only twice during economic crises.
Says The Fix: "The second big surprising lesson of South Korea's success in avoiding the middle-income trap turns out to be that heavy state intervention can prove extremely helpful. To get ahead, South Korean firms needed access to capital, new equipment and raw materials, time to develop new technical and marketing enterprise ... . (President) Park provided his favoured companies with all these forms of aid."
Today, that's anathema to neo-liberal theology, but Jamaican firms are going to need far more help to achieve the '5-in-4' the EGC is talking about. Michael Lee-Chin and Nigel Clarke have to be prepared to think outside the neo-liberal box to get to that goal.