Tue | Apr 7, 2020

Densil A. Williams | More prosperity, more poverty

Published:Sunday | August 25, 2019 | 12:16 AM

It is unsurprising that Ministry Paper 51, which was discussed in the Jamaican Senate on August 2, 2019, showed that the incidence of poverty rose in Jamaica in 2017. Data from STATIN show that Jamaica had incidence of poverty at 24.6% in 2013, and it declined steadily to 21.2% in 2015. Further, the ministry paper reported that overall poverty in Jamaica moved from 17.1% in 2016 to 19.3% in 2017.

If one looks at the macro picture since 2013 when Jamaica, under the stewardship of Dr Peter Phillips as finance minister, had to make significant adjustments in the financial management of the affairs of the country and which is now bearing significant fruit in terms of economic stability and growth, the data would suggest that we were in a better position in 2017 regarding our goal of reducing poverty.

However, while that academic interpretation is correct, the fundamental issue is that rather than reducing poverty from its low of 17.1% in 2016, what we are seeing is an increase since then. This is an uncomfortable direction considering the Government’s election campaign slogan ‘From Poverty to Prosperity’.

The inconvenient question that must be asked now is: With the slavish adherence to neo-liberal prescriptions for economic growth and stability, will Jamaicans really see a movement from poverty to prosperity?

There is no doubt that good things are happening in the Jamaican economy. The headline macroeconomic indicators have pointed to low unemployment, low inflation, low interest rate, low debt-to-GDP ratio, and hefty foreign exchange reserves. Thanks to the work of the Portia Simpson Miller-Peter Phillips team, which took the baton from the Golding-Shaw duo and made a commitment that Jamaica would never go back to the days of fiscal recklessness.

Today, the combination of Andrew Holness-Nigel Clarke is making sure that those gains are not erased. However, what is missing is a clear plan to move the mission to a new level: closing the inequity gap.

The gini co-efficient, which measures the level of income inequality in the society, since 2010, has not moved significantly. In 2010, rounding to one decimal place, the coefficient stood at 0.4. In 2015, the last reported figure shows that it is still at 0.4. It should be the priority of this Government to sell to the nation a clear plan to reduce inequity.

The current model is undesirable – a very small minority reaps the rewards from growth while the majority is getting poorer. This current model is clearly not working for all. We need a Jamaica that works for all its citizens and allows them to live a decent life, not one on the periphery with low-paying jobs and insecure employment.

This is the harsh reality that most of our people now face despite the low levels of unemployment in the society. To my disappointment, both the minister of finance and his opposition counterpart, instead of presenting concrete solutions, entered into an academic discourse about how the numbers should be interpreted and what caused the rise in poverty.

While that debate is nice to have, the most important discourse should be focused on reducing inequity, building a sustainable, high-quality workforce, and ensuring that all Jamaicans can benefit from the growth in the economy.

The Reform Agenda

With more than 900,000 Jamaicans out of a workforce of over 1.3 million not having any certification beyond primary and secondary education, it is almost impossible for them to successfully participate in a growing economy in this age of knowledge-led globalisation.

Low-paying jobs will not give them a liveable wage, and with government fiscal space weakening, spending on social safety nets will be reduced even further. As such, if we do not educate and train more people at the post-secondary level and provide them with skills that are transferable, the notion of ‘poverty to prosperity’ will only be a marketing ploy and will never be achieved.

So, a big part of the reform agenda for dealing with the rising poverty has to be an education revolution and getting more persons to access post-secondary education. The current level of access is too low. This is threatening the very essence of the movement from Poverty to Prosperity.

The next important agenda item is ownership of property. Basic things like land reform are taking too long to be done in Jamaica and deny too many persons, especially the ‘small man’, of having collateral that they can use to secure necessary funding to advance their small businesses, pay for their education, and build a better quality of life. Government policy should facilitate mass land ownership in the fastest possible time.

Neo-liberal hawks will shout that the cost to do this is prohibitive for the Government. This is not a serious argument. The issue is not cost. it is about priority. Land ownership for the masses must be a priority for any Government, especially those in a post-colonial society. This is one of the fundamental variables that can move the masses from poverty to prosperity. It must be prioritised and done with urgency.

Too many people in Jamaica are being left behind as confirmed by the recent survey showing a rise in the incidence of poverty. They are being left behind in healthcare, education, and general standard of living. The country can ill afford this while a small minority live opulent lifestyles. This is a recipe for anarchy.

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