Gaps in EGC report
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.