'Everything Crash'

Published: Sunday | December 13, 2009

Lambert Brown

No, I am not writing about the debate as to whether Jamaica is a failed, failing, or rogue state; neither am I writing about 'state capture'. You would also be wrong if you thought I was referring to the collapsing Budget, where government revenue and grants are approximately $18 billion under budget, with another $35 billion owing to suppliers.

Am I writing about what Information Minister Daryl Vaz characterised as a "final finality" of the International Monetary Fund negotiations? No, the dire hardships that such an agreement will mean for the masses of Jamaicans will soon be revealed. If you ask whether I am writing about the record number of murders, escalating crime and corruption, you would be off track.

Everything Crash is the name of a song (by the Ethiopians) which succinctly addressed the discontent existing in the Jamaican society towards the end of our first decade of Independence. Today, our country is faced with the siren call to "renew the private sector for a renewed Jamaica". I am forced to ask: Which private sector and which renewed Jamaica?

Let there be no doubt about it. Jamaica needs a vibrant and active private sector which plays a crucial role in growing our economy and advancing national development. This must be a private sector that is willing to make its profit, conscious of the national good, driven by competition and creativity, and willing to share the sacrifice of nation building.

Contribution less than stellar

There are some who feel that our local private sector has not lived up to the role outlined above, and that avarice and blaming others have become the defining characteristics of that segment of our society. Yes, there is indeed some amount of philanthropy, but overall, the contribution to our country by big businesses is less than stellar. The current spread in interest rates, between what is paid for savings and other depositors' accounts in our banks and the rates the banks lend at, is holding back production, employment and the development of the country. Should the people put the renewal of Jamaica in these hands?

Take the case of the private sector bigwig who was sold 287 acres of seafront lands by the Government for a measly $6 million in order to facilitate hotel development. Did he use his own money to make the development, having got national assets so cheap? No, it was essentially the Government that had to borrow money to buy back a piece of the land sold to him and build a hotel, at great expense to taxpayers. Guess who sued the Government for losses incurred on that hotel project? You guessed right if you said the private-sector guy. Should the people put the renewal of Jamaica in these hands? These current examples are not isolated extremes of our private sector. Neither am I putting them forward as a blanket condemnation of the private sector. What is needed in Jamaica is the recognition that all stakeholders have to contribute and make sacrifices for our country to survive and grow to the benefit of all segments of society. To a large section of our population the feeling is that the burden is being borne by them while a minority enjoys the fruits of the national labour.

It was Edward Seaga who, in 1961 in his famous "haves and have-nots" speech, best described the inequalities existing then, despite the economic boom and high GDP growth of the 1950s. In essence, the masses of our people did not benefit from all the GDP growth; the gap between the rich and poor widened. The same thing happened in the 1960s when, according to many, Jamaica enjoyed the greatest period of economic growth. During the period 1962 to 1972, unemployment grew by 50 per cent, from 12 per cent to 18 per cent of the labour force. This was a period of private-sector ascendancy in Jamaica.

Conspicuous consumption

During the 1970s, our private sector perceived the advent of communism. Some members of the sector took up their marbles and abandoned the country. Five flights a day was not only a line from a popular song but a reliable route to Kingston 21, as Miami became known. Those members of the private sector who remained were given a lot of incentives to produce and grow. Wage guidelines were imposed to suppress workers' wages artificially and to boost the earnings of employers. Did that lead to significant investment in the economy by the private sector? No, but it did lead to conspicuous consumption.

It was the State that had to play a leading role in keeping the country going forward. The National Housing Trust was the saviour where many private housing developers absconded with working people's deposits in their housing developments.

In the 1980s, our GDP growth was again driven by foreign-direct investment. The tremendous effort by then Prime Minister Seaga to have Jamaica and other Caribbean countries granted one-way free trade into the USA through the Caribbean Basin Initiative was wasted by our private sector. Instead of responding to the opportunities for development, we spent the time clamouring for NAFTA parity. Then, when we got the NAFTA parity we declared it was too late. So, at the end of the 1980s, the people were still left out of the growth equation.

History records that 18 years in the political wilderness was the price paid for a 'free-up-the-private-sector-and-watch-Jamaica-grow' policy. During those 18 years, GDP growth was anaemic many would say, but the lives of the people did advance. Poverty was brought down to an all-time low. So, too, were inflation and unemployment. Unprecedented infrastructure development has taken place all over Jamaica. Construction of houses, hotels and offices has led to the growth in demand for cement, electricity and other utilities.

In all of this, the private sector played a positive role, but without the catalytic role of Government and foreign-direct investment this progress would not have been possible. There is no need for a private-sector capture of the Government. Good management exists in both the public and private sector and that is what Jamaica needs lest 'Everything Crash' again.

Lambert Brown is president of the University and Allied Workers' Union and can be contacted at Labpoyh@yahoo.com.

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