Critical variables for job creation

Below are excerpts from a speech delivered at Cari-Med's 25th anniversary workers' appreciation awards ceremony on Saturday by Senator Dr Christopher Tufton, opposition spokesperson on foreign affairs, foreign trade and investment.

THE RECENT pronouncements by the prime minister (PM) of Jamaica, requesting the private sector to hire at least one qualified Jamaican worker, as part of the Government's efforts to create jobs, again demonstrates that the People's National Party government is still in search mode for a solution to joblessness in our society.

Mrs Simpson Miller's pronouncements on this occasion cannot escape greater scrutiny from the Jamaican people. The stark reality is that the honourable PM, no longer has the protection of the opposition benches to talk, without having to take responsibility to explain fully and clearly and to act on her government's pronouncements. So the day of reckoning is here.

How sustainable is JEEP and Jamaica Employ?

Before "Jamaica Employ" as she termed her job creation pitch this past week, the prime minister, then Opposition leader was announcing the JEEP, or Jamaica Emergency Employment Programme. Interestingly, JEEP was grounded in a state-driven job creation thrust, while in this case, the new initiative call Jamaica Employ is asking of the private sector to hire at least one worker, driven more by altruistic considerations and not necessarily based on the firm's needs. How sustainable is that, many investors would ask, and they would have a valid point, if they do.

A real need for jobs

Let me be the first to say that in today's Jamaica we should all appreciate the impatience of any government to get the economy moving and its citizens benefiting from expanded economic activity. The prime minister is impatient for progress in this area and as a former minister with responsibility for investment generation, I can fully relate to that feeling.

With elections over, time for the details. But the days of catchy phrases and clichés ended with the election campaign and JEEP and Jamaica Employ will soon ring hollow to Jamaicans who have to confront a tight economy, even with the progress our government made since 2007, and voted to support a change of government based on a promise to "balancing the books while balancing people's lives" or better yet, "putting people first".

Having received a mandate from the people on December 29, 2011, the Government must move quickly to reconcile, for the benefit of the Jamaican people, both labour and capital alike, what are the fundamentals of our economic situation, in the global context that we have had to exist, and what is their road map to achieve the happiness, welfare and well-being of the people who gave them that mandate.

In this regard, the Government must reconcile wishful thinking with the fundamentals of economic management.

Immediate Investor Confidence Needed

Ultimately, it is how investors analyse and interpret the fundamentals in the marketplace that will determine if they will risk business activity expansion that will ultimately create the jobs that are necessary to reduce unemployment. The prime minister is well entitled to use her gift of gab for moral suasion to encourage action, but that strategy is limited and over time unsustainable if not supported by sound and demonstrable programmes supported by efficient economic management.

We will be a responsible Opposition. The Opposition wants to be responsible about its role as we have no interest in returning our country to the days of economic instability; of high inflation and interest rates, and a volatile exchange rate. We have no interest in seeing crime levels spiral out of control as was the case leading up to 2007. We know that the investment community will be motivated by the signals we send and how we proceed on those critical variables.

So we say to the prime minister and her Government, we have conceded that the people of Jamaica have spoken, let's now talk about the fundamentals to make the economy work and to encourage investors to invest for job creation and economic activity.

Avoid investor flight at all costs

The opposition leader gave some unsolicited and apparently not accepted advice to the PNP administration during the opening of Parliament. He spoke about the need for the Government not to abandon the macroeconomic stability that we have been able to achieve. It is fragile and any wrong signals to suggest that interest rates, exchange rates and inflation may be becoming unstable again would send investors packing and running to safer grounds. Our country cannot afford this at all.

Unlike the rhetoric during the election campaign, the Government must now realise that there are very few if any option alternatives by way of policy direction. Don't interpret your mandate as a justification to return to what existed prior to 2007. The people may not have believed us on December 29, 2011, but the policy options remain very few.

Setting priorities

The IMF: So they must proceed apace to concluding the IMF negotiations. These are not easy discussions, but necessary to send a signal of continuity to the investment community.

Tax, pension, public-sector reforms: The Government must signal its intention to complete quickly the many reforms that were being pursued by the former administration. Key to these is tax, pension and public-sector reform.

Bureaucracy in business: There are a number of initiatives that are already on the way to improve the business climate and these must be priority for the Government as part of the efforts to get businesses investing again. For example, government has to be strengthened to ensure that agencies can communicate to ensure businesses can get started and function without long delays. We are well on the way to creating a superform for business registration and have improved the one-stop concept housed in JAMPRO for exporters. These initiatives must be completed and further strengthened.

These are already a work in progress and will have a tangible bearing on investor competitiveness and confidence, critical variables for job creation.