Friday, June 09, 2017

Political expediency has made Jamaicans poorer



As I reflect on how Jamaica has developed, it reminds me of some parents who, in bringing up their beloved children, try to make life as comfortable as possible for them. The parents give them the best, cater to their every need, and provide them with anything they ask for.Further, the parents protect those children from any possible missteps they may make, to the point where they become very sheltered and unable to face challenging situations. The parents will even attack anyone who tries to discipline those children if they misbehave. We have often read about this sort of thing happening in various schools.

The usual result of all this attention is that the children are unprepared for life and end up underperforming or depending on their parents or other people forever.

This is similar to what has happened in the Jamaican economy. Either because of “Love” for the people, or more than likely political expediency, policy measures have been driven by the need to “give a fish” rather than “teach Jamaicans how to fish”.

Giving the fish is more accepted, as the recipients don't have to do any work, and therefore feel that the politicians really care about them and so will give them their vote.
Teaching someone to fish will of course demand effort on both the part of the political representative and the constituent, and may result in the constituent being upset and therefore not giving the vote to the politician.

The consequence of trying to “teach people to fish” in our environment usually is that anyone who tries to provide people with the ability to fend for themselves, rather than sit back and receive gifts, will not be elected. The politician is caught between a rock and a hard place, as he is divided between doing what is right and losing the election, or doing what is unsustainable and winning the election. Normally they will go for the short-term solution and win the election, but in the end things only get worse.

We have seen this in recent elections — for example, when Holness said there would be bitter medicine, during the 2012 campaign. People were even wonderings how he could be so stupid to speak the truth, which many times we don't want to hear. Or the fact that Phillips took the bold decision to implement austerity measures to save us from economic disaster, and no doubt caused some people to vote against the government at the time.

Capitalising on the “politically na├»ve” remark by Holness in 2012, the PNP went on the offensive and said that Holness didn't love the poor. Learning from this in 2016, the JLP promised that things would get better, as everyone would have $18,000 per month more after the $1.5-million tax threshold.

Again, when McKenzie was mayor, he went on a campaign to rid the streets of illegal vending. The backlash was swift, with persons on social media saying that he needed to stop harassing people who were trying to make a living.

Recently when I wrote about the Hip Strip (a significant part of our main FX earner) becoming a dump, and lacking any order, the responses from social media indicated that I was fighting against people trying to make a living. No concern for the fact that when the Hip Strip gets worse it reduces the real estate value and is less attractive for the tourists, so the businesses will suffer, and maybe close down, just like many residents see their property values depreciate because of roadside garages and businesses being established in residential areas. But not to worry, if the businesses ever try to close down, or downsize and lay off anyone, the IDT will get them and make it more difficult.

But as many Jamaicans (in Jamaica and even in the diaspora, where they have to abide by the rules) would say, no problem with that, just don't fight against a trying man. Let them try that in the US or Canada though, and they would be keeping company with Bernie Madoff.

Because of this attitude, and the need for politicians to survive, we end up with policies all the time that focus on welfare rather than productivity.

Is it any wonder that Jamaica's labour productivity has been consistently falling since 1972? Is it any wonder that our GDP per capita is around US$7,000, while small Antigua's is US$18,000? Is it any wonder that we have 180,000 households reported to be stealing electricity, while the compliant pay for it? Is it any wonder that 40 per cent of our population is made up of squatters?

As long as we have this demand and supply relationship, then we will only be moved to do what is necessary when our back is against the wall, as was done in 2012 with the IMF programme. And then again, it only worked because of the public-private partnership through EPOC, or ESET. Relying on the public sector institutions alone has never worked. Not because there are not very talented people in the public sector, but systems like the procurement process severely restrict what can be done, while more and more money is thrown at replicating studies done too many times to mention.

What we will have to do is to try and break this cycle, as was done with the economic downward spiral in 2012. This means that government policy should be focused on doing what is necessary for driving long-term growth and sustainability, which will mean that short-term welfare will have to be reduced to only what is essential, and not the practice of creating policy that makes everyone poorer.

For example, why have we not been able to see the need to enforce general law and order, such as road discipline and noise pollution? After all, these create the breeding ground for graduation to more serious crimes. Why have we not been able to deal with the labour laws that create lower productivity? Why have we not been able to deal with illegal vending? Why do we push aside common sense long-term development policy for short-term resource distribution?

Because of this welfare politics, governments since the 1970s have created policies that limit productivity and create poverty throughout the economy. We have not sought to make the future of our people better, as evidenced by where we are, but have sought to cater to short-term satisfaction.

We have made some progress, however, and because of this Jamaica is in a better place than it was four years ago. But we must not get complacent. We must continue to strengthen the institutions that will create long-term development and make Jamaicans better off than they are today.