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'Why we are poor'

Published:Sunday | November 25, 2012 | 12:00 AM
Dr Damien King, head of the Department of Economics, UWI, Mona. - File

Jamaica is poor because successive administrations outdo the other in redistributing ever dwindling state resources, economist Dr Damien King charged in a public lecture on Thursday. The politics of handouts, or pandering as King called it, will only make Jamaicans poorer, he said.

"What is the economic and fiscal consequence of a competition among politicians to redistribute? Well, its fiscal deficit," said King, the head of the Department of Economics at UWI as well as co-executive director of think tank CaPRI.

"Redistribution is costly, JEEP is costly and there are many examples when the Jamaica Labour Party was in power," he said, addressing some 60 students and staff at the Undercroft of the Mona campus, University of West Indies (UWI). His lecture was titled 'Why we are Poor'.

The Jamaica Emergency Employment Programme (JEEP) is a short-term work programme initiated by the Simpson Miller administration this year. It formed a central plank of the governing People's National Party platform for the December 2011 national elections.

The promise of employment would be financed in part by utilising resources from the then JLP administration's major road rehabilitation project. But the JLP in criticising JEEP in April reportedly said that it, too, would have had its own short-term work programme.

"It really is a vicious cycle where inequality produces bad politics and bad politics maintains things unequal as they are," King said, adding that breaking-out of the mould required stand-out leadership.

'Pandering to the poor'

He was sceptical, however, that such a leader would emerge from within the current political culture.

"This is not a story," he said of Jamaica, injecting what seemed to be a note of cynicism. "There does not have to be redemption in the end."

King said that "pandering to the poor" addresses isolated needs rather than increase economic opportunity for Jamaicans. Pandering generally results in taxation for the middle and upper classes, he said.

King then philosophised that policies are most balanced in a stratified society in which the poor, middle-class and rich are equally divided into thirds. In such a theoretical society, policies solely affecting one group positively would be rejected by the other two groups.

However, in Jamaica the poor constitutes a larger portion of the electorate than the middle-class or rich and thus policies are geared towards the marginalised. Contrastingly, in the United States policies are geared towards growing the middle-class rather than redistribution, he said.

"We have a small middle class," King said. "The word middle class dominates the electoral conversation in the US. In Jamaica, the word that dominates the electoral conversation is the poor — and not in a constructive way."

The engineering of Jamaica's "vast inequality" began during slavery in which a small elite violently ruled a large poor mass.

"Geography and economics implied that big sugar plantations [would] create vast inequality of wealth and power, requiring control of the masses by violent repression," he said.

But that inequality was most stark in Jamaica when compared with other Anglophone Caribbean islands. Consequently following universal adult Suffrage in 1944, politicians needed to "pander'' to this large poor class, he said.

"Before 1944 all you had to do is bash them in the head. After 1944, you had to get them to like you," he said of Jamaican voters. "And that comes out in the politics today."

Jamaica found economic growth in the first decade of its independence but faltered in the subsequent decades. King highlighted instances of pandering
since the 1970s from both political parties.

country grew rapidly in the 60s. At the end of the 60s the PNP came to
power on a platform of 'Better Must Come' because the rapid growth did
not address the inequality. The JLP in the late 1970s campaigned as
being the antidote to the 'communist' Michael Manely running the
country. The JLP came to power in the 80s and did not change a single
economic policy implemented by the PNP - they did not remove exchange
controls; they did not open the economy," he

"So, notwithstanding the rhetoric and the
opportunism of the campaigns, we have a consistency throughout the
different phases of our economic history or what we call the economic
regimes. There is an underlined consistency of approaching the economy
in only one way."

The World Bank
currently classifies Jamaica as an upper middle income country with a
2.7 million population and per capita income of