Of PSOJ and the Supplementary Estimates

THERE WERE perhaps other Private Sector Organisation of Jamaica (PSOJ) presidents, especially during its early days of ideological combat, who were his equal. But none was more courageous, or vocal, in pursuing Jamaica’s interests than Howard Mitchell, who stepped down last week after two terms as head of the country’s leading private-sector group.

Mr Mitchell, especially, regularly challenged the political class, Government and Opposition, as well as his colleagues in the private sector, on failures in governance. He was acutely aware of the intersection between good and decent management of public affairs and other positive societal outcomes, including sustained economic growth. Put differently, he understood that poor governance and corruption, in the public or private sector, was bad for business and for sustained economic growth.

Indeed, it was not unlike the man that his parting shot as president of the PSOJ was a less-thanoblique criticism of the Government’s increasing resort to states of public emergency as a strategy for fighting crime and a call for broad stakeholder engagement to deal with the problem.

“Repression and increased policing could not be the only responses to this creeping decivilisation of our country,” Mr Mitchell said. “We must find the will to put aside differences in political interest and collaborate to save our nation by strengthening our institutions and implementing social reforms before we descend into total anarchy.”

This newspaper agrees with Mr Mitchell on this and other issues he championed during his two years of leadership, which are now bequeathed to his successor, CEO of the JMMB Group, Keith Duncan. Mr Duncan, however, has other matters to add to his plate if the PSOJ, as an umbrella private-sector group, is to be successful in its advocacy and if he is to accomplish the agenda he set himself.

A glaring inadequacy of the PSOJ, which Mr Mitchell didn’t address, or did so without success, is its absence of research capabilities, which, too often, gave its advocacy a tone of special-interest pleas absent of empirical foundations. This is a matter to be urgently tackled so as to provide the organisation with its own data, analyses and interpretation on its areas of interests, as well as helping Mr Duncan with the advancement of his agenda.

The PSOJ, for instance, has declared that among its strategic interests is “collaborating with the private and public sectors to continue to identify key enablers of economic growth”. This is an important mission, which suggests that the PSOJ plans to engage the Government on and, where necessary, seek to persuade it to adopt alternative policies. Sometimes that may require the administration giving more and better particulars on its actions, such as the Supplementary Estimates the finance minister, Nigel Clarke, recently tabled in Parliament.

ECONOMIC REFORM PROJECT

We embrace the economic reform project that Jamaica, across administrations, has pursued for the better part of seven years, including the imminent successful conclusion of the US$1.6-billion standby arrangement with the International Monetary Fund (IMF). Our single disappointment is that the fiscal and other adjustments haven’t translated to robust growth. We are finding it difficult to achieve real growth of two per cent a year.

It is increasingly apparent that there is the need for specific growth-inducing initiatives, which, in the absence of deeper explanations, calls into question Dr Clarke’s recent strategy. He increased the Government’s Budget for the current fiscal year by J$50.15 billion, or 6.2 per cent, to J$853.3 billion. Ninety per cent (J$45.5 billion) of the increase will go towards debt servicing, which will reach approximately J$320 billion, or an increase of 16.5 per cent. Debt servicing will move from around 34 per cent of the original Budget to more than 37 per cent. It’s not, on the face of it, a stimulus.

We appreciate the contribution that the aggressive paydown of Jamaica’s debt – from nearly 150 per cent of GDP to just under 100 per cent – has made to the macroeconomic stability Jamaica now enjoys. Stability, though, is to a larger end – growth, employment and development.

This newspaper subscribes to the precept of the private sector as the primary engine of growth, but also to the Keynesian imperative that sometimes Government has to prime that engine to prevent it stalling. Mr Duncan, in his roles as PSOJ head and chairman of the Economic Programme Oversight Committee, might have something to say on this.