Friday, May 20, 2016

Safeguarding our growth agenda


The Government has placed growth at the front of its priorities. Since political independence, in 1962, we have only seen growth of any significance in the period 1962 to 1972, and then about three years in the 1980s. So the focus on growth is definitely what is needed if we are to truly see Jamaica develop relative to the rest of the world.

In order for growth to occur in any sustainable manner, however, there are some fundamental things that must first happen. The most important thing to consider is that “sustainable growth” can only occur in an environment that enables its occurrence. This is no different from the need to create an environment that encourages productivity in a single organisation, or even in a business sector.

So, as an example, if someone is learning how to swim they must have a body of water (such as a pool), proper swimwear and, very importantly, a teacher who is capable of teaching someone how to swim — and more importantly can themselves swim.

So growth can only happen in an environment that encourages capital investment, greater productivity, and where people feel incentivised to work. This is the challenge that we have and continue to have. I don’t think that most of our politicians see the long-term link between the need to improve productivity and work ethic, for example, and sustainable growth. For this reason our State has, over many years, encouraged welfare politics and income redistribution rather than productivity improvement and rewards based on productivity.

The result of this welfare politics is squatter settlements and falling labour productivity, because in order to “get ahead in life”, all you have to do is align yourself closely with a political party and ensure they get in power. This type of thinking has led us to develop labour laws that ensure that unproductive labour is rewarded, which results in the long term with many people being contracted without any permanent employment benefits. This in turn creates lower fiscal revenues for the Government and erodes workers benefits into the future.

When I started writing in newspapers in 2003, I thought to myself that surely Jamaica has the potential to be a high growth rate country and see significant development. This, I thought, was where we were destined to be because of our geographic location, language advantage, tourism competitiveness, music and sports competitiveness, etc.

One of my objectives was to see if I could assist to improve the conversation around development and by doing so help Jamaica to achieve economic success, within a 10- to 15-year time span.

One of my main motivations in 2003 was to see Jamaica become a place where my son would grow up and want to live in. At the time he was nine, and I thought that if as a country we did what was necessary, we could have seen Jamaica truly become the place of choice to live, raise families, and do business, as pronounced in Vision 2030. As a result, I also sat on one of the Vision 2030 sector committees.

This obviously didn’t work out as 16 years later we are still grappling with low growth, low productivity, and social issues. Although in the last two to three years we have made some progress in putting a framework in place to address our economic issues, our social and legislative challenges still remain an issue.

This came home to me even more when last weekend I attended my son’s graduation, where he did a bachelor’s degree in actuarial science, and he said to me that even though he would love to come back to Jamaica to live, he would not because it was too disorderly and had too much crime.

He also went on to say that, in his view, Jamaica would be the best place to live if we could control the crime and bring order to the society. I couldn’t argue with him when he said that, and I thought to myself that Jamaica has once again lost another mind that could help us to develop. And this scenario has played out many times over.

This conversation took place in Des Moines, Iowa, which is the same place the two US missionaries that were murdered in St Mary are from. Sitting down to dinner with two residents there, they brought up the matter and said that they were both very popular in Des Moines, and because of it Jamaica had developed a very bad reputation there and many missionaries who were thinking of coming decided not to.

Jamaica has always had the potential to develop into a First-World country, where our people would prosper and we would not be seen as persons of interest for security personnel in other countries. In other words, we could have easily avoided the label of being “extraordinarily violent”.

The problem we have is that we continue to cause our own demise by our failure to do what is necessary from a governance framework to provide an enabling environment for proper economic and social development, and safeguard the growth agenda we speak about so often but fail to realise.

What we must recognise, though, is that creating this environment is not going to come from the continuation of our welfare politics, or biasing our conversations depending on which political party forms Government. For example, I see on social media all the time where some people argue two different ways before and after the election, on the same point.

Safeguarding our growth agenda means that as a people we must change the conversation and we need to start looking at capital as positive for development, rather than with the suspicion we have always treated it and tax it before it starts working.

We have to create an environment of trust, which means that the security forces and government bureaucracy must respect the citizen and not make it hard for them to live and do business.

We have to bring order to the society, which means harsh penalties for those who dispose of waste illegally or who violate the Noise Abatement Act or who break the Road Code.

Until we bring this sort of order to our country, then someone else will lament the fact that their son or daughter chooses not to return to work and live.

Friday, May 06, 2016

A long-term solution to crime needed


According to the World Economic Forum’s 2015-16 Global Competitiveness Report, crime and theft are the second most problematic factors to doing business in Jamaica, accounting for 16 per cent of the challenges. This is only outdone by inefficient government bureaucracy at 16.4 per cent.

Recently we have seen an upsurge in horrific crimes, including multiple killings. These include the following murders: a three-year-old killed by her father, a policewoman shot at a bus stop, and two US missionaries killed by persons unknown. These incidents have renewed calls for severe punishment for the perpetrators. The case of the US missionaries has understandably caused international press coverage, which can result in a negative economic impact if not managed properly.

There have also been renewed calls for hanging by the Security Minister and others. All this comes at a time when we are fighting for the freer movement of Jamaicans within Caricom. The government has also placed responsibility for reducing the crime rate on the shoulders of Police Commissioner Carl Williams.

In my view, the fundamental issues that have created the crime monster will not be addressed by either the resumption of hanging or by saddling the Commissioner with the superhuman task of reducing the crime rate. Hanging can only be a deterrent if we are able to catch the criminals. Even then it is not a solution if a trial takes years to complete, and then through the lengthy appeal process hanging might be in breach of the Pratt and Morgan rules.

It is also impractical to place the responsibility for reducing crime at the feet of the police, as in most cases all they can do is react to the crime after it is committed. I say this because an assessment of the crime statistics reveals that many killings are domestic, with gang murders in second place. We have discussed many times that the real challenges with crime in general and murder in particular have less to do with policing and more to do with the environment.

In 2015, for example, I am told that the police solved 600 murders committed by more than 700 people, which is a significant number of murders to solve. This has been achieved despite being hampered by inadequate resources and operating in a challenging working environment, both in the office and on the streets.

How can the police prevent domestic crimes, if they are defined as mainly crimes of passion, and not premeditated – which means they occur in the heat of the moment? All the police can do is react.

How do the police eliminate gang murders when the society and communities are actually creating more and more people who are likely to fall into crime every day? As an example, one of the challenges with crime in St James is the number of squatter settlements that have mushroomed. So because the communities are not properly organised, they are very difficult to police, and the conditions the people live in do not encourage civil behaviour.

Although short-term fixes must be found to relieve the increasing crime situation, the fact is that a sustained reduction in crime needs a much more detailed assessment. In my view, the first thing we must do is understand what are the causes of crime, and many of these causal factors occur years before the crime actually occurs. For example, people who commit murder today may have been victims of child abuse who saw one or both parents murdered years earlier, or who grew up without any parental control over what movies or music they were exposed to.

The fact is that our crime situation today has resulted from policy missteps over the years. In short, we have continued to create an environment which encourages criminal activity. This is no different from children growing up in a household where there are no rules, and they can do and get away with anything they want. So if children have grown up in an unstructured environment, don’t expect that when they get to 18 they will adhere to the rules of society or their workplace.

Similarly, Jamaica continues to facilitate an environment of indiscipline on the roads (taxis and buses drive how they want); night noise from dances throughout the night (in contravention of the Noise Abatement Act); blaring music that promotes violence and abuse of women; illegal squatting and violation of the zoning laws; illegal vending; violation of environmental standards; and abuse of children and the elderly.

This undisciplined environment is supported by a very slow justice system and a grossly under-resourced police force that is fighting corruption within its own ranks. Add to that a less-than-adequate education system and a high incidence of children not attending school.

So in fact, crime is supported by the ways we have chosen to organise ourselves. We have had many spontaneous reactions to crime over the years – special police task forces such as ACID and Kingfish; curfews; Suppression of Crime Act; Gun Court; and in 2010 – the Tivoli incursion. All this has not resulted in reduced levels of crime, but rather an increasing distrust between the authorities and the Jamaican people, as evidenced by the LAPOP report over the years.

If we are serious about making Jamaica a safe place, then we must realise that crime can only be solved by creating a society of order and respect for the average citizen. We must stop fertilising the crime tree.

Until we choose to do so, we will continue to react to an ever-increasing problem (at best we might have a short-term reprieve). The security forces will find it more and more difficult to cope, and we as Jamaicans will continue to suffer.

We must create opportunities for all Jamaicans and ensure that our children are protected and not subject to conditions that breed criminal behaviour. We must use technology such as CCTV and properly resource the police force. We must ensure that legislation such as the new Road Traffic Act is enacted in short order, just as we do with tax legislation.

Only then can we say that Jamaica will be the choice of place to live, raise families, work, and do business.

Wednesday, May 04, 2016

That Caricom issue: Jamaica -Trinidad relationship


The recent impasse between Jamaica and Trinidad, arising out of the latest round of Jamaicans being not only denied entry to Trinidad but being detained in less than acceptable circumstances, has once again raised the question of the purpose of Caricom, and more specifically the CSME.

This is only the last of many incidents that have grabbed the attention of the region on this matter. The tension began in 1961, when Jamaica held a referendum which saw us withdrawing from the West Indies Federation. At that time the then Trinidad Prime Minster Dr Eric Williams appropriately said that “one from 10 leaves zero”, referring to the fact that without Jamaica the Federation would be virtually non-existent.

Since then we have been unable to see the free movement of goods and people within the region, and examples of these include:

(1) the challenges involved with exporting Jamaican products to Trinidad and Belize, especially patties;

(2) previous instances of Jamaicans being refused entry into Trinidad (I remember last year the Institute of Chartered Accountants of Jamaica sought reassurance from Trinidad that our delegates attending the Caribbean Conference would not have any difficulty with immigration because of a prior incident); and

(3) the landmark ruling coming out of the Shanique Myrie case.

In the case of the movement of goods in particular, my own view is that Caricom and the Council of Trade and Economic Development have proven to be very ineffective in addressing this issue. Countries have made commitments at the highest level that the non-tariff restrictions would be addressed, but years later the problems remain – in particular, the case of the restriction by Belize.

This recent impasse between Jamaica and Trinidad is the latest in a long line of events demonstrating the ineffectiveness of Caricom, and more specifically the failure of our governments to rectify this situation. It reflects a serious lack of leadership in the region. I am left to wonder why we are unable to resolve a matter as important as this, yet we find time to proffer solutions to problems affecting West Indies cricket; but such is the irony of our regional politics.

Once again, though, we need to question the relevance of Caricom. The recurrence of these situations creates divisiveness and drains our energy, because the failure of governments to find a sustainable solution always carries us back to the same unfortunate position.

Nonetheless, I am heartened by the stance taken by Prime Minister Andrew Holness and Foreign Minister Kamina Johnson Smith, and former Minister Anthony Hylton, as they have all stated a commitment to take firm action on this. Hylton at the time had in fact overseen rulings against Trinidadian petroleum products for rules of origin breaches under the Treaty of Chaguaramas.

Outside of these three, however, I think the other responsible people have proven to be ineffective and seem to always be seeking quiet diplomacy, while Jamaica and other countries of the region suffer. In fact, one could say that it is the failure of strong leadership on this matter that has seen the persistent failures of Caricom and our inability to move towards a true CSME.

On this recent impasse, however, I appeal to Jamaicans not to get emotional and respond like the former Trinidad National Security Minister, and also the “Donald Trump” surrogate Trinidadian talk show host. As a people we must remain above those types of responses, and understand that there are many Trinidadians who are decent people.

So we should continue to conduct business with Trinidad wherever possible, because it makes us better off financially. That is the only reason for market trade, so let us avoid emotional reactions.

I, for example, will not stop buying Trinidadian goods just because of this issue, but I have always looked for Jamaican goods over any other import, as long as they are equal in value (quality to price). This is because as a Jamaican my preference should always be for Jamaican goods, but certainly not at all costs to me personally. I therefore encourage Jamaicans to always purchase Jamaican goods over imports where they are available and of similar value.

UNFAIR COMPETITON

However, while we consider the comparison of products and services, we must also be mindful of the policy restrictions that create unfair competition.

Trinidad (through its finance minister) has admitted to providing a subsidy on fuel. Based on our own research (at the PSOJ) this subsidy is more than just on petrol, and extends to manufacturers.

I won’t go into detail here, but suffice it to say that this is in contravention of several parts of the treaty. So while we have enforced a policy (CET under the Treaty) to promote the CSME, we must also recognise where policies are failing us because of contraventions, and must act decisively to address that.

This is where the Jamaican government has failed us, because much of this has been suspected for a while, and brought to their attention, and they have failed to protect the Jamaican people. In fact the PSOJ estimates that over the 10 years to 2014, we have paid out approximately US$700 million we wouldn’t have had to pay if there was no CET on fuel because of the premium charged by Trinidad on account of the CET.

This would be enough to fund the sugar industry every year, and hence create jobs in Jamaica as opposed to supporting the subsidy in Trinidad.

So my appeal to Jamaicans is this: Don’t let one or two wayward voices in Trinidad cause us to view everyone in Trinidad with disfavour. And don’t let the ineffectiveness of the current Trinidad Government to address this issue, or the past ineffectiveness of the Jamaican government, play a role in how we feel. What we must do is demand action by the governments to either solve this Caricom fa├žade, and make it a true CSME, or stop fooling ourselves about it. What we must do is act and stop “posing”.

Caricom has a role to play in our regional development. But it is our failure to treat Caricom properly that has resulted in the many breaches – and not only the failure of Caricom, but the poor economic performance of the region.