Daniel ThwaitesBEHIND THE public posturing about the reliability of the latest PIOJ report indicating some economic growth is some very real confusion. Contradictory signs of advance and decline are everywhere, made vivid in heartbreakingly pathetic scenes all across the country.
Today it is a beggar in designer clothing, tomorrow a news-report of a tenement-yard fire destroying goods of such diverse and rich description and value as to make you wonder if the victims are telling the truth. Perhaps the most striking image is that of a man sleeping on the street with a cell-phone attached to his belt I saw this myself last week. I believe people are genuinely trying to make sense of it all.
Remember that wonderful little fairy-tale about the Emperor and his new clothes, where because of public say-so everyone except one fellow was willing to say that the man was butt-naked. Nowadays the orthodoxy demands that every line begins with the ritual apologia, "despite the poor state of the economy". I think that ritual genuflection is unnecessary and untrue.
While the formal economy has been flat, the informal economy is obviously flourishing and growing by leaps and bounds. There is no question that times are still tough for many people. But at the same time there is no question that things have moved to a completely new level when compared to 10, much less 20 year ago. Ten years ago a middle-passage bus system was the only way to move about. Nowadays a man is worrying about his front-end: so he purchases a peanut-punch and a magnum while taking the car to the mechanic. He may be more miserable, but he is better off than previously. It wasn't reported that way, but the Anderson poll published by The Gleaner showed that almost half of the respondents felt that they were either the same or better-off than last year.
The conspicuous consumption is obvious. The Financial Gleaner recently reported that cell-phones are being mopped up with alarming speed.
So much so that Cable and Wireless worries that their network is not yet able to handle the increased activity. Between January and June there was an almost 40 per cent increase in installation by Cable and Wireless over the same period last year. The words "all our circuits are busy at this time" have become familiar to hundreds of thousands of phone-users, indicating that more and more people are gabbing away. And so it is generally with all the utilities.
Electricity consumption surges ahead. The PIOJ reports a 7.2 per cent increase in total electricity generation between January and September 2000. This is normally associated with a 6 per cent increase in real GDP. There were similar figures on this economic indicator last year. Hence, unless one argues that Jamaica is completely anomalous, the reasonable conclusion would seem to be that the weak performance in the formal economy belies growth in the informal one.
Take another indicator where the figures demand better explanation than the overall figures on the formal economy provide. Cement sales and housing starts have galloped away. Housing starts are up by a huge 68.7 per cent. Housing completions are up by 17.9 per cent. How do you explain that? Cement sales are up by just under 10 per cent, and the value of imported construction material up by 4.4 per cent. Construction is booming.
After some observation I am forced to conclude that with the onset of even a slight drizzle, Jamaicans jump into their cars and go for a drive. What else could explain the severe traffic congestion whenever there is a shower?
But that aside, is there anyone who could have predicted 10 years ago that this society would take up car-ownership with the furious resolve that it obviously has? Which means that our curious habit of sitting in cars when it is raining causes complete gridlock on the already choked roads when the Christmas rains have drizzled. Those choked roads are a sign of opulence, unexplained but visible to anyone willing to look.
Consumer demand has increased year after year. There is no gadget or widget available elsewhere in the world that is not in short order on full display in Jamaica. There is a passion for consumption that bespeaks not only a history of deprivation and the desire to show it vanquished, but also of an economic ability to do just that. Furthermore, Jamaica continues to export people and talent. We suffer because of it and we reap benefits from it. Money remittances, already a staggeringly large proportion of the GDP, jumped by 10 per cent.
People not only have more money to spend, but they are saving more. Bank deposits by individuals increased by 5 per cent in July 2000 as compared to July last year.
Tax-dodgers
Revenue intake continues to grow, partly due to the vast improvements in collection, but there must be more to it than that, as high-profile tax-dodgers abound some even complaining about the economy. Meanwhile the international watchers are ever more upbeat, Standard and Poor and the World Bank weighing in with guardedly positive reviews. The World Bank credits the government with "resolve in maintaining a very tight and potentially unpopular fiscal stance". Additionally, despite surging oil prices that have rocked the economies of England and the states, humble Jamaica will likely meet its inflation targets. That is real achievement.
The formal economy will show growth this year. The informal economy has obviously never stopped growing. One of the challenges is to capture and record all the data, if only to put an end to the counter-intuitive anthem that the economy is in complete shambles. That Emperor is naked because poverty is down, consumption is rising, and there is growth in the economy. The truth may hurt, but all our circuits are busy at this time.
Daniel Thwaites is involved in teaching and writing.
