Jamaica's lack of disruptive thought

The Jamaica Observer's editorial on Tuesday appropriately addressed the issue of the lack of “big” thinking, which has plagued Jamaica and resulted in a lack of development.
The Observer yesterday reported on the PIOJ press conference, which announced an estimated growth of 0.3 per cent for Q2 2017 (April to June), which followed a 1.4 per cent decline in Q1, as reported by STATIN.

The editorial, in my view, is fully supported by the PIOJ press conference. Dr Henry reported that in the short term, the reliance on growth would be on the expected construction on the Alpart plant, and that the risks to growth remain weather conditions and any oil price shocks, primarily.

This is the same thing we have been saying from as far back as I can remember, even while the world has, and is, changing around us.

In other words, for 40 years or more, Jamaica has been doing the same things, in a rapidly changing world, but expecting different results. Governments come and go, and they make grand announcements, but the same growth and market inefficiency issues remain.

So one could look at the last 10 years of the Global Competitiveness Report, and crime, bureaucracy, tax rates and corruption would feature among the top five impediments to doing business.

What is more, these four consistently account for upwards of 40 per cent of challenges to doing business.

It is this same attitude to governance that has caused the problem, not only with the Hip Strip, but with tourism decay in general. One may say that we have been increasing the number of tourists that visit the island every year, and that may be so. But within the context of a growing tourist market, cheaper and more accessible air travel, greater income levels and spend by tourists worldwide, and importantly, very good tourism offerings, particularly by our all-inclusives — have we really kept pace and achieved what and where we should be?

It is the attitude that ignores indiscipline (including illegal vending and harassment); the attitude that ignores infrastructure maintenance and development (because of our short- term fiscal thinking); and the attitude that ignores the foundations of crime (squatting and lack of order), that have kept us back and have us talking about negative 1.4 per cent growth, followed by 0.3 per cent growth.

SHAMEFUL GROWTH

Let us be clear: 0.3 per cent growth, based on the sacrifices we have made, the potential we have, and the growth we are seeing in the global economy, is shameful.

In fact, one could say it is within the margin of error, and when STATIN reports the final numbers, it could very well be negative.

With all of this, we still keep doing the same things and expecting different results. And maybe it is because successive governments think that even if the fiscal accounts do not perform well, all they have to do is raise taxes. Well, they have basically been doing so every year, and still we are reporting — 1.4 and 0.3 per cent growth rates.

Another example is the recent announcement by TPDCo to instal anti-harassment officers, which is being done for maybe the third time. But after a while you see the officers blending in with those doing the harassing, and as usual, “Jamaica - no problem”.

I am not saying that we have not had development in Jamaica, but I am saying that we are underperforming significantly compared to where we need to be. This is primarily because of the mindset that we have, and have had, towards governance.

In other words, what we need in our governance is “disruptive thinking”. And we had that when we put EPOC and ESET in place. Both teams have seen tremendous success, and made Jamaica the “poster child for IMF reform”.

This means that we are more than capable of moving the economy forward, and one has to therefore wonder why we can't achieve more.

Sadly, this is because of what the Observer editorial referred to as “lack of big thinking” or I would say “lack of disruptive thinking”.

If we are going to go for significant development and growth, and by extension improved living standards for all, then we must change the way we do things.

We cannot continue to be impeded by a set of procurement rules that cause more opportunities to be lost than costs saved; we cannot continue to ignore the indiscipline on the roads, such as the traffic lights that have become mini shopping malls and centres of harassment; we cannot continue to ignore the zoning laws and night noises; we cannot continue with labour laws that encourage an unproductive environment and the resultant loss of incomes; and we cannot continue to blame and restrict capital from working to develop the lives of Jamaicans, and as soon as someone starts to do well we tax them back down to a level of mediocrity.

And if we are going to achieve consistently high levels of growth, we have to recognise that the world is changing around us. So our growth strategy cannot continue to be to rely on “big” one-time projects, and not realise that we have to change our approach to agriculture because of climate change; we have to change our approach to growth inducement strategies; and we have to stop incentivising where we do not have a comparative advantage and build infrastructure to support those areas where we do.

Our fiscal policy must begin to recognise that the more productive capital is, the greater the returns for the economy. If we keep increasing the tax burden on capital and people, if we keep putting more and more stringent regulations in place, it follows that our fiscal accounts will fall, leading to further negative growth.

One ridiculous suggestion I heard recently was the recommendation by the National Road Safety Council that a tax be imposed on motor cycle imports to reduce the number of motor cycle accidents.

So, if we are to move beyond the growth we have seen in the first six months of 2017, we must understand that we need to have a mindset change from small thinking to big thinking, or from safe thinking to disruptive thinking.

Otherwise, in 40 years we will still be having the same press conference as the PIOJ did on Wednesday.