Friday, July 22, 2011

Development can only occur if there is law and order

WHENEVER we discuss the various models for development (Ireland, Singapore, and Russia), we tend to focus on economic stability, interest rates, stock exchanges etc. We always speak about economics as if it is an exact science, not realising that economics, as a social science, depends on human behaviour. Perhaps more important than interest and exchange rates is consumer confidence. After all, economic development is driven by consumer demand and markets, not macroeconomic stability or low inflation.

For this reason one can always predict whether an economy is going to do well or not, because unless consumer confidence and spending is on the rise then an economy cannot develop. We only have to look at the largest economies in the world, led by the US and China. It is the rise in consumer spending and confidence that has allowed those markets to develop, not a few technocrats sitting in a room determining how to achieve stable exchange rates, low interest rates, and low inflation. In fact, a focus on macroeconomic stability, without developing consumer confidence, is only a short-term fix, and will lead to what we have seen for the most part in Jamaica — spurts of growth followed by longer periods of slump.

It would seem logical, therefore, that if we want a market to show innovation and develop, then we must encourage consumer confidence and spending. This means that market policy should always focus on more jobs, greater real income levels, and greater competition. There is justification for why the Caribbean GDP growth (less Trinidad) rate lags behind the rest of the world, as our markets are less developed. In particular, there is a reason why 2007 real GDP per capita and productivity in Jamaica was less than in 1972. The problem is that as a country we have for the most part focused on the outcome rather than the underlying problem, which our governors have failed to properly understand.

If, therefore, market development depends on consumer confidence and spending, then it's logical that we should pursue policies that will ensure consumers feel confident and have enough money to drive higher expenditures. And if this is accepted as the logical thing to do, shouldn't we then be identifying what is needed to drive that behaviour (remember economics is a social science)? The next logical set of questions then would include, how we expect consumers (or businesses) to feel confident about spending if there is rampant indiscipline and a general lack of law and order, and our institutions such as our courts and police force seem deficient. Even if the institutions are not deficient, a perception that they are is enough to stymie confidence.

For example, the way the police handled the Mais killing is an example of how not to communicate (even though, in my opinion, it was handled properly). The argument that social media is an inhibitor to policing and that ways must be found to curtail the use of social media is showing a bankruptcy of ideas. Shortly after hearing this comment locally, I heard an international report where it was being said by the police that with the growth of social media, the police now had to find more innovative methods to work alongside the new order, not to say it should be limited as we chose to do.

When will we realise also that the first thing to do in solving crime is to create a culture of discipline and law and order, as was done in Singapore? So if we truly want to see a sustained reduction in murders and other crimes then we must first address the general perception of law, order, and discipline. If this is not done then we may not see a sustained reduction. We only have to look at the recent killings. And it is this breakdown of law, order, and discipline that has been the biggest failure of governance in this country since the 1970s, which deteriorated at a much more rapid rate in the 1990s and 2000s.

So neither pedestrians, cyclists, nor motorists are safe on the road from reckless drivers. Only last week a cyclist was riding out at the Harbour View roundabout, for his morning exercise, and was mowed down by a speeding motorist, leaving a wife and a 15-month-old son. When that driver leaves prison he should be forced to support the child until age 18. But will that ever happen in Jamaica? More than likely not. And what about the persons who continuously ignore the Noise Abatement Act, and prevent persons from getting the rest they need to be productive the following day? I also continuously see cases where taxis stop in the middle of the road to let out someone, and a police car just drives past as if it is nothing.

It is not enough for the police to just set up a speed trap and expect to solve traffic violations that way. There needs to be more out-of-the-box thinking. For example, why aren't the police seizing the equipment and gate proceeds from persons who violate the Noise Abatement Act (which this Act already supports indiscipline as crafted)? Why don't they wait outside of clubs and parties to see who is staggering to the driver's seat and administer a breathalyser test on the spot? This would also certainly improve the revenue intake.

If one looks at the development of the US, Singapore, and Ireland (countries we love to look at as models), they have been based on a culture of discipline and the enforcement of law and order, that rewards productivity rather than in our case where we reward connections and strength. So in Jamaica we don't know how many Usain Bolts or Bob Marleys we could have produced because we either kill them when they are young or never allow them the opportunity to develop.

So, as I have always maintained, in no economics book I have read is there an assumption of the lack of law and order. On the contrary, economic development assumes a certain structure and culture of discipline. The Global Competitiveness report, for example, points out that before development can occur in a country, the institutions have to be functioning properly and there has to be access to good health care and primary education. Otherwise, any effort at development is only a lesson in futility.

So as we approach 50 years of independence as a country we need to understand that without discipline on our roads and an enforcement of law and order, we will never get around to achieving sustainable economic development, let alone get to being the country of choice to live and work. All we will do is create one big ghetto called Jamaica.

PS: I want to commend the direction being taken by the new minister of justice of focusing on the courts and backlog of cases, which the DPP has been saying for a while is a reason for the poor delivery of justice. I also want to commend the minister of national security for the introduction of the electronic monitoring for non-violent offenders, as all our prisons have done is create more hardened criminals.


Jimmy said...

True, but law is never taking the first place in my charts. Current laws are made for the ease of the rich, not for enforcing order. And since the rich people control the politicians, how are the laws supposed to change for good? I think they can't.

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