Errol Hewitt, Contributor
Hewitt
"AND MY peoples shall dwell in a peaceable habitation and in sure dwellings and in quiet resting places," Isaiah 32:18.
Jamaicans, both at home and abroad, are accustomed to hearing the pointed suggestion by various persons representing a wide cross section of disciplines in civil society, for the substantial reduction in the size of government. In making this call, a variety of reasons have been presented: mainly the insufficiency of the national budget; the inadequacy of the current organisational structure, together with the demonstration of renewed seriousness by citizens. Jamaicans are impatient to begin to see an upward path for the country; a nation at peace with itself, beginning to experience the prosperity that every citizen knows is attainable.
The suggested reduction involves the number of ministries and the civil service, the intent being to retrain the displaced staff in viable areas and utilise savings to increase funding for social and economic development. Prime Minister Patterson in response, suggested that the actual savings would be minimal and not worth the effort. This betrays government's inherent reluctance to itself make sacrifices in reducing the number of ministers and its resolve to defend the status quo. Surely if the number of ministries and staffing were cut by say a third, to the mandatory eleven, this would represent a substantial saving, if the work output remained consistent.
As its first line of defence, it baulked at reducing the size of the civil service by negotiating a memorandum of understanding with the unions which freezes both salaries and the size of the workforce. While we understand the Government's fear of political fall-out both from the separation of staff and the reduced number of ministers, equivocating through postponements only buys time and inevitably the problem returns and is sometimes even more costly.
The point here is that in contrast to Government's income and the advantages of technology, the public administration is overstaffed (emoluments are 37 per cent of revenue) and more productive use has to be made of both staff and funds.
WHAT'S BEHIND IT
The available statistics continue to show a
serious debt burden which absorbs over 66 per cent of the budget. The increasingly negative balance of trade revealing the value of imports increasing while those of exports declining, are serious omens for the future.
Agriculture continues to flounder not only from the effect of succeeding hurricanes interspersed with droughts, but also from succeeding governments' indecision as to exactly what to do with it. Policies are consistently conflicting and confusing and in the face of all the problems, periodically, the country is presented with a miracle solution, currently ethanol, which like, the claim for gold in St. Catherine and 40,000 jobs will rescue the sugar industry, significantly reduce the importation of petroleum and turn both the agriculture and national negatives into positives.
The important manufacturing sector a potential large employer with growth below two per cent and much of this due to the recent resumption of the production of refined petroleum products is still urgently requiring both Government's grasp of its real needs and the resolve to satisfy these. The sector, at much inherent disadvantage regionally, will be well tested for its very survival when the Caribbean Single Market and Economy (CSME) gets into full stride.
The earnings from tourism government's 'flagship' of the economy are still largely retained overseas. For an industry with so much potential for increasing local linkages and earnings meats, exotic fruits, entertainment, furniture, art and craft, etc. there is still a tremendous amount of work to be done broadening local commercial linkages, and enhancing the product, including the implementation of international standards. Countries without Jamaica's obvious assets have with much less, learnt to excel. With these assets, together with so many qualified and experienced persons locally, Jamaica can do better. It must do better.
It is noted that Jamaica cannot compete in terms of salaries and other benefits with developed countries and certainly many qualified and experienced as well as young people of promise have migrated from its shores, attracted by 'greener pastures' and lack of opportunity here. Many, however, especially the young qualified are increasingly having to migrate because of fiercely ascriptive, almost feudalistic oriented workplaces.
WHAT IT MEANS
The less than successful sectors in the economy contribute to the nation spending far more than it earns, with the difference being covered over the years by funds borrowed locally and overseas. Government borrows so much that in honouring the repayment of its debts while meeting its considerable wage bill, it finds it extremely difficult even with current efforts in attracting investments to obtain the kind of funds required to 'turn the situation around.' This is so even with major inflows from the Jamaican Diaspora in North America, Europe and Southern Africa.
One alternative is, despite the albatross of the high murder rate, to find the right package of incentives to attract substantial investment but at best, this will take time to crawl through the pipeline. Time is now at a premium. It seems painfully inevitable therefore that the more immediate and substantive path is the reduction of the size of government.
ANNUAL USE OF GOVERNMENT'S
REVENUE 2004/2005
Figures from the Ministry of Finance indicate that in respect of Government's income (revenue) for the fiscal year 2004 to 2005, 54 per cent was allocated to pay interest on debts; 37 per cent to meet salaries of its employees and nine per cent towards the budget. This nine-10 per cent of revenue is impossible to run the entire country. Loans and grants added to collected revenue therefore become inescapable for completing the financing of the nation's budget. In other words, approximately 90 per cent of the annual budget is made up of loans and grants. This is staggering! Unless there is a drastic dramatic change in Jamaica's approach to development, the country will continue in this mode of tottering on the brink of an abyss or worse. Which country can continue to exist like this?
These figures also make it clear that any corruption in Government is tantamount to stealing from the destitute and should be relentlessly investigated and severely punished. They indicate that to meaningfully affect development and given the nation's abhorrence to renege on the paying off of its debts, then the inescapable must be the reduction of the size of the Government. Reducing the size of government, however, in a development thrust, involves providing opportunities for those displaced.
One of the seemingly 'logical' results of this scarcity of funds is maximising revenue inflows everything that can possibly be taxed is taxed. The effect is that despite the critical need for revenue, taxes are studiously avoided if at all possible, leaving the trapped Pay As You Earn (PAYE) as usual to shoulder a significant portion of the burden of this disingenuous and onerous approach while actually restricting the revenue collected. To look for the answer in increasing taxation alone is similar to buying a suit or gown without wanting to pay for the cloth and sewing of the garment. It is short sighted and unrealistically ambitious. There has to be greater effort to involve increasing number of citizens nationwide into productive work in the economy.
A symptom of the state of the economy is the level of unemployment, which we are told is approximately 11.7 per cent. This, however, is insufficient information; we need to know as well both the underemployment rate those 'barely' employed and the numbers of persons who are hearty but no longer seeking employment, in order to get a better picture of real employment.
About 30 per cent of the population is 29 years of age or under, with an unemployment rate among the men of over 24 per cent and for the women the rate is appallingly over 40 per cent. These unemployed and 'left behind' young people are in reality, a substantial part of the nation's future waiting to become involved in the mainstream of its activities.
Significantly, it is this age group of young Jamaicans which forms the majority of those without formal educational qualifications; it is in this group that the majority of victims and perpetuators of crime are to be found; it is this group which accounts for the majority of children born in single-parent households and the majority of absentee fathers; and it is in homes without fathers that the majority of all these events occur.
It must be obvious that this group has to become an urgent priority of government if the nation is to secure its future.
WHAT NEEDS TO BE CONSIDERED
It is acknowledged by most that education/training is an important hinge on which the door to development rests. A look at the directional trend of education reveals that of the registered students and first degree graduates from local universities, the majority are involved in the social sciences, education and art; which indicates the nation's traditional expectation of where development is being propelled from. In contrast, the areas of engineering, mathematics, science and technology are internationally acknowledged in this post-modern era as prime disciplines for the required creativity and innovation of the knowledge-based society.
Whatever are the decided components of the nation's thrust in education (e-education etc.) it must fundamentally be guided by the goals of a national strategic plan. For the nation to do otherwise is similar to purchasing a giant 747 )
e-education/education reform) without a flight plan or firm destination in mind just estimating where you are going and how to get there.
With the above basic factors in mind, it is doubtful that even the most optimistic around us can truthfully say that Jamaica, present and future, is not in serious trouble. Still lacking is a vision based on thoroughly researched marketable potentials to guide a serious development plan which will positively identify broad-range commercial training and opportunities, such as small businesses to attract and facilitate especially the displaced public servants and young people. Such varied training and opportunities for small businesses among others, should be assisted by Government and international institutions. Viable small businesses have proven internationally to be an important plank in nation building. Taiwan is an excellent example of this fact.
'Assisted' does not only mean funding but the broad range of help and guidance required from basic accounting and sound business practices to identification of markets and marketing. There is no reason, for example, why between the government and the private sector, a selection of say active experienced retirees could not be brought together with the support of a small secretariat and a voluntary management board to consistently mentor a collection of small businesses as a pilot project to start with. A decided advantage of such viable businesses is the propensity for geographically dispersed locations, significant employment and a strong national commitment.
Still lacking is a properly structured and organised public administration geared to deliver the agreed national goals.
Jamaicans are a proud people and are challenged not only by the reality of their own circumstance but also by the fact of the country's comparatively poor standing in the region as indicated by a number of economic and social indices.
Apart from being recently named as the 'murder capital of the world' Jamaica has also been reported to be doing poorly on the international scene, in both its economic and social developmental efforts. As such, according to the World Bank, based on per capita income, Jamaica's ranking in the Caribbean is as follows:
PER CAPITA COUNTRIES
INCOME CATEGORY
High Bermuda, Netherlands Antilles,
Puerto Rico and the Virgin Islands
| Upper Middle | Barbados, Belize, Cayman Islands, |
| Dominica, French Guiana, |
| Grenada, Martinique, St. | Lucia, |
| St. Vincent and the Grenadines, |
| Trinidad & Tobago, the Bahamas |
Lower Middle Jamaica, Cuba, Guyana, Suriname
Low Haiti
The majority of Caribbean countries are not only currently better off than Jamaica and their citizens enjoy a much higher income than the average Jamaican, but in most surveys on corruption, Jamaica is rated quite low. In fact, in a 2005 report, Jamaica is rated 16th out of 18 countries in the region.
Jamaica's poor showing should in itself be
a motivation to do better in the interest of each and every Jamaican. So, we need now to look at a possible approach.
See Part II in tomorrow's Gleaner on possible steps to reduce the size of government.
Errol Hewitt is an information and communications technology planning consultant with the United Nations and the Commonwealth Secretariat.
