Sat | Jul 11, 2020

Densil A. Williams | Reflections and prioritising for the next decade

Published:Sunday | December 22, 2019 | 12:00 AM

As we close the second decade of the 21st century and move to plan for the third decade of this long century, we need to use the time not only to celebrate but to define some key priorities that will guide us over the coming decade.

Jamaica already has a roadmap called vision 2030, which suggest that we literally have 10 more years (one decade) to achieve what Jim Collins would call the big hairy audacious goal (BHAG) of becoming the place of choice to live, work, and raise families.

If we are serious about this aspiration as the big, overarching vision to be accomplished for the next decade, we must take stock as to where we are now and what needs to be done to ensure that we hit the target by 2030.

TAKING STOCK

Looking at the developments in this second decade of the 21st century, one can conclude with all reasonableness that it was not a lost decade for Jamaica, despite the many challenges that still hinder inclusive and sustainable development.

On the macroeconomic front, the decade can be described as the inflexion point in our economic management. The global financial crisis of 2008 could be considered a blessing for us.

It forced the leadership of Prime Minister Bruce Golding and Finance Minister Audley Shaw to look differently at the dynamics of managing our economic affairs. The duo engaged the International Monetary Fund (IMF) and worked feverishly to deliver a new thinking and philosophy in the structuring and management of the affairs of the economy.

Despite the early positive successes that saw the debt to GDP ratio reducing and inflation rate, interest rate, and external balances all trending in the right direction, something went wrong, and the reform programme was abandoned.

Jamaica then faced a pivotal decision point.

Should we continue as we have done for the last 40 years, or should we bite the proverbial bullet and institute sustainable changes to the way we manage the affairs of our economy once and for all? The economic situation in 2011 was at its worst. Jamaican bonds were being dumped in the global market like garbage being dumped at Riverton City.

In 2011, Jamaica had its first election of the second decade. This election was important to determine how it will deal with its economic future. That election led to a massive defeat for the Government and the opposition rode into Jamaica House with a highly respected and loved, Prime Minister, Portia Simpson Miller.

She selected Dr Peter Phillips, now opposition leader, as her minister of finance. The duo set about making the difficult decisions to turn-around the economic fortunes of Jamaica from the critical state it was in 2011. It was not an effortless task and serious political and personal capital had to be extended to ensure that Jamaica did not have massive political and social unrest as the hard and austere measures were implemented to transform Jamaica’s economic fortunes from the precipitous cliff it was hanging on in 2011.

By the end of their reign in 2016, the Portia/ Peter duo, with their multilateral partners, mainly the IMF, delivered one of the most far-reaching economic transformation programmes Jamaica has seen in its short 57-year history.

When the second election for the decade came around in 2016, all the macroeconomic indicators in Jamaica were pointing in the right direction. Poverty was down from its high levels in 2013 interest rate, inflation, and external balances were all trending in the right direction, and economic growth, although paltry, had started picking up.

Indeed, the Jamaican stock market was voted in December 2015 as the best-performing stock market in the world. Similarly, all rating agencies were revising their outlook on Jamaica from negative to stable.

One would say on the economic front, the Portia/Peter duo along with all stakeholders in the private sector, the social partnership council, the NGOs all delivered on turning around the economic fortunes by the first half of the second decade in the 21st century.

Those first five years of the second decade laid the foundation for what the Andrew Holness/Nigel Clarke duo is now reaping in terms of macroeconomic successes in the last five years of the decade.

In 2016, as the first half of the decade closed, Jamaicans went to the polls on the back of one of the most austere economic programmes to be delivered in its history and, with the gains just starting to take shape, removed the Government by the slimmest of margins, 32-31 seats. This set the stage for the beginning of the last lap for the decade.

The Holness/Shaw then Holness/Clarke duo, being mindful of the sacrifices which the Jamaican people made to ensure the economy does not go back to its 2011 period, made a concerted effort to carry on where Portia and Peter left off.

SUSTAINABLE GROWTH

Today, as we close the second decade of this century, one can say that, although strong and sustainable economic growth is still eluding us, the foundations at the macroeconomic level are trending in the right direction. However, these conditions will not deliver robust, sustainable and inclusive growth which is needed for vision 2030 to be realised.

Clearly, serious priority will have to be given to the micro-economic foundations for growth. That is, education and its progeny, productivity, social cohesion, the rule of law and, asset and property ownership.

While the macro-economic numbers are trending positively, that is not sufficient to allow us to attain the BHAG for 2030. Much more needs to be done to ensure inclusive growth.

The 2019 Human Development report showed that when Jamaica’s Human Development Index (HDI) score is adjusted for inequality, the ranking nosedives by over 16 per cent.

We cannot become the place of choice to live, work, and raise families when inequality and its offspring, crime and violence, social dislocation, and lawlessness, is the way of life for the masses.

As such, besides building infrastructure, Jamaica will have to place significant emphasis on building human capital through a reformed and purpose-built educational system; social harmony through positive values and attitudes; self-respect and a sense of pride in nation-building through participation in the ownership of the resources of the country (for example, land, housing, access to beaches and recreational parks, etc); and, significantly, a strong focus on the rural economy for the next decade.

There needs to be a dedicated ministry looking after rural affairs, as the rural economy is generally left behind in the cacophony of daily policy making and implementation. If one should read closely the Jamaica Survey of Living Conditions, you will see the grim statistics for almost all indicators, from education, healthcare, national security to basic economic survival. The rural economy will need dedicated focus over the next decade to include it in the mainstream of economic and social life in Jamaica.

Happy holidays, and best wishes to all for 2020, the beginning of the decade that will define our direction for the remainder of the long 21st century ahead.

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