Robert Buddan
THE PERIOD April/May marks 55 years since Jamaica's first development budget. It was presented by Hugh Foot, then the new governor (1951-57). As we enter the parliamentary debate on the Budget on April 27, the issue of development remains central to our concerns. Foot had set the stage we have been challenged to follow ever since: how to
balance immediate relief with longer term reconstruction; building productive capacity; and financing development through what he called development
budgeting.
Norman Manley, leader of the minority party, called Foot's announced policies socialist, policies his party had been advocating for years. Indeed, Hugh Foot had socialist pedigree. He was associated with the British Labour Party and later became minister of state for foreign affairs under Harold Wilson's government in 1964. His brother, Michael Foot, became leader of that party in 1980.
SAME BELIEFS
Hugh Foot and Norman Manley believed in the same things that Jamaica was ready for self-government and that the state should have a major role in sponsoring development. Their alliance came to fuller fruition in 1955 when Manley became leader of the majority party after elections that year. Foot had set constitutional advancement in train as soon as he became
governor. This had led to more advanced constitutions in 1953 and 1959.
The changes in 1953 allowed elected members of the House of Representatives to form the majority on the Executive Council for the first time. This provided the executive authority for the development model the PNP had campaigned for and which Foot had partially
introduced in 1951.
The PNP was a strong advocate of state building through a central bank, a development bank, national planning institute, agricultural and industrial corporations and a ministerial system. Foot's policies provided the development corporations and ministerial government. The PNP created the others between 1955 and 1962. However, from the outset, the Foot-Manley administration recognised that an initial problem it faced was financing development. It was in this context that they thought development budgeting was of crucial importance.
FINANCING DEVELOPMENT
British support for Jamaica's development was virtually absent. An attempt to float a Jamaican bond in Britain in 1951/52 failed. The British government also declined to provide development funds that Foot had requested, saying that the colonial welfare and development funds were enough. They were far from that. There was hardly a Jamaican private sector to turn to. The whole point of the
agricultural and industrial
corporations was to seed local businesses in order to develop a private sector.
Attention turned to the United States. Both Donald Sangster in 1951 and Norman Manley in 1955 led delegations to the U.S. to seek American capital and promote investments in Jamaica. There was also talk of asking the new World Bank to do a study in Jamaica as a precursor to obtaining development funds. However, the World Bank was a new institution still consolidating itself and American investors were new to the prospects of the English-speaking Caribbean. There was no Caribbean Development Bank and no model of a successful small, developing (Caribbean) state to look to. Puerto Rico elicited some interest but its model was also unproven although Manley felt that its early promise
justified a role for the state in development.
Nonetheless, Jamaica did scrape together funds it had in emergency reserve, colonial development and welfare funds, money from a war fund, and new taxes to seed small manufacturing tinned goods, matches, soft drinks, cardboard, shoes, paint whatever it could. In addition, new investments in bauxite fortuitously provided foreign exchange, as did the success of Tate and Lyle sugar.
The state jump-started the economy through these sources of financing. Foreign investments and overseas development aid were important but Jamaica must take credit for its own efforts. Manley, Sangster, Noel Nethersole, and Foot led these efforts. In fact, the first comprehensive development programmes in Jamaica's history were the 1944 party manifestos of the JLP and PNP; and the first Ten-Year Development Plan by any government was presented in 1946, only after locals were elected to the new House of Representatives.
ADMINISTERING DEVELOPMENT
Financing and planning development was one thing. Having the ministries and the authority over them was even more critical. Colonialism did not provide Jamaica with the governing and administrative apparatus for development. Take these
examples. The department of agriculture was run by a colonial official who knew nothing about Jamaican agriculture. The local 'minister' could only report to the House on its work. A colonial department of commerce and industries existed, but no local 'minister' had been assigned to it.
There was a 'ministry' of finance. But Noel Nethersole complained that it had no power over the currency, no central bank through which to manage monetary policy, and no power to issue bank notes, impose
certain kinds of duties, or assess foreign property (owned by those who resided overseas and did nothing to develop it). This is why Manley (and Foot) felt that self-government and development had to go hand in hand.
They believed that a Jamaican minister must have the authority to manage the country's financial business, and Jamaicans like Harold Allan, Donald Sangster, Noel Nethersole, and Vernon Arnett had the ability to do so. In fact, it was under Nethersole, Jamaica's first real finance minister, that the country floated its first overseas bond and did so with great success, something the British had failed to achieve just a few years before.
ANTICIPATED STRENGTHENING
Furthermore, as far back as 1952, Nethersole had suggested that Jamaica might consider realigning its currency with the U.S. dollar because he anticipated the strengthening of the U.S. currency as a world currency
relative to the British pound. Jamaica did not have the power to do that, and when it did, almost 20 years had passed. Nethersole rightly argued that the Jamaican currency was being managed in the interest of the British treasury, which did not always coincide with that of Jamaica's. Political independence and financial independence had to go together.
The world is very different today than it was 55 years ago. There are many development institutions, development
models, and development funds around. Jamaica had none of these to draw from in the 1950s. We must continue, as much as we can, to find creative ways to develop our own sources of financing and institutions of administration. We have our own ministries now. We have development banks, a planning institute, numerous state agencies, a Ministry of Development, and the Ministry of Finance sits at the centre of the development process. Jamaica is now better equipped with the executive and administrative apparatus needed to sponsor further development.
The diaspora is a great new potential source of financing. Culture is a powerful industry to exploit for development. A central debate 55 years ago was about whether the state could manage its development role efficiently. The Jamaican state still has much to prove that it can. It needs proven institutional capacity in areas not yet well developed the social market, small and medium enterprise, and community development. As new challenges arise, as they do now, the state has to keep reinventing itself. Let us see what the Minister of Finance and the Government will do about all this in the Budget for 2006/7.
Robert Buddan is a lecturer in the department of Government at the University of the West Indies. You can send your comments to robert.buddan@uwimona.edu.jm
