Gaps in EGC re­port

Jamaica Gleaner - - ARTS&EDUCATION - Den­sil Wil­liams Den­sil A. Wil­liams is a pro­fes­sor of in­ter­na­tional busi­ness and pro vicechan­cel­lor-des­ig­nate, plan­ning at the UWI. Email feedback to col­umns@glean­erjm.com and den­silw@ya­hoo.com.

THERE IS no doubt that Ja­maica needs a change in mind­set, strate­gic plan­ning, and dis­ci­plined eco­nomic man­age­ment in or­der to turn around its dis­mal growth per­for­mance of the last 40 years. The anaemic av­er­age growth per­for­mance of 0.2% for the last decade and around 0.8% for the last 40 years has left most per­sons in de­spair and loss of hope about our eco­nomic for­tunes.

Prime Min­is­ter An­drew Hol­ness has de­cided to try some­thing novel (not new) by ap­point­ing a growth czar and pro­vid­ing in­sti­tu­tional and hu­man sup­port to en­sure that the czar de­liv­ers on the man­date to bring sus­tain­able growth to the Ja­maican econ­omy. The prime min­is­ter drew on some­one who not only in­spires, but has a proven track record of solid per­for­mance: Michael Lee-Chin.

The Ja­maican-Cana­dian en­tre­pre­neur and proven per­former in the cor­po­rate sec­tor took on the role as chair­man of the much-talked­about Eco­nomic Growth Coun­cil (EGC) and is ably as­sisted by Dr Nigel Clarke.

The ace team has done its work and pub­lished ex­cerpts of its find­ings in The Sun­day Gleaner of Septem­ber 25, 2016. The team must be con­grat­u­lated for the thor­ough­ness with which it ap­proached the task and also the very reader-friendly for­mat of the re­port.

Over­all, the team iden­ti­fied eight broad strate­gic ar­eas that need to be tack­led in or­der to de­liver 5% eco­nomic growth in 2020 and beyond. Th­ese broad ar­eas in­clude: main­te­nance of eco­nomic sta­bil­ity and pur­suance of debt re­duc­tion; im­prove­ment in cit­i­zen se­cu­rity and pub­lic safety; im­prove­ment for ac­cess to finance; pur­suance of bu­reau­cratic re­forms to im­prove the busi­ness en­vi­ron­ment; stim­u­la­tion of greater as­set util­i­sa­tion; build­ing of hu­man cap­i­tal; har­ness­ing of the power of the di­as­pora; and, catalysing the im­ple­men­ta­tion of strate­gic projects.

Be­low th­ese broad themes are some spe­cific and ac­tion­able ini­tia­tives.

WHAT’S NEW AND DIF­FER­ENT?

Those of us fol­low­ing the dis­course on eco­nomic growth in Ja­maica will im­me­di­ately recog­nise that the EGC pro­pos­als are not new. The eight broad the­matic ar­eas iden­ti­fied have been talked about, stud­ied, and rec­om­mended in some shape or form over the last 30 years.

The emer­gency pro­duc­tion plan by UWI pro­fes­sor Ge­orge Beck­ford, et al, in 1977, for ex­am­ple, spoke to the crit­i­cal use of as­sets to drive growth or­gan­i­cally. Sim­i­larly, the 1996 drafters of the na­tional in­dus­trial pol­icy spoke about is­sues of ac­cess to finance, im­prove­ment in the do­ing busi­ness en­vi­ron­ment, among oth­ers.

Most re­cently, one of the most com­pelling pieces of work on eco­nomic growth in Ja­maica, to date, the Growth-In­duce­ment Strat­egy, de­vel­oped by the Plan­ning In­sti­tute of Ja­maica in 2010, iden­ti­fied with Prime Min­is­ter An­drew Hol­ness (right) poses with his growth point men, Michael Lee Chin (left) and Nigel Clarke. a num­ber of the is­sues in the EGC re­port of 2016. That re­port is the­o­ret­i­cally sound and em­pir­i­cally rich.

What the EGC has done is to bring, front and cen­tre, the is­sues that have im­pacted our abil­ity to grow in a sus­tained way over the last 40 years.

While there might be a few novel ideas in the EGC re­port of 2016 (for ex­am­ple, those un­der the rubric “im­prove cit­i­zen and se­cu­rity and pub­lic safety” and “har­ness the power of the di­as­pora”), they are noth­ing path-break­ing, and, most im­por­tant, have been tried in other ju­ris­dic­tions be­fore and have de­liv­ered suc­cess.

I par­tic­u­larly like the idea about the sep­a­ra­tion of the MOCA from the Ja­maica Con­stab­u­lary Force and the one on the merg­ing of the Cor­rup­tion Preven­tion Com­mis­sion, the In­tegrity Com­mis­sion and the Of­fice of the Con­trac­tor Gen­eral. Th­ese are sound law-en­force­ment rec­om­men­da­tions that should be im­ple­mented post-haste.

Law and or­der is found in all stud­ies to be strongly and pos­i­tively re­lated to eco­nomic growth. That is, where law and or­der is weak, eco­nomic growth is weak, and where law and or­der is strong, eco­nomic growth is strong. We have se­ri­ous is­sues with law and or­der in Ja­maica, and th­ese must be ad­dressed now.

The rec­om­men­da­tions pre­sented by the EGC clearly em­anate from rig­or­ous pri­mary re­search and care­ful bench­mark­ing of what has worked in other ju­ris­dic­tions and how they can be adapted to the Ja­maican con­text. A good ex­am­ple here is the rec­om­men­da­tion about the di­as­pora bond un­der GloJam. This shows what has worked for the Jews and how it can work for the Ja­maicans as well.

I am, there­fore, not wor­ried that the EGC did not come up with so-called new so­lu­tions to our growth prob­lem. I am happy they have put, front and cen­tre, th­ese long-stand­ing is­sues to show that we have failed to man­age our econ­omy well. Lead­er­ship both in the pub­lic and pri­vate sec­tor must take re­spon­si­bil­ity.

WHAT ELSE IS NEEDED?

Where the EGC needs to go next is to present greater clar­ity and thought on the ac­count­abil­ity frame­work that will be needed to ef­fect th­ese out­stand­ing changes. The EGC should lay out clearly the re­spon­si­ble min­istry or arm of govern­ment that is re­spon­si­ble for the im­ple­men­ta­tion of the var­i­ous ini­tia­tives, the time frame in which they can rea­son­ably be im­ple­mented, and the ac­count­able of­fi­cer. The ‘Dec­la­ra­tion’, then, should speak to the nec­es­sary sanc­tions and re­wards that will be given at the end. This way, we the pub­lic can see where the lead­er­ship head space is on the mat­ter of ac­count­abil­ity.

Fur­ther, the EGC should have pro­vided us with an im­pact anal­y­sis of the var­i­ous ini­tia­tives. The PIOJ Growth-In­duce­ment Strat­egy of 2010 has a good tem­plate for this. It should be adopted here.

Also, we would have liked some thoughts on the cost the econ­omy will have to bear in or­der to im­ple­ment th­ese trans­for­ma­tional ini­tia­tives. This will bet­ter help us to de­ter­mine where our pri­or­i­ties are and what low-value ac­tiv­i­ties we should be pay­ing less at­ten­tion to and shift re­sources to high­er­value ac­tiv­i­ties.

While I ac­cept that the list of ini­tia­tives pro­posed by the EGC is not ex­haus­tive, what is miss­ing is a dis­course on the need for a growth pole to an­chor growth in the Ja­maican econ­omy for the medium term. Tourism has been touted as this pole, but given the fick­le­ness of this in­dus­try, I sug­gest that we do not use this as the growth pole.

We need to think more about our lo­ca­tion, an en­dowed re­source that can be used to drive eco­nomic growth through a lo­gis­tics-cen­tred econ­omy.

It is not ex­pected that the ini­tia­tives from the EGC will solve all the prob­lems in Ja­maica. How­ever, it is clear that if im­ple­mented well, the pro­pos­als from the EGC will make some progress in deal­ing with the low-growth is­sues in Ja­maica.

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