Thu | Oct 18, 2018

Peter Phillips | No free pass for failures

Published:Sunday | December 3, 2017 | 12:00 AM
Contributed Peter Phillips

This is a lightly edited address made by Opposition Leader Dr Peter Phillips to the Private Sector Organization of Jamaica on November 28.

In 2015, we were all of the view that the worst was behind us and that the programme of economic reform was progressing. All of our economic indicators were headed in the correct direction, and we had secured a reduction in the primary surplus in order to increase capital expenditure in growth, inducing projects in road infrastructure, agriculture, housing, climate-change adaptation and initiatives to boost competitiveness. That process would no doubt have continued had the People's National Party formed the Government in 2016 and beyond.

Since then, we have transitioned a new government and to a new programme. A new head has been elected to the PSOJ, we have a new International Monetary Fund (IMF) agreement, and a somewhat different policy framework. I note with satisfaction that the current Government has maintained the relationship with the IMF, and based on the Fund's reports, the programme continues to be satisfactorily implemented. In addition, the business and consumer confidence indices continue to be favourable, as are most of the economic metrics associated with the country's financial viability.

My intention is to focus on where we are and to suggest a way forward predicated on a different governance structure. It is important to recognise that the country, while making progress, continues to be in a fragile or tenuous position. Our critical social sectors in health and education are under-resourced. Our security forces continue to be stretched to the limit in the face of spiralling murder rates. The agricultural sector struggles with the effects of climate change and is in urgent need of modernisation.

Public-sector wage negotiations are long overdue, and while some companies are reporting mega profits, which we certainly don't envy, the truth is that far too many Jamaicans have been left behind. Energy and transportation costs continue to be high, and while there has been some variability in the exchange rate, the cost of living for the average Jamaican continues to increase, in spite of a so-called tax break, and the meeting of programme targets.

The raising of the income tax threshold to $1.5 million benefited approximately 500,000 Jamaican people out of a labour force of approximately 1.2 million. Nevertheless, it imposed a more than $30-billion tax package for every Jamaican to pay, including the most vulnerable who didn't benefit from the tax break. They must still put food on their table, send their children to school, and pay the mounting bills for electricity, and food. We are all paying more at the gas pumps today than we did when oil was US$100 a barrel, and the price of oil is moving steadily upwards again.

Remember, also, that this measure deprived our essential services, as well as the critical areas of education and health, of urgently needed investments. They say hindsight is 20/20 vision, but governments should not proceed on the basis of hindsight. We must ensure that we take the best decisions for the country.

Our mission has always been to build "a Jamaica that works for all", and that mission is even more urgent today. We were able, at the worst of times, to forge a significant partnership with the private sector, the trade unions, civil-society groups and the wider population.

It is imperative that the private sector be vigilant in your role as guardians of the health of our economy. Let me encourage you to demand, as you previously did, that the Government make the best decisions in the interest of the country and of its people. Only the most adept management of the country will get us through the crisis we now face.


Need for Effective Monitoring


You will recall that in the former dispensation, the country was provided with regular independent updates on the state of the economy through the EPOC. While I understand that is now done electronically and 'On the Corner', it seems to me that the reporting is less frequent and, I dare say, less comprehensive.

Where is the reporting previously demanded by the private sector? Is there no concern for rising crime or declines in the business climate? Is there no concern that the $30 billion, along with other additional taxes, could have been better spent on improving our social safety net, and making critical investments in health, security and road infrastructure?

I believe the effective monitoring provided by EPOC has been extremely beneficial and that we need to learn from it. I, therefore, support the recommendation made by Richard Byles that we incorporate a structure similar to EPOC in our legislative framework to ensure that after the IMF programme, we maintain our commitment to macroeconomic prudence and fiscal responsibility.

The membership of this institution would comprise multiple stakeholders, independently appointed by stakeholder groups. They would have access to all the necessary fiscal information - perhaps to be made available through the auditor general - and be free to give reports to Parliament and the public without censorship. Such an institution would help to protect the gains realised under successive IMF programmes, even as we move forward without the IMF oversight.


Focus on Growth


Growth remains anaemic, and despite repeated assurances, there are no immediate signs that the current growth targets will be met. A critical imperative for growth is a reduction in interest rates for loans necessary for private-sector expansion and the enhanced viability of micro, small and medium enterprises that are central job creation.

Growth also requires a serious and nationally supported plan to confront spiralling rates of violent crime and murders. It is evident that the zones of special operations initiative is not providing the short- or medium-term answer to the present wave of violent crime. What is urgently needed is a clear strategy to confront the criminals and immediate investments for re-equipping the police force with vehicles, intelligence-gathering equipment, and improved facilities.

It should be evident that growth targets will not be met without a 'new deal' for agriculture based on a programme of planned modernisation with training and the application of modern technology as priorities. The other elements of the 'new deal' would include:

- An efficient and re-energised land-titling programme.

- Road and irrigation infrastructure.

- Modernised extension services.

- A review of import and export licensing regimes.

Only a modern agricultural sector producing commodities at globally competitive prices can provide the level of rural employment and create stability in rural communities. We hear a lot of talk, but not enough action.

Finally, there are three other areas of immediate concern:

- Energy costs - Although with the replacement of baseload capacity - supplied by LNG being installed - costs are expected to be lower, they still do not put us in the realm of globally competitive energy rates. We need to increase the implementation of cost-efficient renewables and we need also introduce net-billing arrangements for producers.

- Labour-market reform has been delayed too long. Tensions are piling up within the labour force with the increasing use of the fiction of 'contract labour' for persons who are full-time employees, with the consequent reduced protection for workers that deepens their sense of injustice.

The long-term issue of training has to be addressed. The productivity of our labour force will not increase when 60-70 per cent of our labour force remains without certification.

- Crime, high interest rates, the cost of living and poor road infrastructure are all issues that we face as a nation and which require urgent attention. Coupled with poor decision-making and policy direction, these place the country in danger of losing the gains we have secured thus far.

Only by doing the hard, tedious and often risky tasks of nation-building will we build a Jamaica that works for all. In this regard, it is worth reminding that difficult tasks are best accomplished when we tackle them together in genuine partnership based on a politics of participation.

- Peter Phillips is opposition leader and president of the PNP. Email feedback to