Sun | Jul 22, 2018

Mark Ricketts | Nigel Clarke, the PM and his Cabinet

Published:Sunday | April 15, 2018 | 12:30 AMMark Ricketts

There are economic headwinds confronting us, including the effects of weakening business confidence as reported a few days ago in the latest Don Anderson survey. Government has to realise that it can’t be business as usual. It has to reprioritise expenditure by reducing the size of the Cabinet and the large number of ministers, and it must place greater emphasis on ways to transform the economy.

Efficiency starts at the top. Good government is not about quantity in trying to get every elected MP a ministerial post but about quality as far as vision, performance and productivity.

For several years, starting in the early 1980s, I published a business and financial magazine called Money Index. A young man loaded with postgraduate degrees in mathematics and computer science came to our office after returning from his studies in London. He offered to write some articles for us. The response from readers to his articles was overwhelming. One reader blurted out over the phone, “WOW! Who is this kid, Dr Nigel Clarke? Man, he is heavy.”

Another WOW moment came shortly after Dr Clarke was appointed to the Senate and impressed members on both sides of the aisle with his discourse, intellect and grasp of issues.

I am hoping for a third WOW moment now that he is minister of finance and the public service. Having been extremely successful in the private sector where the profit motive drives efficiency, productivity, and optimisation of resources, it would be nice if he could get his Government to pay serious attention to public expenditure and waste, to be less partisan in the awarding of contracts, and to be transformative in its thinking.

I make this special request for several reasons:

First, the economy is still recording lacklustre growth and can’t continue the current direction in public-sector expenditure.

Second, our invisible trade deficit is horrendous. Exports last year were just over US$1 billion and imports exceeded US$5 billion. What is alarming is that the deficit jumped by more than US$1 billion last year.

Third, remittances, which declined last quarter, could be on a lower trajectory.

Fourth, recent sanctions on Russia affecting aluminium will impact negatively on us as evidenced by the London Metal Exchange ceasing trading activity from April 9.

Fifth, migration of larger number of Jamaicans to other countries has been a safety valve, but, with an increasingly large number of deportees returning home, in-migration is now exceeding out-migration.

Dr Clarke’s affinity with numbers and what ails Jamaica should result in him offering the PM a no-holds barred set of suggestions.

Recommendations I would like to see him make are:

a) Reducing, at an accelerated rate, the number of statutory bodies. Imagine what could be saved in rent, maintenance costs, and the duplication of top-heavy executives and consultants. Moreover, with Government eking out negligible returns on more than $1 trillion worth of assets, it could rationalise and bundle several of these for listing on financial markets. This could be part of public-private-sector partnership.  

b) Having a new approach to corporate governance of statutory bodies and the awarding of contracts to the most competent.

c) For efficiency and effectiveness, we should eliminate three ministries by putting culture, gender affairs, entertainment and sport  under a Ministry of Tourism, Sports, and Culture; science, energy, and technology under a Ministry of Education, Training and Technology; transport under a Ministry of National Security and Transport; and mining under a Ministry of Investment, Agriculture, and Business.

In addition, the Economic Growth Council (EGC) and the Ministry of Economic Growth and Job Creation, which are growing rapidly, without results commensurate with pronouncements, should be scaled back sharply. We should keep the title growth czar to underscore the Government’s commitment to growth and let the nominee liaise with the minister responsible for investment.

I would like the society to think of what we have now; the huge costs involved; and the confusion that arises from similarity of functions and repetition of activities.

You have the prime minister’s office housing ministers without portfolios, a sort of catch-all group to facilitate growth; JAMPRO, a promotional group to ensure growth; EGC to secure growth; then there are a plethora of divisions in ministries such as Foreign Affairs and Foreign Trade, Tourism, Mining and Transport, to aid growth.

The new finance minister must be conscious of cost duplication across ministries and statutory bodies, and an up-to-date analysis of the public sector would show to the PM and his Cabinet that what exists at the moment makes little sense, especially in light of the prevailing headwinds.

The organisational structure is antiquated, equipment and technology are outdated, service is less than stellar and reflects a degree of politicisation, lack of training, inadequate remuneration, and distorted pay arrangements bedevilled by allowances.

 There must be re-engineering in order for the public-sector apparatus to become a modern, technologically advanced, service-oriented organisation.  

 One worry I have with Dr Clarke is that I listened to him say a year ago: “Anybody in Jamaica who earns J$ 1 million a year is rich.” That is equivalent to US$7,800 annually. He was a guest speaker at UWI. The audience snickered. He repeated his pronouncement. Afterwards, members of the audience gathered informally and provided examples of office workers in small businesses, security guards, gardeners working six and seven days a week or doing overtime, earning a million or more, but having problems with auxiliary school fees for their kids, rent payments, or being forced to live in illegal settlements. They are not rich.

It worries me that a minister of finance who is now responsible for paying the salaries of many underpaid public servants could have held that view. I am hoping it was a bad joke or a serious mistake.

He has to give us that third WOW moment by living up to the high expectations for which he prepared himself.

Postscript. A day after submitting my column to The Gleaner, Dr Clarke, in addressing a labour market forum, said that the rationalisation of 190 public bodies is being fast-tracked to place the country firmly on a path to economic independence. He pointed out that there were “190 chief executives managing the public bodies and an equal number of boards of directors. The complexity this introduces is simply unmanageable for a country of our size and resources.”

His third WOW moment has probably started.

- Mark Ricketts is an economist, lecturer and author. Email feedback to columns@gleanerjm.com  and rckttsmrk@yahoo.com.