Tue | Jul 23, 2019

Densil A. Williams | Crime and corruption testing leadership

Published:Sunday | May 19, 2019 | 12:17 AM
The current SOE in the western parishes must not be allowed to take root for more than three months, during which time, clear outcomes must be had.
Densil Williams
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There is no doubt that good things are happening in the Jamaican economy. Our debt-GDP ratio is on a downward trajectory although helped substantially by the redefinition of what makes up the debt stock and the buy-back of the PetroCaribe debt in 2015. Similarly, unemployment is at record-low levels despite the quality of the jobs and the nature of the contract work environment, which does not make people better off but gives them enough resources to keep them going on a daily basis. Critically, there is growth in the economy.

Any reading of the future prospects for the Jamaican economy will reveal that the future, while still fragile, looks positive. However, there are some headwinds in the other areas of the nation state that threaten to derail this positive economic outlook if not dealt with urgently and decisively.

It is William and Alan Ebenstein, authors of Great Political Thinkers: Plato to the Present, who remind us that man is not only an economic being but a social, spiritual, and political being as well. So despite positive economic news, if we do not fix the other areas of our being, the gains from the economic transformation will not be manifested in any real way, and the majority of Jamaicans will remain poor while a small minority enjoys the largesse from growth.

Corruption is testing leadership in Jamaica today. It is the International Monetary Fund (IMF), whose inspiration has led to Jamaica’s economic fortunes looking brighter today than they were a decade ago, that has warned sternly that the Government must deal with corruption now. Even before the IMF gave its edict, a number of local opinion leaders in the Private Sector Organisation of Jamaica (PSOJ), the Jamaica Manufacturers and Exporters Association (JMEA), National Integrity Action (NIA), among others, have been warning about the ills of corruption and the impact on building a sustainable economy.

Further, the Global Competitiveness Report of 2016 identified corruption as a top inhibitor to doing business in Jamaica. With a close reading of all the reports in the international and local arena and listening to the various commentaries, one can only conclude that we have a problem with corruption whether perceived or real.

While I strongly support the view that we should not label every deed that does not follow the letter of the law as corruption, but allow due process to investigate and come to conclusions about issues, we cannot sit and allow the country’s resources to be used in a less-than-judicious manner and not call our leaders to action.

UDC-ROOMS ON THE BEACH DEAL

The Urban Development Corporation (UDC)-Rooms on the Beach deal has stirred the debate about the level of corruption in Jamaica again. It appears that what most persons have a problem with is the sharp discount that was given Puerto Caribe, the operators of Moon Palace Hotel, which sits beside Rooms on the Beach, for the acquisition of the property and the beach land.

The reports from the media show that the property, was valued circa US$11.8 – US$13.5 million but which was sold for circa US$7.2 million. So if we take the higher value, the discount on the sale price is roughly 46 per cent. Further, Puerto Caribe gets the beach land at no additional cost. These lands, it is said, are valued at between US$3.4 million and US$3.7 million. If this are taken into account, the discount would be roughly 58 per cent. So if we are to take the higher values from the valuation, in dollar terms, the State would have given up US$10 million, or J$1.3 billion, in discount to Puerto Caribe for the Rooms on the Beach deal.

On the face of it, this looks massive, but there is a bigger context. Any business person would tell you valuation and sale price do not always reconcile. So it is not unusual for businesses to be given discounts and of that magnitude in sale negotiations. Further, the Government is reporting that there is a US$500 million project to be constructed on the property; over 7,000 jobs to be generated, and over US$30 million in taxes to be generated in three years from this deal. If these figures are correct, then on a net basis, the deal is indeed a positive one.

REAL ISSUES

However, the real issues that need to be uncovered are:

- Did the sale of a prime property to Puerto Caribe result from an unsolicited offer?

- Were other interested parties from the international and local business arena invited to the table to make an offer and with similar developmental plans as Puerto Caribe?

- Why was the offer price from Puerto Caribe reduced from the US$9.3 million to US$7.2 million?

- Why was there need to settle with Puerto Caribe without testing the market for other investors given the prime location of the property?

I think answers to these questions will help to set the record straight. I do not believe that the issue of ministerial interference is a big one as from all readings, the reports have not shown how the minister unduly influenced the deal.

Further, the very crude comparison with this deal and the famous John Rollins deal is way off the mark. This is not one and the same. A close reading of Patterson 2018, pages 224-225, provides context. Journalists should do a better job of educating the people on this issue. The records are there to be read.

Crime and theft are also important factors, according to the Global Competitiveness Report, that inhibit successful business operations. The Government has gone for another set of states of emergency (SOE) to deal with crime in the western parishes, including St James, which had an SOE for almost one year in 2018.

An SOE will not solve the crime problem in Jamaica. While it provides short-term solace and people love it because it gives them a false sense of security, it cannot be a long-term strategy to deal with crime. The current SOE in the western parishes must not be allowed to take root for more than three months, during which time, clear outcomes must be had.

An SOE was in St James for almost 12 months, and subsequent to the removal, the situation revert to where it had been. It shows that the SOE by itself will not lead to a sustainable solution to crime. The argument that it ended prematurely is not credible. For 12 months is a long time. We do not want to live in a police state in perpetuity.

Dealing with corruption and crime will require strong leadership, with integrity, a clear mind, and focus. The recent filings from the Integrity Commission report to Parliament show that we have a problem as a nation. Too many of our leaders were not able to get their filings cleared. This leaves many questions about their integrity and seriousness of purpose to deal with corruption and crime. Leaders have to send a strong signal to criminals, and it must start by showing that their integrity is intact.

 

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