Christopher Zacca, president of the Private Sector Organisation of Jamaica (PSOJ), has urged the Government to come clean on the austerity measures to be imposed on the country should an agreement be reached with the International Monetary Fund (IMF).
"We are in the midst of a critical and necessary restructuring of our economy, which will most likely, in the short run, call on all sectors for further sacrifice; and unless we know what is happening, why it is happening and what role we each need to play, it is doomed to failure," said Zacca.
Zacca, who expressed confidence that Jamaica will have an IMF agreement based on Government statements and the PSOJ's own independent evaluation, said Government needs to achieve buy-in from the rest of the society.
Referring to a statement in a recent publication of the Jamaica Social Investment Fund, the PSOJ president said if people do not know what is expected of them, change is less likely to happen; that implementation of an agreement requires that the public and private sectors create a partnership, whereby the state relies heavily on private enterprises to put in place the changes.
"Draw on the minds and the abilities of leaders and professional managers in the private sector and also start outsourcing as many activities as possible to the private sector," Zacca said Wednesday, in a speech to the Rotary Club of Downtown Kingston.
At the same time, the PSOJ president said they were not sure about details of aspects of the IMF negotiations and, hence, had concerns that "stem from a lack of information rather than something specific that we do know".
He referred to last week's statement by Finance Minister Dr Peter Phillips that one of the high-level targets that form the essential outlines of the programme to be concluded with the IMF is that the ratio of debt to GDP would be brought down to 100 per cent.
"The PSOJ's concern is that the trajectory of this reduction is not too steep, thus creating too much austerity which completely strangles private sector-led economic activity and growth," Zacca said.
A good IMF agreement must balance the pace of debt reduction with growth creation, "a very difficult balance and one in which the private sector wants to play a part".
The Jamaican Government, despite appeals for information, has failed to fully articulate its plan on what happens after the IMF deal is sealed.
The administration of Prime Minister Portia Simpson Miller has given the country snippets about some major infrastructure projects and investments in tourism and information communication technology, Zacca acknowledged Wednesday.
"Don't get me wrong - these are great, but not enough. We want to hear more," he said.
According to Zacca, perhaps the single greatest reason why confidence is waning in Jamaica is not the uncertainty about an IMF agreement, but rather that "our people do not see the way forward after one".
The programme of fiscal consolidation - on which the administration is focusing for 2012-13 - "will fail to reduce our debt to sustainable levels unless it is accompanied very quickly by economic growth," he said.
"This reality is made even more daunting by the fact that, by itself, austerity runs counter to growth, and the key will be to replace reduced government spending with greater private investment and private business activities."
Such growth, said the PSOJ president, needs to be equitable. "It must reach small and large business, and must create jobs", be entrepreneurial at its core, and "cannot rely on a few large infrastructure projects alone," Zacca declared.
a revolution necessary
It will require the Government to demonstrate that Jamaica is 'incontrovertibly' a business-friendly country; the creation of an anti-corruption agency with powers to prosecute; and that bureaucracy is slashed, the PSOJ president said - recalling a remark he made recently to Industry, Investment and Commerce Minister Anthony Hylton, "that every government in my memory has come to office promising less red tape, and has left office with more".
"Unless there is a revolution in how the state facilitates business investment and business activities, both through legislation and through the public-sector processes, economic growth will continue to elude us," Zacca said.
However, he said he was encouraged by the willingness of the minister of finance to further discussions with the PSOJ-led Private Sector Working Group on tax reform.
Comprehensive tax reform - currently being considered by the Government as one plank of a new IMF agreement - is seen by the PSOJ as a critical part of creating an enabling business environment for equitable growth.
The PSOJ president said that growth in a time of austerity cannot rely only on the local market, which in the short run will have less money to spend and should also focus on exporting goods and services.
Tourism, call centres, business process outsourcing and logistics "are low-hanging fruits where we have proven out strengths and which have tremendous untapped potential and need to be further encouraged," Zacca said.
"Manufacturing, agriculture and agro-processing also have important roles to play in our economic rebirth, especially in how they can contribute to export."