Tue | Oct 23, 2018

EDITORIAL - Modernise the JMA

Published:Wednesday | August 13, 2014 | 12:00 AM

Recently, when Brian Pengelley began his fourth, and what he said would be his final, term as president of the Jamaica Manufacturers' Association (JMA), we urged him to make it count.

We are reminded by that bit of advice in the face of the response by Mr Pengelley, and others in the JMA, to Dr Damien King's less-than-flattering assessment of the macroeconomic efficacy of the association's lobbying for policy in its favour. Much of it is ad hominem attacks on Dr King, who teaches economics at the University of the West Indies (UWI) and is a highly respected academic.

The burden of Dr King's argument in a column published in this newspaper is that much of what has been asked for by the JMA, such as special access to foreign exchange, the banning of competing imports, exemption from taxes, and preferential interest rates, are market- distorting measures, providing a bias towards would-be privileged manufacturers against the rest of the economy.

Said Dr King: "Every time the manufacturers get an exemption from the general cost and conditions of doing business, the effect is that the costs and conditions for businesses in other sectors get worse. The other businesses pay for the manufacturers' privilege."

Unfortunately, the retort of Mr Pengelley and his colleagues does not offer a serious assault on the logic of Dr King's argument, but largely the raising of questions about his personal and specific contribution to the creation of employment and economic growth, and, specifically, in the case of Mr Pengelley, to imply that his views are incongruous with his seat on the board of, and shareholding in, a manufacturing company. Supposedly, he should vacate the seat and dump the shares.

This brings us back to our July 4 suggestion to Mr Pengelley in which we highlighted some of the positive impacts of manufacturing, such as the taxes it pays and the jobs it creates, which were repeated by Mr Pengelley. But we argued that such recitations were an insufficient foundation for economic policy.

We said: "It is not that Mr Pengelley, or those who came before him, have not spoken loudly or often and with passion about the value of manufacturing. But they have done so in a fashion that bears more emotion and anecdote rather than empirical data, rigorously analysed and clearly and persuasively presented."

In this, we have a sense of déjà vu.

In that regard, as we suggested in our previous comments, Mr Pengelley should apply his final stint as president of the JMA to building the organisation into one "capable of producing the kind of policy work worthy of the sector it serves". Maybe Dr King's prescription is wrong, but that can't be proven by an appeal to emotion. In other words, we expect from the JMA hard, cold, cost-benefit economic analyses, including the cost/value of trade-offs.

If the JMA is incapable of that kind of work, it should perhaps merge with the equally limping Jamaica Exporters' Association and perhaps the Private Sector Organisation of Jamaica in search of the research and intellectual heft required for shaping policy that must stand the robust review in a seamless global marketplace not only of ideas, but also of goods and services. And that, substantially, underpins the ongoing reforms in the Jamaican economy.

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