The dawning of new beginnings
SINCE JAMAICA became independent in August 1962, we have been searching for economic growth. There have been periods where growth has led to improvement in gross domestic product in the three to five per cent range, but these periods have been significant for their short duration.
In the meantime, normal GDP has been averaging one per cent per annum. With a country that has belowstandard infrastructure, limited educational achievements and narrow developed entrepreneurial drive, the results of this economic malaise have been a stagnation of the Jamaican people and the country while amassing huge debt.
Now, there are signs that could, in fact, be changing the course of our economic fortunes. The previous administration engaged the IMF and performed very creditably in tackling the structural changes for the economy. Debt to gross domestic product moved from 146 per cent down to 125 per cent.
The people made huge sacrifices and the results are now evident. The current administration must be commended for continuing the efforts and seeking to bolster governance by agreeing to a new IMF agreement that will come into effect April 2017.
I have had reason to engage with the person most identified with the driving of the new economic beginnings. Dr Nigel Clarke first came to my attention early February 2014 while he was serving in the Jamaican Senate regarding a bill titled ‘The Urban Renewal Tax Relief from Income Tax, Stamp Duty and Transfer Tax for Developments in areas of Blight and Urban Decay’.
Senators were engaging in partisanship and Dr Clarke, along with six others, saw to the passage of the legislation contrary to his JLP colleagues. This act of independence caused me to pay attention to him. Now, he is the face of the Economic Growth Council, and an hourlong interaction I had with him has left me optimistic.
He has a vision and strategy to implement that vision. I am of the opinion that since the majority of Jamaica’s population has never been exposed to the benefits of sustained GDP growth of five per cent per annum, the economy and the people now have what to look for.
Searching for and achieving five per cent growth requires the best efforts and active participation of us all. Dr Clarke, along with the team, understands that the influencing factors must be attended to. Crime reduction, educational improvement, and productivity growth are very necessary, and require all of us to pull in the same direction, but the benefits in job growth, more equitable taxation, reduction in poverty, and wealth creation are all by-products of this process.
Dr Clarke and his team have made deliverables part of the measuring criteria for the new IMF agreement. The fact that one now knows who is to be held accountable and that quarterly reports will be made to the country, and that we the citizens have our defined roles in the process, strikes me as being much more desirable than the previous hope and prayer that were applied to economic development in the past.
The discipline to work towards targets, the fact that the new proposed IMF agreement has reserves of hard currency to deal with uncontrollable economic shocks, and the plans made with a dominant sense of interdependence all support the dawning of new beginnings.
The difference in this approach is the fixity of purpose and the willingness to make the adjustments while moving towards the desired goals and the importance of buy-in from business lobbyists like the Jamaica Manufacturers’ Association, the Private Sector Organisation of Jamaica, the Realtors Association, et al. The confluence of fortunes is most heartening.
ENOUGH PRAISE TO SHARE
I note with pride the reaction of Dr Peter Phillips to these developments. It matters not whether the Jamaica Labour Party or the People’s National Party achieve the success, but if they, and us, as citizens, work to attain these targets, there is enough praise, plaudits and accomplishments for all to share.
One of the underpinnings of wealth creation in our society is the right to own and trade in personal property, including real estate. The Government, separate and apart from the politicians, has the obligation to protect the right to private ownership. Ownership is wrapped up in the principle of endowment with a title. When the politician begins to intervene in citizens’ right to own, develop or use property as they see fit, it upsets the balance between the State and the governed.
It is necessary to watch carefully the proposed intervention by politicians in the use of private assets by the owners of land on Red Hills Road in St Andrew. Statements attributed to politicians about the use of the courts need to be carefully monitored. One acknowledges that the State has an interest in the common welfare of its citizens. However, we cannot be seen as using the State to use its awesome power to intervene in private property rights and ownership.
We are at the beginning of the dawning of new economic expectations. Think of the investors.