EDITORIAL - Positive on growth
Last week's bumping up by the Statistical Institute of Jamaica (STATIN) of Jamaica's second-quarter growth figure, to 1.8 per cent, was good news. Not only does it represent the fourth consecutive quarter of expansion in output, the figure was more than half a percentage point better than the earlier projection of the Planning Institute of Jamaica.
But as positive a development as this may seem, it is not, for us, good enough. Or put another way, even with this level of growth, the Jamaican economy is still to return to the levels of the period before the global meltdown more than six years ago and is insufficient to make a substantial dent in the country's army of unemployed.
It would be perhaps useful, in the circumstances, to begin a new, broad, national conversation on growth, absent the narrow partisanship that usually attends such discussions. In this regard, it is an opportunity for the Opposition, several months after it launched its economic task force, headed by Aubyn Hill, to outline what it perceives to be the best strategy to drive expansion.
Significantly, growth in the review period was 0.4 percentage point more than the first quarter and was surprisingly led by a 6.3 per cent advance in the goods-producing sectors, including a 16.6 per cent growth in agriculture, and what would likely be counter to popular intuition, a 4.1 per cent expansion in manufacturing.
The agriculture number is understandable, reflecting continued recovery from hurricane damage and robust efforts to mitigate a recent drought. But what happened in manufacturing deserves serious attention and deeper review.
The output of sugar between April and June was nearly 120 per cent higher than the corresponding period last year. But there are also signs of increased activity on other types of factories.
If the latter perception holds true, it could well be the most tangible indication, if not vindication, of the efficacy of the policies being pursued by the Government under its economic support programme with the International Monetary Fund (IMF). Those policies have included a downsizing of Government and exchange-rate depreciation. The upshot is that without being artificially propped up, the Jamaican dollar has slid by more than 20 per cent in the past two years.
Jamaicans, in the circumstances, have been forced into a downward adjustment of their living standards. But a depreciated currency means more expensive imports, which ought to be good for domestic producers, which some of them, even if reluctantly, concede is increasingly the case. It is notable, though, that the opposition leader, Andrew Holness, and his finance spokesman, Audley Shaw, have been against the currency depreciation. It would, therefore, be useful if they weighed in on a strategy now in the context of the current numbers and the broader discussion on growth.
But whatever the efficacy of the current policies, the STATIN numbers provide no basis of celebratory chest-thumping by the Government. First, there is no insulation and the performance would be reversed by a few adverse developments. Moreover, what the Government has established is a broad framework, an erection of basic fundamentals.
What it has lacked is a champion for growth: someone who owns the agenda and who is out pounding the pavement, proselytising and geeing up confidence.
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