Sun | Dec 8, 2019

Densil Williams | The rule of law, corruption and economic growth

Published:Sunday | February 17, 2019 | 12:15 AM
Metry Seaga

There is general consensus in both the academic and practitioner literature that there is a direct positive correlation between economic growth and the rule of law. That is, where the rule of law is strong – for example, property rights are upheld, the constitutional rights of all citizens are upheld, contracts are settled based on the agreed terms and conditions under which they were negotiated, among other things – economic growth is also strong.

This is not unsurprising as investors like to put their monies where they have a strong chance of making a return on it and, most important, getting back that money when they need it.

Upholding the rule of law is even more critical for small countries that do not have many and diverse sources of competitive advantage in the inhospitable global capitalist system. It is only the rule of law that can provide these nations with protection from the hostility of large and developed countries that from time to time, might have different agendas that may conflict with good moral order and principles of justice and dignity.

So, at all times, irrespective of the urgency of now, small nations must always stand on the side of principle and actions that uphold the rule of law at the national, regional, and global levels. The appeal to be pragmatic and expedient when it comes to the rule of law is both wrong and dangerous.

Unfortunately, despite the clear, empirical evidence that upholding the rule of law is a vital variable in the drive towards sustainable economic growth, there seems to be a lack of appreciation in the context of Jamaica.

A number of recent events have led one to reflect seriously on how critical our leaders and policymakers view the rule of law as an enabler of the growth and development that we so desire. Not unimportant is when policymakers treat the rule of law as a mere esoteric exercise and something that can be put on the back burner in the quest for expedient results to satisfy the insatiable appetite of an impatient electorate for solutions to pressing, longer-term problems.

RECENT DEVELOPMENTS

To have listened to the puerile squabble over the constitutionality of the state of public emergency, which ended recently in Jamaica, one could never believe that we are a nation seriously on a mission to ensure long-term sustainable growth for our citizens.

The Opposition argued that it has strong evidence from experts on the constitution that the conditions that led to the states of emergency no longer exist and, therefore, extending them would be unconstitutional. The Government, on the other hand, says that they have a counter-argument to those claims.

Any nation serious about the rule of law would never have this situation deteriorate to the low levels we have seen in the communication between the office of the Prime Minister and the Leader of the Opposition. Instead, it would find the constitutional court, seek an extraordinary session, and let the court rule on the matter.

This route did not find favour with the powers that be. Instead, our policymakers take the responsibility of the courts into their own hands and decide to adjudicate on a matter in which they have no competence.

This is not a direction in which we want to see Jamaica go, and the leadership must exercise greater care in dealing with matters that are at the heart of our liberal democracy and not just pander to public sentiments.

Our courts are designed to deal with legal issues. let them do it. We should never allow any political or civil servant to take on this role, for it will lead to the most unwarranted outcome, unbridled corruption, which is the natural outcome of a breakdown in the rule of law.

There seems to be an unsettling trend creeping into our governance process, where the Parliament and the Cabinet are taking on judicial powers and trying to settle issues that rightfully belong to the courts.

The example of the expropriation of Venezuelan shares in Petrojam is the most recent. There are others, such as the appointment of the chief justice a few months ago and the situation with the UC Rusal Lands at Kirkvine, where a minister determined, unilaterally, to terminate a lease agreement.

These are not good signs and must be stopped urgently before Jamaica goes off a cliff with these types of decisions that pay little regard to the rule of law.

CORRUPTION AND THE RULE OF LAW

The tough-talking taking head of the Jamaica Manufacturers and Exporters Association (JMEA), Metry Seaga, recently put on the front burner again the issue of corruption and its impact on our inability to grow our economy in a sustainable way.

Like the tireless campaigner for anti-corruption, Professor Trevor Munroe, Seaga laments the crippling effects that corruption has had on Jamaica’s gross domestic product (GDP).

Many studies have shown that corruption has cost Jamaica in the region of four to six per cent of GDP growth per year. This is by no means anything to ignore. The lack of focus on the rule of law leads to this kind of outcome.

When policymakers can ignore due process in the oversight of their ministries, then any game will play as it relates to corrupt practices. It is no wonder that we have such a mess at the multibillion-dollar state oil refinery, Petrojam. And similarly, we are hearing many reports from the auditor general about malpractice at places like Dunn’s River and E-Learning, among others.

A lack of attention to the rule of law and policymakers treating the constitution as if it were just another theoretical document over which legal minds can quibble has, no doubt, led to some of these elements of malpractice at our state-run agencies.

We urgently need to reverse this dangerous trend that is creeping into our governance processes. Jamaica does not have the luxury of time to sit and make these constitutional and legal blunders as investors, both locally and globally, are looking on and will be dissuaded from doing business with us.

CONCLUDING THOUGHT

As Jamaica continues to position itself as an attractive environment for domestic and international investors to do business, it must also send the right signal to investors that it is a society of rules and laws and the sanctity of its constitution is paramount.

Policymakers, in their actions and utterances, must also show respect for the sanctity of our Parliament and constitution by being truthful at all times and not make unsubstantiated and alarmist claims that run counter to the facts.

Lawmakers must also show the world that despite the urgency of now, our position on the rule of law is always principled and moral.

While some might not like it, they will always respect us for our principled position on issues. Irrespective of the situation, we should never compromise on principle in relation to the rule of law. It will only make us stronger, not weaker. Upholding the rule of law will only benefit us in the long run. it will not hurt us.

- Densil A. Williams is professor of international business at the University of the West Indies. Email feedback to columns@gleanerjm.com and densilw@yahoo.com.