Ministry of Knowledge Economy could be game-changer
The severity of our economic challenges gives our political, business and civic leaders a unique and real set of chances to grasp and implement radical economic solutions, and provide solid growth opportunities for our country. The economy has shrunk for 21 consecutive quarters and STATIN has just announced that official unemployment has worsened to 16.3 per cent. Cosmetic change, or no change, is a recipe for economic and social disaster.
For decades, no government has made economic growth the centrepiece of its governance mandate and we are now saddled with unsustainable debt, little or no economic growth, poor education, increasing unemployment, and pervasive and persistent poverty.
We need a new approach to growth, a new ministry, and an empowered and capable minister to pull together various facets of government and the private sector to nurture and drive economic growth.
A Ministry of Knowledge Economy (MKE - name not carved in stone) would send the right signal and shrink a large Cabinet. The MKE would wrap the portfolios of ministries of Energy and Mining, Industry, Investment and Commerce, Information and Communication and parts of Ministry of Finance which do not deal with fiscal, monetary and debt management into one ministry with a clear and disclosed growth agenda. The growth agenda must be driven by knowledge. This would be a fundamental change.
Jamaica does not have the land mass or population of a China, India, Brazil or even South Korea for that matter; nor does Singapore, Rwanda or Latvia. We, like Singapore, South Korea, Ghana and others, have smart people who can be trained to increase our productivity or sell their skills to other countries.
We must use knowledge to do to Jamaican poverty what the cell phone did for poor people in our country, India and elsewhere. The cell phone was created for rich people but allowed the poor to leapfrog a five- to seven-year landline waiting period for a telephone, to easy and affordable communication with whomever, whenever.
Building our economy on knowledge will force a redirection of the way we spend our J$78-billion education budget and we will treat our young people as our best assets, and performing teachers as great productivity agents. We must prepare our young people better to work locally and internationally.
Until we change our economy to a growth engine, do like India and Sri Lanka did in the 1970s and '80s: send our skilled citizens overseas to earn foreign exchange, ease the unemployment and crime problems, and return years later with valuable experience and cash to invest and spend.
The MKE would make sure our 19 permanent secretaries (far too many) would rearrange their ministries' spending to align with the stated and defined growth agenda and force the issue of efficiency. Transparency and flexibility, no doubt, would be opposed by entrenched interests, but would be key allies of the MKE.
Our two main CARIFORUM partners and competitors - the Dominican Republic (DR) and Trinidad and Tobago - have carved out their economic spaces. The DR has trained its economic focus on agriculture to feed its population (11.5 per cent of GDP); industry, which is 21 per cent of GDP; and tourism, which is by far the biggest single sector in the economy. With other services, it creates 67.5 per cent of the GDP of the second-largest economy in the Caribbean.
Trinidad and Tobago, based on its oil and gas reserves, left agriculture and tourism behind and has found its economic niche in manufacturing.
DON'T RECREATE THIS ECONOMIC WHEEL
Jamaica needs to create its economic prosperity based on a knowledge economy. We do not need to recreate this economic wheel. There are already excellent examples to follow.
In 2008, President Lee Myung-bak, soon after he assumed office (Mrs Simpson Miller may have waited too long), decided to merge the Ministry of Commerce, Industry and Energy with elements of the Ministry of Information and Communications, the Ministry of Science and Technology, and the Ministry of Finance and Economy to form an enhanced government instrument called the Ministry of Knowledge Economy (MKE).
President Lee was elected with a clear national mandate (as was the People's National Party and its leader) to invigorate the South Korean economy. He created the economic scalpel - the Ministry of Knowledge Economy - to help fulfil his election economic priorities and meet the challenges of the 21st century.
The thinking in South Korea is that in a knowledge economy, the highest priority is placed on knowledge creation. Jamaica is certainly not South Korea, but we can pick this example from them. If Haitians wanted to build a super football club, they would likely use Manchester United in Britain or Santos in Brazil as their model.
The MKE is responsible for fostering traditional industrial structures, as well as developing new competitive, innovative and profitable growth engines. Knowledge will be the primary engine of productivity and growth in the Korean economy and is the core of the economic model of the MKE and the government. It is a quite different economic model than the traditional one which depends on natural resources or manpower.
The Spanish state of Catalonia in 2010 changed the Ministry of Finance and created the Ministry of Economy and Knowledge. In a similar construct as that in South Korea, Catalonia pulled the resources of its 12 public and private universities, 157 university facilities and schools and its approximately 70 research centres, public and private, into a formidable Catalan Agreement on Research and Innovation which was signed by a broad political and social consensus.
The agreement placed research and innovation as the strategic priorities of Catalonia. Educating the Jamaican people very well needs to be our first step. The Ministry of Knowledge Economy, as does the MKE in South Korea, would have a strong symbiotic and synergistic relationship with the Ministry of Education.
Think of what could happen to our enduring and pervasive economic problems if the prime minister were to establish a Ministry of Knowledge Economy, appoint a clear economic manager as minister and charge him or her to work very closely with the Ministry of Finance - now focused on fiscal and budget issues and, with the central bank, monetary policy - the ministries of Education, Labour and Agriculture and other ministries as relevant, in order to infuse our population with knowledge and use these 'knowledge workers' to create growth.
KNOWLEDGE WORKERS AND CAN-DO LEADERSHIP
How would this happen? Better-trained, smart young people, with some assistance, will find current economic needs, locally and overseas, to fill at a profit.
Also, like Costa Rica, our properly trained and cutting-edge university graduates - a lot more with science and math degrees - will attract foreign direct investments (FDI) to Jamaica. Costa Rica made the decision to educate its young people really well and now has a 94.9 per cent literacy rate. They are seriously literate.
Companies such as Intel and GlaxoSmithKline beat an investment path to Costa Rica. Indeed, in 2006, Intel's microprocessor facility alone was responsible for 20 per cent of Costa Rican exports and 4.9 per cent of its GDP.
In order for this economic driver to be successful, the prime minister must choose well. The minister needs to be a person who has her full political and management backing. (S)he must be far-sighted, experienced in business, with a diamond-hard pragmatism, and Mrs Simpson Miller will have to give her or him political room to manoeuvre and perform, especially when the envious, cynical or malicious try to undermine this key minister.
This minister of the MKE should focus on very few key growth engines. Education, energy - fossil-based and renewables - agro-processing, and converting by privatisation, or similar means, the huge loss-making port in Kingston into a profitable enterprise should all be in the new minister's economic cross hairs. The port is a real burden on taxpayers. A tight, agreed and public timeline to reduce our US$2.5 billion annual spend on oil imports would have to be an initial and major objective.
The MKE minister would spend a lot of time making it much easier to do business in Jamaica and secure FDI to expand our education, energy and other industries. International assistance would be sought for these growth engines and to make our government more efficient.
The education industry would start with strong basic and primary schools and all our university graduates will be stamped 'Fit for Export' for local and international markets. Our educational courses - for nurses, actuaries, teachers, scientists - would be offered regionally and internationally, and private investors would be encouraged to invest in this sector.
Prime Minister Simpson Miller, with just one major and some subsidiary economic changes, could convert our history of bad politics and desperate economics, largely a politics of poverty, into one where she governs over a Jamaican economic recovery and sustained growth.
In this, she could distinguish herself significantly from all her predecessors.
Aubyn Hill is CEO of Corporate Strategies Ltd and was an international banker for more than 25 years. Email feedback to email@example.com and firstname.lastname@example.org, tweet @HillAubyn, or post to Facebook.com/Corporate.Strategies.