Friday, January 20, 2017

Focus on improving our greatest asset for development

Another year has passed, and as usual at the start of a new year we wish each other much prosperity and make new (or, more likely, repeat) resolutions about how we intend to improve ourselves. At the start of the year many plans are made around how we intend to improve our money management, health, and social lives.

Our leaders also deliver messages that speak to the need for us to work together to achieve prosperity and ensure that every Jamaican has an opportunity to be the best they can be. The political leaders also take jabs at each other and give all the reasons why either party will be better for Jamaica, and ensure a better path for all, even though over 54 years we have not had the evidence of the prosperity promised by either, year after year.

In fact, with a few adjustments we may be able to replay today the New Year’s messages done 25 years ago and they would still be very relevant — the reason being that we have not really done anything to address the fundamental cause of the challenges we have faced for the past 40 years.

Today, however, most will agree that we see a light at the end of the tunnel, which seems to be daylight and not the usual train that has always been at the end of our previous policies.

This is because approximately four years ago we decided to make a fundamental shift in our governance and focused our attention on inclusion of all stakeholders in our development, maybe because we had no other choice.

However, the inclusion of all stakeholders through institutions such as EPOC, ESET, and the Partnership for Jamaica were instrumental in placing us on the path we are on today.

And so today we are optimistic that we will exit the tunnel and see daylight and not be mowed down by a train, as we have become used to. This is because we have seen where the previous government made the decision to forge ahead with the necessary reforms, and inclusion of the entire country. And the current government showed the political maturity to continue the major fiscal and economic programme and other things such as continued board appointments.

Both must be commended for this, as this is what made the difference, and changed the course of our destiny in 2016.
What this change has done though is turn the car away from driving off the cliff and point it away from disaster — and in fact, we have started to point the car in the right direction. However, we are still very close to the edge of the cliff and must now start to move the car away from the cliff and drive away from it.

It is also essential that this happens in 2017, as anything that remains stable is really “progressing backwards”, somewhat like the term “negative growth” that economists love to use.

So to even remain stable we must move forward somewhat; and to make progress, it means moving forward at a minimum pace, and to win the global competitive race we must move forward at a minimum-plus pace (the plus of course being a pace above the global average).
When we go back to basic economic theory (which has always applied to us), this can only happen if we recognise that a country’s competitiveness is determined by how it capitalises on its comparative advantages.

This means that our development requires us to maximise the value from our areas of comparative advantage, which we have not done in the past, and what some of the legislative changes (Harmonisation Act) seeks to do.

Before I mention these areas though, it also means not making some of our sectors that provide the “veins with blood” to be at a disadvantage compared to other countries. I speak specifically about the financial industry, which is significantly constrained by taxes and bureaucracy, way beyond our competitors, even while we expect capital to flow.
This expectation is as logical as the NSWMA trying to collect garbage without any garbage trucks, and must be fixed.
So if we are to move forward at a competitive pace we must focus on our areas of comparative advantage, which are primarily tourism, agriculture (in niche areas) and the BPO sectors. All of these need the “blood” provided by the restricted financial industry, but, very importantly, also need productive human resources at the base.

But over the last 54 years it is this human element that we have “oppressed” — by not providing opportunities, allowing police brutality and inhibiting growth in other ways such as bureaucratic inefficiency and increased taxes and cost of living.
As a result of this we today have a population that has a relatively low literacy rate, falling labour productivity, increased labour force informality (which means no retirement income plans), one-third living in informal settlements, and a limitation being imposed on their full potential.

Is it any surprise then that UHWI cannot perform major surgeries because of a shortage of specialist nurses, when just a few years ago some of our politicians were encouraging training professionals for export to get the crumbs of remittances instead of the bounty of their contribution to development? And then when they leave, based on us supporting that policy, we are surprised that we have none here to keep the health sector going.

For me, therefore, our greatest asset is the people of Jamaica and policy must do everything to ensure their security, as espoused in the EGC’s call to action. It is the citizens, and their development, that societies are built on and we must do everything to ensure that their long-term prosperity is not sacrificed for short-term objectives.

This is the challenge I see for 2017, because the way we approach citizen security and opportunity will not only affect the outcome of the EGC’s 5 in 4 objective, but will also determine the country’s long-term viability.

This calls for a fundamental policy shift as was done in 2013 when oversight of the economic programme was given to private citizens through EPOC.