Friday, September 02, 2011

A practical approach to Jamaica's challenges

One of the questions that I get a lot when discussing how to solve Jamaica's challenges is, if we all know the answers then why can't we solve the problems? This is a very important question, as it focuses attention on the real issue that Jamaica faces in resolving the challenges before us. It is no different from the challenge faced by companies, and why some companies, with an apparently similar business model, succeed while others don't.

After all, Jamaica, of all Caribbean countries (with the exception of Guyana, which is not really in the Caribbean) has the most diverse mix of natural resources and opportunities available. Even though Trinidad may have oil, we have tourism, bauxite, agricultural products, sports, and music. Our music and sports are probably our greatest assets because of the future value created in the brand of which we have not even scratched the surface.

Why, then, in rankings such as the Human Development Index are we only ahead of Haiti, and even in the growth projections put out by the World Bank, why do we fall behind Haiti? The solutions put forward in political campaigns and commentaries seem logical, so why can't we resolve the challenges we face and become the country we can be? The answer I believe, lies in my mind in the way we approach our challenges. Quite simply put, we get too involved with the emotions of the challenge rather than what is the most practical long-term solution.

Some examples include the following:

o The argument made by some, including myself, to (i) widen the tax base; (ii) reduce the rate of GCT; and (iii) target the tax to be received on previously zero-rated items to the less fortunate, has been shot down as oppressive and not caring for the poor. This is an entirely emotional response for the following reason : if tax foregone on cornmeal was say $100 and if 50% of cornmeal is bought by the rich to feed their dogs, then it means that $50 of the tax benefit goes to the rich man and his dog. Wouldn't it be better to charge the $100 tax on the cornmeal and use $75 to target funds paid directly to the poor? Everyone wins as the poor would get $75 (instead of $50 tax credit); and the government would get $25 tax (instead of the $0 before). And the rich man pays the $50 if he still wants to feed cornmeal to his dog.

o The recent demonstration against JPS (by wearing black or turning off electricity for a day) was really impractical. So what happened after the demonstration? Did the bill go down? It has come to this because the OUR is a useless organisation and also government policy over the years has procrastinated too long on this very important issue of energy. But the more practical thing to do is to wean ourselves individually off JPS power. I always find it amazing how persons find it easier to argue that borrowing the money to purchase a car (loans have gone up) is more acceptable than borrowing money to add renewable energy solutions to their homes. The argument is always that the cost of the system is too high. But if you think about it, if one can get a loan (say from NHT or the bank) to invest in a solar system, and the monthly payment on the loan is less than the savings on the JPS bill, doesn't it make practical sense?

o Another impractical call is that GCT on electricity should be removed as it is oppressive to the poor, when in fact most poor persons do not consume the 200 KWH where GCT starts to accrue. Apart from the fact that the low- income earners do not pay GCT on bills it would be much more practical to call on the government to maintain the GCT on the 30 per cent who pay it and that it should be "ring-fenced" and given as a credit to compliant taxpayers who invest in renewable energy solutions. This way consumers would not only avoid GCT but would also reduce their JPS consumption.

o The final thing I want to mention is the emotional response to relatively higher salaries paid to public sector workers, which started with the "Fat Cat Scandal" and which continues today. At the same time that we raise hell over any salary levels deemed to be too high, we also ask for the productivity levels to be increased in the public sector and are mystified that we do not attract the brightest minds, resulting in waste and sometimes even corruption. We talk about Singapore but do not realise that one of the things Singapore did was to hire the best persons in the public sector and compensate them accordingly. How do we expect to increase our value added and productivity if we do not pay persons based on their delivery?

These are just a few recent examples of the impractical way that we have approached our challenges over the years. It is therefore our approach to resolving issues that have kept us back, not that we do not know what to do, but by the time the political and emotional sentiments are placed in the equation, what we do is take the road that is most popular rather than the one that is in the best long-term interest of the country, as emotions trumps good sense.

This would be similar to acceding to your child's crying not to go to school, not thinking about the long-term consequences.

Problem of road indiscipline

As the murder statistics fall it seems that we are now trying to kill people with cars instead of guns. I really can't understand the inability of the police to deal with the road indiscipline problem that we face. There is no real effort being put into dealing with the carnage on the roads. And we fail to understand that a priority for choosing Jamaica as the place to "live and raise families" is feeling safe when driving, walking, or cycling on the roads.

What this requires is enforcement and not the PR campaign that the National Road safety Council has launched. I fail to understand why (i) I am driving and a taximan stops in the middle of the road and a police car drives by as if it is acceptable; (ii) there are persons out there (including people licensed to transport the public) who have multiple tickets outstanding; (iii) the police do not employ creative strategies to deal with persons who drink and drive, such as waiting on the outside of parties and night clubs and arresting persons who go behind the wheel after consuming alcohol.

And all the Road Safety Council can say is that they are hoping that the number of persons killed in motor vehicle accidents will fall below the 300 mark. Is this another OUR in the making?


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