I remember a few months ago being on a talk show with a private sector leader who was clamouring for reduced interest rates as a means of spurring investments and driving the economy forward. At the time I told to him that the reduction of interest rates would not, by itself, move the economy forward and that we would be better served by improving the weak social and political infrastructure spawning the lawlessness in the society. It has always been obvious to me that the need to address our social and political infrastructure is the root cause of our economic and social challenges.
Even while the successful JDX provides some breathing room in the economy, even this is hostage to our social and political problems. And we must understand the crime we have in this country is only a symptom of the political architecture that has held down this country since independence. We started with the wrong foundation and you cannot expect to grow fruit from trees that are planted in mud.
Economy taken a beating
Over the past three to four days Jamaica's economy has taken a real beating from the events that have unfolded. A simplistic direct computation of the losses over the past four days can be to look at four days GDP output, which at a GDP value of $1.1 trillion amounts to some $17 billion assuming 261 working days. In addition to the GDP loss, however, there is the loss of disposable income from events being postponed and generally lower spending in the economy. This will also have a lingering effect as people will be guarded with their spending and investment in our unpredictable social environment.
The effects on tourism and long-term investments will continue to cripple our economic turnaround. Jamaica is a well-known brand and any marketer will tell you that a well-known brand always suffers more from bad news than lesser known brands. So while we expect the publicity from good news about the brand, such as sports or music achievements, similarly when there is bad news then expect the same or more, publicity. Just think about the effect on Tylenol sales worldwide when cyanide was found in one single packet.
So the immediate and longer-term economic impact will be devastating. Not only from international investors but also local consumption and spending. The Finance ministry will face challenges to its revenue programme from this fallout, despite all the positive adjustments that have taken place. I trust that people will believe me now when I say that even more important than interest rates and macroeconomic targets is ensuring that the social and political infrastructure is on a sound footing, as dealing with this will have a much more positive economic impact on the country than any macroeconomic policy.
I weep for Jamaica. Not because of where we are as a country today but because of the lack of understanding of the fundamental challenges that we face by persons who should understand. I weep for Jamaica because of the comments I continue to hear, which tell me that the same emotional responses are coming out as happened when West Kingston came under siege in 2001 or when the slaughter of children dominated the media. I weep for Jamaica because it seems as if we still do not understand what the root causes of our problems are. We do not understand that the main cause of our problems emanates from a lack of respect for citizens' rights, and not from any high rise building or the number of guns on the road. If we do not try to win the "hearts and minds" of the people of Jamaica then we will only be setting ourselves up for another confrontation.
This day has been in the making for a very long time. At least since the 1970s. The state of emergency in the 1970s, which saw many rights being abused, the 1980 election, the Green Bay massacre, the police squads formed over the years from the 1970s until now, the Braeton incident, Janice Allen, the Constant Spring lock-up, 2001 Tivoli attack, police killings. And I could go on. These were all under the guise of preventing criminality. Has it worked?
Support for the security forces
I fully support our security forces, and commend them for their bravery and protection of us Jamaicans. I ask that they respect the rights of their fellow Jamaicans. The movie Invictus portrays a giant (Nelson Mandela) who showed that compassion, respect, trust and forgiveness was the way to rebuild a nation, not retribution. In viewing the news over the past few days I have seen some glimmer of hope that the security forces are starting to change their approach and respecting more the rights of Jamaicans. We need to institutionaliSe this approach.
The problem, however, is not just with the security forces or politicians, but with civil society. I have heard and read the commentary of many Jamaicans (including those overseas) saying that the security forces need to go into another garrison and do the same thing they did in Tivoli, and deal with the criminals. This mindset is the problem we face. I thought that it is not until people are found guilty in a court of law that they become criminals. How would those people who promote this idea feel if they were children in Tivoli over the weekend, or how would they feel if they even had a relative in that situation?
Why are people so stubborn and illogical? We have tried this approach since independence and it has not worked. Why do we want to live in countries where human rights are respected but don't think that our own country is good enough for this sort of respect? Civil society, when you wake up every morning, before you start to blame the politicians and security forces please install a mirror in your bedroom and look in it before you go to the kitchen and eat some of the food that others are being deprived of.
I hope that when all of this is over that we do not go back to business as usual, and more importantly that we do not respond in emotional ways to what has happened. We must deal with the underlying challenges which can only be addressed by proper analysis and careful planning, not the usual responses of "kill them all". This is a defining moment for Jamaica, and we must deal with it in a rational way.
If we want this economy to move forward, and develop in the way it should, understand that only a stable social and political infrastructure can ensure that. When this is done, then I guarantee that we will be on the way to progress.
For all those who have contributed to and supported criminality, who have ignored the need for respecting the rights of others, who have turned a blind eye to corruption, and who have played politics over patriotism, take a bow. You have all contributed to what is happening in Jamaica today and should be proud of your accomplishments. I have always lived by the philosophy that I should not speak about anything I don't fully understand, and if I don't have a rational solution that I should keep my mouth shut. I invite anyone who falls into that category to do the same.
Friday, May 28, 2010
Friday, May 21, 2010
My Jamaica, My vision
A few months ago I started to focus on the belief that if this country is to move forward it is more important to have social and political stability that even a successful Jamaica Debt Exchange (JDX) could not bring. This need to focus on social stability is obvious because social decay in Jamaica has created a greater challenge for us than any immediate fiscal problems.
When I was writing my book I started out with a financial analysis of the macro-economic numbers, determined to find out what the underlying causes of Jamaica's economic challenges were. After all, I grew up in Jamaica hearing about our macro-economic targets, and what economic policies need to be put in place in order to ensure economic development.
So over the years of my own development I have heard politicians, economists, and business persons speak to the need for lower interest rates, free market economy, tax incentives, and a host of other economic and financial initiatives.
Fundamental problem not economic
However, when I got to the end of the analysis I realised that the fundamental problem Jamaica faced was not the economic and fiscal programmes implemented over the years. And it all came home to me because I have listened to and been impressed with much of the analysis over the years, and have always wondered why these supposedly knowledgeable persons cannot find a solution to Jamaica's persistent challenges.
I concluded that the problem with Jamaica, and why it cannot develop economically, is because of the social and political infrastructure. So try as we might to develop theoretically sound financial and economic programmes, unless we bring some stability and sensibility to our social and political systems then we will always be chasing our tails. And so the JDX and other such fiscal initiatives will only be temporary reprieves from our fiscal and economic plight, just as the first MOU was celebrated as the panacea for our economic challenges. We all know what happened to the MOU, despite the several pronouncements of various sector leaders on how great it was. It seemed that I was the only voice at the time saying that it would not work.
Similarly, over a year ago I took the flak of many (along with Ralston Hyman) for saying that the only way to deal with the fiscal situation was to restructure the debt. Based on recent events I do not think I was incorrect.
In July 2008 I wrote an article called "The perfect economic storm", where I indicated that 2009 would be the worst economic period for Jamaica since independence. This again was at a time when others were telling me that I did not know what I was saying.
In May 2008 I wrote an article called "Déjà vu", where I indicated that the uproar surrounding the murder of children at the time would soon fade and we would fall back into complacency as a nation until another upsurge occurred which would shock us. I was told by a commentator at the time that the media would not let up and would keep on it until something was done. Well, over 2,000 murders later, which includes even younger children in even more hideous ways, we are not as concerned as we were then.
I say all this to illustrate that it is not difficult to predict which way Jamaica is going. It is not difficult to understand what the fundamental problem is. It is not difficult to understand what needs to be done to solve the challenges. But what it takes is proper analysis and a political and bureaucratic structure that is geared towards solving the challenges. If, for example, the road network is not set up to encourage discipline on the roads; then confusion will ensue. Similarly if any organisation or political system is not set up to rely less on personalities and more on systems and controls, then how much success can we expect?
So at the end of writing the book I concluded that the real problem Jamaica had was a political system that did not allow for country first. A political system that depended more on personalities rather than political and constitutional systems. A political system that catered more to Jamaica's destruction than its development. I also concluded that what Jamaica needed was not just economic growth, as I heard many suggesting before, but rather "economic and social development", as opposed to just growth, if we were to make the transition from being a fledgling nation to one where we could realise our vision when the flag was raised for the first time in 1962.
Term limits
So for me what stood out the most in the Prime Minister's address to the nation last Monday night was his commitment to having term limits for Prime Ministers. I think that will be the start of the political revolution that is necessary for this country to move towards real economic and social development. I am heartened by this commitment, even more than the others that are being held on to, as this is the one that could bring about the greatest potential for change in the structure that will cause permanent change.
On many occasions in the past when asked how I thought the change would come, I indicated that the change in our fortunes will not come by way of any initiative from politicians but from the pressures of civil society. This is the strongest I have heard civil society speak since I have been aware of what is happening. Not even in the 1970s did civil society speak with such a strong voice, as it was the opposition JLP at that time that led the charge for change while civil society either migrated or kept quiet and hoped for the best. This time I see a maturity in civil society that has never been there before, and I think it has resulted from the openness of debate that has been growing. Not that the media has played the pivotal role that it has needed to, I must add, as I think the media has been more irresponsible in some of the commentary over the years.
And even though everything seems to be falling down around us every day, I believe that before the sun rises, the day is always at its darkest. What we need to do as a country is ensure that the sun does in fact rise, and civil society needs to continue to work with the government, and the commitments made by the Prime Minister, to ensure that we see the change we need. Even though the past two and a half years has seen the greatest challenges for Jamaica, I also believe that it offers much opportunity for change. Remember what it was like in 1980 leading up to the election?
I believe we have made some fundamental economic shifts, such as the restructuring of the debt cash flows, the reduction of interest rates, the move to public sector reform, the significant growth in agriculture, the commitment to divesting the loss-making public sector entities, and very importantly the moves by the Commissioner of Police to deal with corruption in the force. There is more to be done though, Commissioner, as the perception of lawlessness is still prevalent, which is easier to fix than we think if we have the will.
For me this is my Jamaica, as there is no other. This is the only place where I can truly be a first-class citizen, and we must ensure that every Jamaican feels that way through respect of human rights and severe punishment of those who violate other people's rights. My vision of Jamaica is consistent with the 2030 vision, the place of choice to live and work. But this cannot be achieved unless we permanently fix our political system, starting with the commitment by the Prime Minister to have term limits.
When I was writing my book I started out with a financial analysis of the macro-economic numbers, determined to find out what the underlying causes of Jamaica's economic challenges were. After all, I grew up in Jamaica hearing about our macro-economic targets, and what economic policies need to be put in place in order to ensure economic development.
So over the years of my own development I have heard politicians, economists, and business persons speak to the need for lower interest rates, free market economy, tax incentives, and a host of other economic and financial initiatives.
Fundamental problem not economic
However, when I got to the end of the analysis I realised that the fundamental problem Jamaica faced was not the economic and fiscal programmes implemented over the years. And it all came home to me because I have listened to and been impressed with much of the analysis over the years, and have always wondered why these supposedly knowledgeable persons cannot find a solution to Jamaica's persistent challenges.
I concluded that the problem with Jamaica, and why it cannot develop economically, is because of the social and political infrastructure. So try as we might to develop theoretically sound financial and economic programmes, unless we bring some stability and sensibility to our social and political systems then we will always be chasing our tails. And so the JDX and other such fiscal initiatives will only be temporary reprieves from our fiscal and economic plight, just as the first MOU was celebrated as the panacea for our economic challenges. We all know what happened to the MOU, despite the several pronouncements of various sector leaders on how great it was. It seemed that I was the only voice at the time saying that it would not work.
Similarly, over a year ago I took the flak of many (along with Ralston Hyman) for saying that the only way to deal with the fiscal situation was to restructure the debt. Based on recent events I do not think I was incorrect.
In July 2008 I wrote an article called "The perfect economic storm", where I indicated that 2009 would be the worst economic period for Jamaica since independence. This again was at a time when others were telling me that I did not know what I was saying.
In May 2008 I wrote an article called "Déjà vu", where I indicated that the uproar surrounding the murder of children at the time would soon fade and we would fall back into complacency as a nation until another upsurge occurred which would shock us. I was told by a commentator at the time that the media would not let up and would keep on it until something was done. Well, over 2,000 murders later, which includes even younger children in even more hideous ways, we are not as concerned as we were then.
I say all this to illustrate that it is not difficult to predict which way Jamaica is going. It is not difficult to understand what the fundamental problem is. It is not difficult to understand what needs to be done to solve the challenges. But what it takes is proper analysis and a political and bureaucratic structure that is geared towards solving the challenges. If, for example, the road network is not set up to encourage discipline on the roads; then confusion will ensue. Similarly if any organisation or political system is not set up to rely less on personalities and more on systems and controls, then how much success can we expect?
So at the end of writing the book I concluded that the real problem Jamaica had was a political system that did not allow for country first. A political system that depended more on personalities rather than political and constitutional systems. A political system that catered more to Jamaica's destruction than its development. I also concluded that what Jamaica needed was not just economic growth, as I heard many suggesting before, but rather "economic and social development", as opposed to just growth, if we were to make the transition from being a fledgling nation to one where we could realise our vision when the flag was raised for the first time in 1962.
Term limits
So for me what stood out the most in the Prime Minister's address to the nation last Monday night was his commitment to having term limits for Prime Ministers. I think that will be the start of the political revolution that is necessary for this country to move towards real economic and social development. I am heartened by this commitment, even more than the others that are being held on to, as this is the one that could bring about the greatest potential for change in the structure that will cause permanent change.
On many occasions in the past when asked how I thought the change would come, I indicated that the change in our fortunes will not come by way of any initiative from politicians but from the pressures of civil society. This is the strongest I have heard civil society speak since I have been aware of what is happening. Not even in the 1970s did civil society speak with such a strong voice, as it was the opposition JLP at that time that led the charge for change while civil society either migrated or kept quiet and hoped for the best. This time I see a maturity in civil society that has never been there before, and I think it has resulted from the openness of debate that has been growing. Not that the media has played the pivotal role that it has needed to, I must add, as I think the media has been more irresponsible in some of the commentary over the years.
And even though everything seems to be falling down around us every day, I believe that before the sun rises, the day is always at its darkest. What we need to do as a country is ensure that the sun does in fact rise, and civil society needs to continue to work with the government, and the commitments made by the Prime Minister, to ensure that we see the change we need. Even though the past two and a half years has seen the greatest challenges for Jamaica, I also believe that it offers much opportunity for change. Remember what it was like in 1980 leading up to the election?
I believe we have made some fundamental economic shifts, such as the restructuring of the debt cash flows, the reduction of interest rates, the move to public sector reform, the significant growth in agriculture, the commitment to divesting the loss-making public sector entities, and very importantly the moves by the Commissioner of Police to deal with corruption in the force. There is more to be done though, Commissioner, as the perception of lawlessness is still prevalent, which is easier to fix than we think if we have the will.
For me this is my Jamaica, as there is no other. This is the only place where I can truly be a first-class citizen, and we must ensure that every Jamaican feels that way through respect of human rights and severe punishment of those who violate other people's rights. My vision of Jamaica is consistent with the 2030 vision, the place of choice to live and work. But this cannot be achieved unless we permanently fix our political system, starting with the commitment by the Prime Minister to have term limits.
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