Columns

From bruk-pocket to Porscheperity?

Jamaica's economic turnaround

Canute
Thompson

Tuesday, June 25, 2019

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Renowned and respected Miami Herald journalist Jacqueline Charles, in her June 15, 2019 piece on Jamaica's economic turnaround, opened a can of things. For one Government senator it was a can of “awesome” things; for a business mogul it was a can of must read information. For me, it was a can of a mix of truths as well as some troubling things.

The article is entitled 'Jamaica once couldn't pay its light bill. Now its economy is welcoming Porsche and BMW'.

In my opinion, and in any rational reading of the title, the storyline is that the Jamaican economy has made significant progress from being a “bruk-pocket” economy, unable to pay light bills, to a more financially well-off (aka prosperous) society in which high-end motor cars are the symbols of the prosperity which has arrived. This audacious title could lead one to ask: Prosperity for whom?

Charles catalogues Jamaica's economic journey from 2013 when the then People's National Party Administration laid the foundations for the economic turnaround, quoting outgoing governor of the Bank of Jamaica Brian Wynter, who said that: “What we've seen over the last five, six, seven years are things that nobody thought you could tackle.”

For her part, Charles states: “While the People's National Party — now out of power — started the deep spending cuts and enacted the wage freezes, the Jamaica Labour Party, which came into power campaigning against the austerity, instead built on them.”

In locating the origins of Jamaica's turnaround in 2013, Charles's assertions are in line with those of the International Monetary Fund and the World Bank.

The World Bank, in an April 1, 2019 report posted on its website, states: “In 2013, Jamaica launched an ambitious reform programme to stabilise the economy, reduce debt, and fuel growth, gaining national and international support.”

But with the kind of foundations which have been laid six years ago — and despite the Government's plan of five per cent growth per annum — the economy is growing at less than two per cent per annum.

The World Bank's April 2019 report takes account of this stating: “Stronger and more resilient economic growth is needed to eliminate poverty and boost shared prosperity. Crime and violence levels remain high, emphasising the need to address the issues of youth unemployment, education, and social cohesion.”

In a similar vein, Charles concedes: “While per capita income remains low, at about US$5,144, according to the World Bank, so too is economic growth, which has averaged annually around one per cent since 2013. The fund estimated that the economy expanded by 1.8 per cent in 2018, which is far less than the Dominican Republic's seven per cent, which was the highest in the hemisphere last year.”

Signs of real economic growth and development

The acknowledgement by the World Bank that the elimination of poverty, boosting the sharing of prosperity, containing the crime monster, and addressing deficiencies in the education system, among other things, highlights what ought to be the laser focus of Government's attention through resource reallocation. The similar acknowledgement by Charles about the relatively low levels of per capita income and anemic economic growth underlines what is the larger narrative of the Jamaican recovery story, and thus makes her Porsche and BMW references ill-timed and even insensitive assuming she was not being provocative.

In the absence of a real commitment to address the deficiencies mentioned here, there is a grave risk of continued and possibly worsening social and economic exclusion. The realisation of a worsening social and economic exclusion is worrying and lends to the view of government for some.

In addition to the needs outlined above, there is the urgent need for the Government to be forthcoming about its “prosperity” agenda. The Government promised five per cent growth each year for the period 2016/17 to 2020/21 and has now downgraded his political forecast to be in line with the Planning Institute of Jamaica. The country needs to be told the implications of a 60 per cent reduction in the growth projections for the country, especially for those who continue to live at the margins. It cannot be satisfactory for the Government to simply walk away from this repeated election promise and not account to the people.

In addition to the elimination of poverty, containment of crime, overhauling the education system, raising income levels and propelling economic growth, there are other related issues which must be addressed if Jamaica is to become a truly prosperous society. These issues include the beast of corruption, the malady of low productivity, the chronic disease of lack of public accountability, the stifling and archaic public bureaucracy, the high levels of indiscipline and public disorder, and a dysfunctional justice system. Each of these contributes to all the other problems above, and those who suffer most from these negatives are the black and largely rural and inner-city poor. These realities reinforce classism and exclusion.

In short, the Jamaica Labour Party's 2016 campaign slogan 'From poverty to prosperity' can be heard reverberating in 'from bruk-pocket to Porscheperity'. This storyline, even if unintended, belies the tough realities facing most Jamaicans. The plan to move the country from poverty to prosperity is not to be viewed as having been realised when a few citizens are able to indulge in conspicuous consumption, neither should that promise be seen as fulfilled with a meagre economic growth of two per cent per annum, especially after there was so much fanfare about five per cent. That plan, and that promise, must be tied to specific timelines and publicly enunciated achievement milestones, which are reviewed periodically and tested among a large sample of testimonies and measured objectively. In specific terms we need to hear about the plans for improving services at hospitals, to provide more resources for schools, to produce entrepreneurs, to repair rural roads, to take strong measures to combat corruption, to support small businesses, to develop the knowledge economy, to strengthen food security, and to protect the environment.

So now that the economy is moving in the right direction, these should be next. These are the most sustainable metrics of progress.

Dr Canute Thompson is chair of the People's National Party's Policy Commission, as well as head of the Caribbean Centre for Educational Planning and lecturer in the School of Education, and co-founder and chief consultant for the Caribbean Leadership Re-Imagination Initiative, at The University of the West Indies, Mona. He is also author of four books and several articles on leadership. Send comments to the Observer or canutethompson1@gmail.com.


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