Jamaica Gleaner

Public-sec­tor re­form in Ja­maica

- Alvin Wint Jamaica · New Zealand · European Union · Arbeidersparty · Bruce Golding · Portia Simpson-Miller

ALL OVER the world, gov­ern­ments are fo­cus­ing on trans­form­ing, re­form­ing, or mod­ernising their public sec­tors to more ef­fec­tively achieve what should be the fun­da­men­tal goal of ev­ery state, which is to im­prove the qual­ity of life of its cit­i­zens and res­i­dents.

Stan­dard re­form pro­pos­als in­clude im­proved fo­cus on ar­eas in which Gov­ern­ment adds great­est value to the so­ci­ety, de­cen­tral­i­sa­tion of au­thor­ity to im­prove the speed and qual­ity of de­ci­sion-mak­ing, im­proved ac­count­abil­ity with a fo­cus on per­for­mance out­comes, re­formed com­pen­sa­tion struc­tures in the di­rec­tion of merit-based per­for­mance, greater lev­els of tech­no­log­i­cal ap­pli­ca­tion, and align­ment of the size and cost of the public ser­vice to the needs and ca­pac­i­ties of so­ci­eties and economies.

Ja­maica has been in a re­form process for more than two decades. The most re­cent inflexion points on Ja­maica’s re­form jour­ney can be traced to 2009 when Prime Min­is­ter Bruce Gold­ing es­tab­lished the Public Sec­tor Trans­for­ma­tion Unit (PSTU), led by Pa­tri­cia Sin­clair-McCalla, whose work was over­seen by the Con­sul­ta­tive Mon­i­tor­ing Group, chaired by Peter Moses; and 2014, when Prime Min­is­ter Por­tia Simp­son Miller es­tab­lished, un­der the oper- ational lead­er­ship of Ve­niece Pot­tinger Scott, the Public Sec­tor Trans­for­ma­tion and Mod­erni­sa­tion Pro­gramme, which rep­re­sented an amal­ga­ma­tion of the PSTU and the pre­vi­ously es­tab­lished Public Sec­tor Mod­erni­sa­tion Di­vi­sion.

The work of the PSTM is over­seen by the Public Sec­tor Trans­for­ma­tion Com­mit­tee, chaired by Pa­tri­cia Fran­cis, which, in turn, re­ports to the Public Sec­tor Trans­for­ma­tion Com­mit­tee of Cab­i­net, chaired by Prime Min­is­ter Simp­son Miller.

SIZE NOT THE IS­SUE

At both of these inflexion points, there were calls for Gov­ern­ment to cut the public sec­tor down to size. Both ad­min­is­tra­tions re­sisted these calls. The tech­no­cratic units es­tab­lished as cat­a­lysts to the re­form process sup­ported both po­lit­i­cal ad­min­is­tra­tions in re­ject­ing job cuts as the main agenda and out­put of this process. In­deed, as seen in the ta­ble be­low, Ja­maica’s prin­ci­pal public-sec­tor re­form chal­lenge is not the size of the public sec­tor.

Note that Ja­maica has the small­est public sec­tor as a pro­por­tion of the labour force (em­ployed and un­em­ployed) of the coun­tries in the group­ing. It is no­table that this group in­cludes New Zealand, which is widely

ac­knowl­edged as the coun­try that has been bold­est in re­form­ing its public sec­tor.

While Ja­maica is a world leader with re­spect to the small size of its public sec­tor, it is also a world leader with re­spect to the cost of the public sec­tor rel­a­tive to na­tional earn­ing ca­pac­ity.

For ex­am­ple, in 2012, the av­er­age ra­tio of the public-sec­tor labour force to the to­tal labour force among coun­tries in the Euro­pean Union was 16 per cent, and the av­er­age wage billto-GDP ra­tio in these coun­tries was 11 per cent. In that same year, Ja­maica also had an 11 per cent wage bill-to-GDP ra­tio, but in Ja­maica’s case, this ra­tio cov­ered only 9 per cent of the coun­try’s labour force. See Euro­pean Econ­omy: Gov­ern­ment Wages and Labour Mar­ket Out­comes, April 2014 at http://ec.europa.eu/econ­omy.

But Ja­maica’s public ser­vants are not well re­mu­ner­ated in ab­so­lute terms. Re­mu­ner­a­tion lev­els in the Ja­maican public sec­tor are sig­nif­i­cantly be­low the lev­els that ob­tain in other coun­tries with which Ja­maicans are very fa­mil­iar. Ja­maica’s rel­a­tively high wage-to-GDP bill oc­curs not be­cause Ja­maica’s wages are high, but be­cause Ja­maica’s GDP is low as a con­se­quence of the econ­omy grow­ing at a very slow pace over the last four decades.

Fur­ther, Ja­maica’s public ser­vants are stretched, and stressed, be­cause there are fewer of them than is the case in other coun­tries, and many, whether in the ar­eas of law en­force­ment, health, ed­u­ca­tion or the cen­tral public ser­vice, are con­fronted with sig­nif­i­cant chal­lenges and lim­i­ta­tions on the avail­abil­ity of sup­port ser­vices and goods. Wage re­straint is not a sus­tain­able strat­egy un­der these cir­cum­stances.

The chal­lenge is that there are only three ways to com­pen­sate a public sec­tor. It is the rare gov­ern­ment that can com­pen­sate its public sec­tor from prior sav­ings. The more com­mon ap­proaches are from cur­rent na­tional earn­ing ca­pac­ity and from fu­ture earn­ing ca­pac­ity by bor­row­ing.

For many years, in the ab­sence of ad­e­quate cur­rent earn­ing ca­pac­ity, Ja­maica bor­rowed from fu­ture earn­ing ca­pac­ity to pay public ser­vants, pay off li­a­bil­i­ties of the State which, in some cases, were only recog­nised long af­ter they were cre­ated, and re­spond to na­tional catas­tro­phes. Ja­maica has bor­rowed so much from fu­ture earn­ing ca­pac­ity, which earn­ings did not ma­te­ri­alise, in part be­cause of the dis­in­cen­tives to growth cre­ated by too much bor­row­ing, that in 2013, it had one of the world’s high­est debt-ser­vic­ing obli­ga­tions and the Gov­ern­ment of Ja­maica was on the precipice of be­ing closed off from in­ter­na­tional and na­tional cap­i­tal mar­kets.

DE­FAULT DETRI­MEN­TAL

Be­cause the ma­jor­ity of Ja­maica’s debt is held by Ja­maican in­di­vid­u­als and in­sti­tu­tions, debt de­fault would trig­ger a par­tic­u­larly de­bil­i­tat­ing, and im­me­di­ate, fi­nan­cial and eco­nomic cri­sis.

It is against this back­ground that the chal­lenge of public-sec­tor trans­for­ma­tion is po­si­tioned. A first pri­or­ity for public-sec­tor trans­for­ma­tion has to be the broad-based re­ori­ent­ing of the public sec­tor as fa­cil­i­ta­tors of in­vest­ment and trade in or­der to move Ja­maica on to a sus­tain­able growth path.

The small econ­omy of Ja­maica can­not grow at rea­son­able rates if do­mes­tic and for­eign in­vest­ment is not at­tracted and trade is not ex­panded. While pri­vate cap­i­tal is best po­si­tioned to drive the pro­cesses of in­vest­ment and trade, the public sec­tor has a crit­i­cal fa­cil­i­ta­tory role to play.

A sec­ond trans­for­ma­tion pri­or­ity is im­prove­ment in cus­tomer ser­vice, ef­fec­tive­ness, and ef­fi­ciency of the public sec­tor. The ob­jec­tive is that ev­ery citizen of the coun­try sees an on­go­ing process of im­prove­ment in his or her in­ter­ac­tion with the State, with all public ser­vants see­ing their roles as seek­ing to im­prove the qual­ity of life of all.

The fo­cus on im­prove­ments in ef­fec­tive­ness and ef­fi­ciency of the public sec­tor re­quires, at all lev­els, a per­for­mance-based, goal-ori­ented ap­proach that is driven by the achieve­ment of out­comes and not the en­gage­ment in ac­tiv­i­ties. Im­prove­ments in cus­tomer ser­vice and the ef­fi­ciency and ef­fec­tive­ness of the public ser­vice have to be en­abled through a broad em­brac­ing of tech­nol­ogy across a tech­no­log­i­cally joinedup public sec­tor.

A third pri­or­ity of trans­for­ma­tion has to be the ju­di­cious man­age­ment of the cost of the Ja­maican public sec­tor in light of the coun­try’s cur­rent cir­cum­stances. The ju­di­cious man­age­ment of cost ought not to in­clude as an ob­jec­tive the re­duc­tion in the size of the public sec­tor, but rather, a con­tin­ued align­ment of public ser­vice cost with eco­nomic ca­pac­ity. This would hap­pen with a re­newed fo­cus on re­leas­ing re­sources through the nar­row­ing of the State’s ac­tiv­i­ties to those oper­a­tions that can be ad­min­is­tered by no other sec­tor.

This fo­cus must also con­tinue to be ex­tended to iden­ti­fy­ing ar­eas of op­er­a­tional cost re­duc­tion to fa­cil­i­tate the re­al­lo­ca­tion of re­sources to the ar­eas most likely to as­sist in eco­nomic growth and the im­proved qual­ity of life of the cit­i­zenry. This will in­crease the prob­a­bil­ity that the en­tire public sec­tor will be able to ben­e­fit from ad­e­quate and sus­tained re­mu­ner­a­tion lev­els and re­source avail­abil­ity in fur­ther­ance of the public sec­tor’s goal of en­hanc­ing na­tional wel­fare.

These are the pri­or­i­ties of the cur­rent public-sec­tor trans­for­ma­tion process in Ja­maica. There have been achieve­ments in each of these pri­or­ity ar­eas, but much more must be done right across the public sec­tor.

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GUEST COLUM­NIST

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