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'Economist Magazine' calls for Jamaican private sector to be more dynamic

Published:Wednesday | June 8, 2016 | 12:00 AMAndre Poyser

The Economist Magazine has argued that Jamaica's quest for the ever-elusive goal of sustained economic growth can be achieved through a more dynamic private sector.

Pointing to the macro-economic gains made under the International Monetary Fund (IMF) economic reform programme (ERP), the influential magazine notes that the ERP is imposing some much-needed discipline, the benefits of which can be advanced through the mechanisms of globalisation.

"Today, four global forces - the IMF, mass tourism, the communications revolution, and social enterprise - promise something much better. Taken separately, none of these would put an end to stagnation. Taken together, they just might," the magazine said.

According to the United Kingdom-based publication, the forces of globalisation and discipline instilled by the ERP provide an opportunity for the private sector to become the genuine engine of growth that it should be.

"Jamaica can capitalise on this discipline only if the private sector becomes more dynamic. In the past, business life has been dominated by cliques, but more recently, the country's insular ways have come under assault from two industries that connect Jamaica to the outside world," the magazine said.

Tourism was highlighted as one of the shining stars of the economy.

 

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While not fully endorsing the all-inclusive model pioneered by hotelier Gordon 'Butch' Stewart, the article notes that the Government's plan to create greater linkages by having more tourists participate in the local economy can only be achieved if it gets a handle on crime.

"The Government may not want tourists to be walled off from the rest of Jamaica, but it can hardly expect the industry to adopt a different model if it can't provide law and order," the magazine said.

Telecommunications and business process outsourcing were also highlighted as growth areas in which the local private sector can credibly compete with their multinational counterparts.

"Broadband gives Jamaica a chance to take advantage of some of its most important resources - the English language and a time zone shared with America's East Coast - and to capture its share of the growing market in outsourced knowledge work such as accounting or legal tasks."

Turning its attention to the issues of poverty and crime, the twin monsters that continue to hold Jamaica in a vice, the Minton Beddoes-edited magazine hailed the model of social enterprise championed by Dr Henley Morgan.

Morgan was described as a former consultant who has established a social company, the Agency for Inner-City Renewal (AIR), complete with a CEO, a chairman and various business divisions to try to revive Trench Town.

AIR provides training, acts as a middleman between companies and locals, and teaches people how to establish businesses.

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It has also formed an alliance with Sagicor, an insurance company, to offer micro-loans.

The magazine issued a stern caution with regard to the ERP.

"Turning round a country with a history of mismanagement and violence will be painful. The Government needs to resist resorting to its bad, old ways. In particular, abandoning the IMF's programme just when it is beginning to work would be disastrous. Betting on globalisation does not guarantee a boost in the growth rate. Betting against it does guarantee sclerosis," it said.

andre.poyser@gleanerjm.com