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Stabroek News

Dialogue on the economy
published: Sunday | April 22, 2007

Robert Buddan

Gordon 'Butch' Stewart used the recent occasion of the Observer Business Awards to say that Government must have more dialogue with the Opposition and the private sector. Mr. Stewart went on to say that Jamaica needed a business-friendly environment. His points raise some issues about the role of dialogue in our democracy and on our economy.

One of the aspects of the Westminster form of democracy that the new approach to governance is trying to get away from is to see parliamentary government as between government and opposition alone.

The rise of civil society requires that dialogue include those organisations that represent different aspects of society. This includes trade unions, environmental groups, human rights, community and other stakeholders in the particular policy areas on which dialogue is being held.

Democracy is now conceived more broadly than party democracy and even bipartisanship is no longer the ultimate end of consensus politics, only a part of it. Political parties still have leading roles becausethey are the only organisations elected by the nation to make law and policy. But parliamentary parties can no longer claim a monopoly over the process. Parliamentary sub-committees regularly hear the views of diverse stakeholders in making legislation.

The other aspect of democracy that is being transcended is capitalist democracy. Just as parties can no longer claim sole legitimacy in the policy-making process, business can no longer claim any special right over economic polic they have a direct interest in it.

Again, the rise of civil society means that other interests have rights to be protected. For example, the environment has to be protected from economic exploitation and the recently announced environmental levy is designed to do this. The rights of workers and communities and their organisations must therefore be included in dialogue.

Dialogue and Partnerships

Partnerships with stakeholders have actually been a hallmark of Jamaican governance since the 1990s. The essential idea has been that this is the best democratic way to create a business and socially friendly environment for governance from all sectors. The World Bank's view is that governments must create a business-friendly environment. My view is that business must also create a business-friendly and socially friendly environment. This must be the essence of partnership.

Government and public sector workers have created a historic partnership in the form of the MoU, which continues to survive and improve. It has helped to create more stability for the provision of public sector services because of predictable public sector salaries, and these are essential to a business-friendly and a labour-friendly environment.

Sometime ago the private sector was asked to follow suit by establishing a partnership through what was dubbed as the 'partnership for progress'. A process had started which included political representatives from both parties. The private sector, as the public sector, must come to a consensus about what it wants before it can go into a dialogue with other sectors.

Consensus and Partnerships

Public sector workers can put aside the political affiliations of their unions to make a partnership. We do not know why the partnership for progress has failed to materialise. We do know that the private sector itself does not have a consensus to go forward with. We are not sure who exactly its spokespersons speak for.

There was some acrimony during the last Private Sector Organisation of Jamaica (PSOJ) election over vision and modernisation.

The Jamaica Manufacturers Association (JMA) and Jamaica Agricultural Society (JAS) do not see eye to eye with the PSOJ over bank interest rates and how to get them down. Government and Opposition already agree that those rates are too high. The PSOJ and the JMA did not seem to have agreed with each other over the Customs User Fee. The PSOJ's response to the budget does not share the views of the business and consumer surveys of the Jamaica Chamber of Commerce that consumer and business confidence are at their highest levels.

The PSOJ does not agree with the IMF that the economy is expected to grow by three per cent in the coming year. There is no consensus in the private sector either on how to regulate campaign finance.

There is little consensus within the private sector and its dialogue must begin there. The making of a partnership for progress is entirely in the hands of the private sector. It must agree on a vision and then come to a broader dialogue with that vision. There is little basis for agreeing with Mr. Stewart that policies are not business-friendly since the JCC's surveys show high levels of optimism about economic prospects. Besides, Mr. Stewart's success is itself testimony to quite friendly policies in tourism, Air Jamaica, the media, and whatever other concerns he has enjoyed.

A New Partnership for Progress

Mr. Stewart's statements presume that there is more consensus in the private sector than there actually is. This suggests that the efforts towards a new partnership for progress should be rekindled toestablish a real consensus. But canvassing the views of the private sector must be undertaken to include the small and medium enterprise sector and the informal entrepreneurs to bring them intothat consensus. The partnership cannot be a consensus of the business elite. Government should, in fact, insist that dialogue must be democratic and representative of SMEs. The private sector cannot be thought of as the leadership of the PSOJ, the JCC and Mr. Stewart.

Furthermore, the private sector cannot use dialogue to demand and set conditions without accepting responsibility for its own role.

Governance, by definition is about partnership, and partnership cannot be a strategy for demanding responsibility without accountability. It is evident to me that the business community, the government, the opposition, and the society agree on certain things in principle and the next step should be a dialogue on how to implement them. But each partner must accept that it has a responsibility to play to meet targets.

An agenda should therefore consider, (i) A suitable approach to the Customs User Fee, (ii) Making tax compliance effective to realise annual revenue targets, (iii) Speedy consolidation of tax deductions, (iv) Getting small and medium enterprises to maximise benefits from growing investments, (v) Formalising the economy by bringing informal entrepreneurs into the accountable economy.

A short and focused agenda for the year is manageable. Mind you, it is an election year and the private sector, or those who speak for it, might be waiting for a new government to partner with. The government in power meantime, has set the above tasks for itself. It cannot wait on others who are on election watch. The business of managing the economy must go on. Government can, as it has, invited the society into a partnership. Having made the call it must work with those who come forward.

Audley Shaw has listed five points on behalf of the JLP as (i) debt management, (ii) investment promotion, (iii) reduced bureaucracy (iv) energy policy and (v) tax reform. It seems that there is much that is compatible with government's thinking and further dialogue could refine and accommodate these ideas. It is up to the private sector to conclude its partnership and contribute to a business and socially friendly environment.

Robert Buddan lectures in the Department of Government, Mona, UWI. Email:

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