Jamaica needs deeper understanding of economy – PIOJ
THE PLANNING Institute of Jamaica (PIOJ) launched its Inclusive Growth Index Framework (IGIF) which will track the island’s social and sustainability progress annually, as a means of capturing new growth areas in the society overlooked by the main indicator — gross domestic product (GDP).
According to findings from the IGIF, Jamaica’s ranking in terms of inclusive growth surged from eighth in 2015 to second place among its Caribbean peers within just one year, a trend not accurately reflected by GDP alone.
Kellie-Ann Murray, a specialist economist at the PIOJ, emphasised the need for a more comprehensive understanding of the economy, highlighting the IGIF’s role in providing valuable data-driven insights.
Murray defined inclusive growth as an expanding economy where all segments of society have equal opportunities to contribute and benefit, with due consideration for environmental sustainability.
“The IGI will provide a bird’s-eye, data-driven view of the economy that does not currently exist and is needed,” said Murray at the launch yesterday at the PIOJ’s head office on Oxford Road in Kingston. “A deeper understanding of the economy is critical.”
While GDP will still be used as a measure, the IGIF will offer a more nuanced perspective and be regularly updated on the PIOJ’s website.
This transparency aims to bridge the gap between government policies and the concerns of marginalised communities.
“There was a need to help build trust between government and the economically, socially and politically excluded members of society, who may not see their concerns clearly reflected in the primary indicator, which is the GDP.”
Consultant Adrian Tate of PwC Jamaica underscored the index’s value in providing policymakers with hindsight, insight, and foresight, facilitating evidencebased decision-making.
The index currently spans a 15-year period to 2018. By April, however, the technocrats aim to update the index to 2022 levels, based on an expected influx of outstanding data external to the PIOJ. The PIOJ’s website, however, will have details of the composition of the index, its ranking information and presentations by today.
The index is comprised of seven welfare factors, which are then further broken down into 44 outcomes. Each outcome is weighted to show the greatest impact on society.
This will give planners some degree of predictability when choosing between the allocation of scarce resources, according to consultant and former Director General at the PIOJ, Dr Wesley Hughes, in his address at the launch. Hughes explained that during times of economic shocks, certain sectors tend to see reductions in government spending.
“The most critical thing for me is that now most of these decisions can be evidence-based,” said Hughes. “You now have the tools that can be marshalled in such a way to give the policymakers comfort, so that when they make decisions it will be in line with what they expect, and want to see; and based on evidence, and not feelings,” he related.
“It is incredibly important to have an index like this,” said economist Dr Damien King. “With proper communication and marketing, this is going to be a driver of economic policy.”
King was involved in a peer review of the index.
As the first of its kind and tailored specifically to Jamaica’s requirements, the IGIF aims to provide a framework that can be customised by other nations seeking inclusive growth.