Aubyn Hill, Columnist
A poor country like Jamaica appears to have few options for growth and even fewer levers to pull. Rampant and crushing debt, perennially slow or no economic growth, a sliding currency and underperformance in securing revenues to the state coffers make for an extremely difficult economic and social set of circumstances and prospects. Still, the Government does have a few options.
We still do spend money. We still have an economic and social infrastructure to maintain and so we do have to exercise options. The person who offered herself as the best "option exerciser" and the one whom voting Jamaicans gave a landslide victory in a free and fair election is Portia Simpson Miller. As head of the winning party in the general election of a year ago, she assumed the post of prime minister. She is the person whom we have to hold responsible for exercising the major options Jamaica will follow.
In his investment seminars, Michael Lee-Chin gives the following as his main blueprint for successful investing: "I find a successful investor - like Warren Buffett - study his or her formula for success, ask the person to share his or her experiences, and copy the formula without changing it and execute diligently."
CAN'T WE ALL BE MORE LIKE SCANDINAVIANS?
Prime Minister Simpson Miller does not have to recreate the economic wheel. We went through that experiment in the 1970s and the country is still paying some of the cost of that escapade. She and her Cabinet need only study the recent rankings on the Global Competitiveness Report published by the World Economic Forum to see how the best countries perform.
Similarly, the Legatum Institute's prosperity index benchmarks 142 countries and assesses global wealth and well-being. "The US has dropped out of the top ten of the global prosperity rankings for the first time with the latest findings recording a weakening performance across five of the index's eight subcategories." A drop in the economy subindex has put the US at 20th place, way behind Eurozone countries such as Germany and Asia's leading economies.
Scandinavian countries lead the rankings. Norway is top for the overall prosperity index; Switzerland is number one for the economy subcategory; Denmark scored highest for entrepreneurship and opportunity; top spot for the governance subcategory goes to Switzerland; Luxembourg is ranked number one for health; Iceland ranks highest for safety and security; Canada has the highest score in the personal freedom sub-category, and Norway (again) takes the highest rank for social capital. Jamaica ranks 62 on the Global Prosperity Index in 2012 - down from 52 in 2009.
EDUCATION AND KNOWLEDGE ARE THE KEY FACTORS
As one studies the reports and data, education stands out as the main propeller of economic growth. Denmark, Norway, Sweden and the Netherlands all score high on this index. In the education subcategory New Zealand, Australia and Canada are the top three with Taiwan and the US making up the top five. But it is the Scandinavian countries which ensure that pervasive high-quality education is financed, monitored, evaluated and given to all students up to the high-school level.
Education is the highest denominator leveller - we in Jamaica use the lack of a broad-based high-quality education as a support factor for poverty. The political leaders of these countries are all committed to educating well their children and young adults and they bear the fruits of economic success.
There is a price for this excellent education product, sustained over a long period of time, and economic growth with great social benefits. The price is one of the highest tax regimes in the world. Wonderfully, this high tax, high social benefits, and excellent education is coupled with a set of the lowest corruption indices in the world. Taxpayers know that government officials use their money well and do not stuff their own bank accounts, or those of their families and friends with taxpayer's hard-earned cash.
PRIME MINISTER, GO RADICAL
While the Scandinavian countries lead the US on many of the sub-categories, the US still leads them in per capita income and, most importantly, as the best innovator, by far, in the world. In fact, the Scandinavian countries depend on US innovation which allows them to spend on education and other economic and social issues. This is also a practice Jamaica should copy.
I have heard talk encouraging the prime minister to form an economic subcommittee of Cabinet which would include Peter Phillips, Omar Davies, Phillip Paulwell and others. To quote another prime minister, "Forget it!" Who would be in charge? Who would be accountable? What economic deformity (camel) would this sub or super committee create?
I suggest the prime minister go radical. In any rearrangement of her Cabinet, she needs to create a Ministry of Knowledge Economy and let that minister be given the autonomy, authority and be accountable for driving economic growth.
The South Korean model will do - South Koreans already own a significant part of JPS. The finance ministry will remain and be responsible for fiscal and monetary affairs so the new minister could come from the Senate. Phillip Paulwell or Mark Golding may be good candidates - but that call is entirely the prerogative of the prime minister. The education ministry will have to be very focused with teachers being made more accountable by evaluation for the education product they produce, and parents will have to be made much more accountable and responsible for the behaviour of their children - under the law.
The new minister of Knowledge Economy and our prime minister could do well to copy the best from Scandinavian countries, South Korea, Singapore, Catalonia in Spain and the good old US. We need the Government of Jamaica to become extremely focused on the economic growth of the country and show that focus in its actions.
Aubyn Hill is the CEO of Corporate Strategies Limited and was an international banker for more than 25 years. firstname.lastname@example.org; facebook.com/Corporate.Strategies; twitter@HillAubyn