Thursday, December 15, 2011

PNP manifesto analysis

I have been asked to provide a brief analysis on the PNP manifesto by a few of my FB friends, and so will attempt to do so below. It of course requires further discussion and hopefully some of that discussion will take place on this post so that the issues will become a lot clearer. I only have 2070 friends so it may be worthwhile if everyone could share the discussion with your friends so that it can be far reaching.

Let me first start buy saying that it is encouraging that so many persons seem to have taken an interest in what is being proposed.

All in all, and given the timeframe of the election period, one could say that this document is a fair response. The fact is that there was not enough time for a more comprehensive document as elections are just around the corner, and I suspect that the PNP wanted to get this out prior to the Finance debate, as strategically it sets up the expectation of the debate and makes it easier to communicate for Dr Phillips. This is why a fixed election date is good, so that the process of consultation in campaigns can be longer and bring out more. It does show that work is happening, although I think that greater thought could have gone into the document.

There are some stronger areas, which show the strength of the spokespersons, such as Energy, Foreign Affairs, Education, Agriculture, and an understanding of the economic challenges. The policies do not seem to be inconsistent with the current administration, as expected, as there are really not many options available to whoever forms government. Will be interesting to see how the JLP’s compares, as I don’t expect much policy variation, which is why details on implementation is important. So we could end up at the same place if we do not have those details

I will also do the same synopsis of the JLP manifesto when it comes out.

My comments are listed as follows:

  1. Our Mission: this gives  brief overview of the manifesto contents, and this and throughout the manifesto shows that the PNP seems to have a clear understanding of the issues that face the Jamaican people. It however does not in my view represent a mission but seems more like a summary of the views contained in the document and seems more like an introduction than a mission. This sets the stage for the rest of the document as it does not clearly define a mission, which is the first problem.
  2. Foreword: sets out the PNP’s understanding of the challenges that lie ahead, and it is obvious that they are at one with the “bitter medicine” ahead that was sated by the Prime Minister. There is therefore an actualization by both parties that 2012, and the foreseeable future is going to be difficult for Jamaica. One would therefore expect that the document will continue to define what the “bitter medicine” will be, as the JLP also needs to do, so I will look at the contents to see if this “bitter medicine” is defined, as once you set up this type of expectation it is necessary to define it for the people if they are being asked to sacrifice.
  3. Eighteen Steps to Full People Empowerment: this section does clearly set out some of the policy options that need to be undertaken, although I do not think that these will lead to people empowerment. People empowerment in the context of Jamaica is much more than setting out these policy objectives. In fact rather than “steps” to empowerment these seem to be statements of intent. Steps imply a path, but this does not seem like a path but rather a focus on the destination of the steps. The section does provide a good summary of what needs to be done, but is missing the most important thing in relation to the “empowerment” theme, which is the assurance of justice and equity. For example, what is the assurances that the rights under the Charter of Rights will be respected and that people won’t have to go to court to fight it? The most important aspect of empowerment for people include, in addition to justice, proper health and education access and facilities, but this is not mentioned in this empowerment section.
  4. Current Economic Position: the following are noted:
    1. Shows understanding of the challenges that Jamaica faces, but does not mention what I think is the primary problem, that of the Balance of Payments, which is impacted by productivity and competitiveness. There is a need for a credible medium-term economic programme, as indicated by the IMF. Will see if further that programme is provided in the document since it states the necessity for one to deal with the challenges ahead.
    2. My own view is that the debt is NOT the central problem facing the government, and is only a symptom of the underlying problem. This seems to be the same focus on the fiscal as in the current IMF agreement, and the danger of this focus is that it ignores action on the underlying problem. This therefore suggests an agreement with the current fiscal focus.
    3. Statement about what is required for a credible macro-economic programme continues to speak to a focus on fiscal and expenditure management. I would have thought that this statement would have included importantly reference to the JEEP (government stimulus) as an important characteristic, as the other things to be taken into account are not as important for economic expansion. Tight expenditure and debt ratio focus are both contractionary effects; and increased support from partners seems a contradiction in the face of the admission of the global crisis, as grants have already been underperforming and will continue to do so. It would seem that the “self-reliance” talk of the 70s would have been more appropriate. Agree 100% about the tax system and the corruption and waste.
    4. Following paragraphs criticizing the JLP seems like wasted space, and tends to lose the reading flow from the party’s intent. I don’t think that a manifesto should include criticisms of the opponent but just focus on what the author intends to do. Leave that other part for the political platform and ads.
    5. The opening of the plans and strategies does recognize the need for a mix of fiscal responsibility, growth strategies, and consultation. All are very important to move forward.
    6. Correct that a new medium term IMF agreement is needed. Would have loved to see mention of whether an extended fund facility or standby agreement is needed, and what are some of the things that will be sought in this agreement. Don’t expect specifics as it is a negotiation and therefore understand the need not to say too much on this
    7. MOU with public sector workers did not work before and certainly is not what is needed. Consultation does need to happen but needs to be focused on productivity improvements and how to best reward productivity.
    8. The tax reform statement shows that they are consistent with the current tax reform paper, which in my view is not adequate. The aim of tax reform must be primarily stimulating the economy. After reading this I get the impression that the focus will be on fiscal – “widening the tax base”. I might misunderstand but it needs further clarification, so I will give the benefit of the doubt and say that the intent is for economic stimulation, but it needs further details.
    9. Agree that programmes like JDIP and JEEP needs to be on the budget, and also needs parliamentary oversight, which I would think should have a parliamentary committee that oversees massive programmes.
    10. I don’t like government identifying sectors for growth. Sounds too much like a government controlled state, which we have always been. Don’t discriminate by providing incentives to some and not the others. The market will pick the winners if the proper environment is created. The problem has always been that because we do not have the proper market environment then government becomes a welfare programme through incentives.
    11. They state that they will “accelerate decision-making on the choice of fuel sources” and later goes on to state that they will be committed to diversification and set up a National Energy Council. While the document does correctly recognize the need for focus on this crucial problem, it seems to be bringing the government back into decision making and is in contradiction to what Paulwell has said, which I like. Government needs to only set certain environmental and regulatory standards and allow the private sector to determine what energy sources they want to invest in within those standards. I would have preferred to see Paulwell’s position replicated in this document. I don’t get the feeling that with the National Council that we are moving away from the bureaucracy that has stifled our energy effort so far.
  5. JEEP: much of the programme hinges on this so it requires its own analysis:
    1. not enough detail given the hype and expectation around it.
    2. State that funding will come from existing state resources, which is the JDIP and TEF. Does the JDIP loan contracts and the purpose of the TEF allow for this sort of allocation?
    3. Well designed infrastructure projects – agree that focus needs to be on infrastructure projects but more detail needed here. There was so much hype about JEEP that I believe it needs to be more clearly defined, especially as 25% of JDIP funds is to go towards it, in keeping with the call for transparency. JEEP is the same as JDIP in intent, that is a stimulus package, which is good for the economy but we need to have details and transparency so that it does not go the way of JDIP.
    4. Says the measures to encourage investments (JEEP tax incentives) will not sector discriminate but above the document states that certain sectors will be focused on. Seems to contradict. This also implies the giving up of tax revenues. What will this do to the tax revenues and where will the shortfall be made up?
    5. Disgaree with GOJ taking equity positions in firms. We tried it through DBJ funding and it didn’t wok and we could therefore end up with government getting involved in the productive sector again, such as after FINSAC.
  6. The following sector focus sections shows what needs to be done in the various sectors we presently hold a comparative advantage in but it seems as if government involvement will be high. The sections do recognize that innovation is needed in these sectors but does not emphasize enough what the government needs to do to ensure that the environment is favourable to encourage investment, which is what is needed. It is obvious that a lot more thought went into the Agriculture section however.
  7. The section on encouraging innovation, competitiveness, and entrepreneurship does not provide an understanding of what is needed to do so as it broadly speaks to what is to be done and again incentives, when what is needed is to create the building blocks for competitiveness as contained in the Global Competitiveness report, which shows what Jamaica’s main challenges are.
  8. Foreign Affairs section seems ok and I would expect that as Hylton does have a good understanding of what is needed.
  9. Creation of an Enabling Environment: this does show a clear understanding of what is needed in an enabling environment. It speaks to infrastructure, primary education and healthcare, social welfare programme, public/private partnerships, need for constitutional and legislative reform (not enough though on this important issue and what is proposed won’t make a difference in my view), crime (would have loved to see a move to make the police force more independent and accountable, such as is being done now with success), .

I think more detail is needed and hope that this will come out in the discussion over the next few days.

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