Lee-Chin's growth target: Local advocate not impressed
The aim of five per cent economic growth in the next four years, announced by newly appointed growth tsar Michael Lee-Chin, is being viewed with scepticism by Paul Ward, a member of the Campaign for Social & Economic Justice (CSEJ).
According to Ward, the Gross Domestic Product (GDP) growth target announced by Lee-Chin, is based on a measure of prosperity that is fraught with shortcomings and has an inherent moral hazard.
"Michael Lee-Chin can always blame everyone else for not buying into his vision of one form of growth or another, he has already effectively said that indirectly. His promise depends on others who may not pull their weight. He does indeed have an insurance policy against failing the target and so can make it whatever he would like," Ward told The Sunday Gleaner.
Making the first pledge
Shortly after his appointment, Lee-Chin said: "I am going to make the first pledge, but I'm going to ask all stakeholders in Jamaica also make a public pledge as to what their involvement in GDP growth is going to be."
But Ward charged that Lee-Chin's pledge is misplaced, given the inadequacy of GDP to comprehensively capture all the dimensions of an economy.
"Given that the informal economy is 40 per cent or more of measured GDP, all he has to do is to formalise a small portion of that to 'succeed'. Offering incentives to come into the formal tax system could be all that is needed to achieve a growth target, even without any real growth or negative real growth," charged Ward.
He argued that other measures of prosperity and growth have to be considered to measure if Jamaicans are enjoying an improved standard of living over the next four years.
Ward argued that the shortcoming of GDP as a measure of economic output has long been agreed.
He expressed strong support for the GDP-plus measure, a concept promoted by The Economist magazine in the latest cover story of its print edition titled 'How to Measure Prosperity'.
"This new metric, call it GDP-plus, would begin with a long-overdue conceptual change: the inclusion in GDP of unpaid work in the home, such as caring for relatives.
"GDP-plus would also measure changes in the quality of services by, for instance, recognising increased longevity in estimates of health care's output. It would also take greater account of the benefits of brand new products and of increased choice.
"And, ideally, it would be sliced up to reflect the actual spending patterns of people at the top, middle and bottom of the earnings scale."
In addition to GDP-plus, Ward suggested that alternative measures such as the Human Development Index, World Happiness Index and the Happy Planet Index be considered as targets for the Economic Growth Council which Lee-Chin chairs.