Lee-Chin has credible formula
PEOPLE WHO feared that Michael LeeChin may have presumed his hand to be better than the market’s and that his assignment was for picking winners will have had their concerns allayed by this week’s publication by the Economic Growth Council (EGC), which Mr Lee-Chin chairs, of its list of priorities for sustainable growth.
Or viewed differently, growth will come, the EGC suggests, by framing policies that build investor confidence, encourage stakeholder participation in the economy, and doing these things consistently. In essence, what Mr LeeChin and his team have asserted is that there are no magic wands or silver bullets. In that regard, the EGC’s model is an extension of the project of the past four and a half years to reform the economy, including doing longagreed things over which the country has procrastinated for decades.
In this regard, it is noteworthy that the starting point of the EGC is a declaration that “macroeconomic stability is a prerequisite for economic growth”. It is a fact that Jamaica, to its peril, disregarded for four decades the painful consequences of which include a primary surplus of more than seven per cent in order to reverse a debt that hovered at 150 per cent of GDP.
While economic markers are trending in the right direction – debt ratios are declining, the current account deficit has fallen, business confidence is at an all-time high – there is much more to be done if these gains are to be locked in, not least of which accelerating reforms in public sector, to create a more efficient and entrepreneurial state; one that cushions the society’s most vulnerable, but is facilitatory of the private sector writ large. The public bureaucracy, in the circumstance, has to organise itself in a way that makes doing business easy rather than being an overweening consumer of public goods.
Yet, given the gains, if not yet fundamental breakthroughs that Jamaica has made on the macroeconomic front, perhaps the greatest contribution that Mr Lee-Chin’s team in advancing the growth agenda is if it is able to galvanise public support around, and governmental action on, an area that everyone knows, conceptually, is a drag on growth, but on which the country has failed to arrive at a clear, implementable consensus: citizen security and public safety. Importantly, the EGC, in listing the matters to be addressed, without declaring it to be an order of priority, placed this item second on its agenda.
Jamaica is a high-crime society, with a murder rate of around 45 per 100,000. Fewer than half of these murders are ‘cleared up’, and we do well if three in 10 of these cases lead to convictions. The constabulary is deemed to be under-resourced, corrupt and inefficient, while an overburdened and inefficient court system has a backlog of nearly half a million cases. Most estimates suggest that Jamaica could lift its economic growth rate by up to six per cent if its murder rate was in the 10/100,000 range.
Fixing the crime problem, including an overhaul of the law-enforcement and judicial apparatus, is important. Some of this will demand tough administrative action and an allocation of capital substantially beyond existing levels, which, in the short term, means a redeployment of resources. If Mr Lee-Chin can shape ongoing consensus on that, he’ll be well along the way.