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Andrew Holness, it's time to earn Edward Seaga's mantle

Dorlan Francis

Sunday, November 05, 2017

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The by-elections are over and done. Congratulations to the winners: Dr Angela Brown Burke, Mark Golding and Dr Norman Dunn.

The message coming out of St Mary South Eastern is that the people of that constituency, like a broad cross section of Jamaica, want to give Prime Minister Andrew Holness and his Jamaica Labour Party (JLP) Government some more time to prove themselves.

Holness must come to realise, however, that there is no time to waste. He needs to get on with the growth agenda. The current growth plan of “five in four” is aspirational and laudable. However, this goal will only be achieved if there is a paradigm shift in the way capital is mobilised and used in the country. The current behaviour of the banks will not allow for growth of any significant amounts. Not five in four, not five in eight or 'five in any' number of years.

The truth is that the way money is being managed in Jamaica and around the world does not allow for five per cent growth. The new normal now is for growth of two to three per cent. Four per cent growth in this new dispensation is considered supernormal.

Why has growth, globally, become so hard? It is because our guiding philosophy about the economy has wandered into the realms of stupidity. We are now of the view that the mission of man here on Earth is to make money and accumulate wealth. This utter rubbish has sprung from the minds of greedy people. And, in furtherance of that folly, money is being manipulated in the hope of making more money without making a darn thing. It is when things are made, many things, that explosive growth is possible.

The mission of man is still survival of mankind for as long as possible. In order to achieve this, man needs things that will enhance and lengthen his life. The economy is the ecosystem for man's survival. The economy does not exist so that greedy men will make money. The making of money is and ought to be incidental to man's survival, not the other way around. Growth in the economy, both locally and internationally, has become painful because greedy and selfish men have twisted economic goals to suit themselves. The sad thing is that there need not be this massive human suffering, because the money gods would still make money if they were to do what is in the common good.

As we search for a path that will take us forward, it would be helpful to reflect on our past, analyse our most successful period, and see what lessons we can draw.

Our most successful period was without any doubt the period 1967 to 1972. That was the period when Hugh Lawson Shearer was prime minister. That makes Shearer the most successful prime minister Jamaica has had. Shearer's success was made possible because of Jamaica's dream team Cabinet at the time, which included the giants Robert Charles Lightbourne at trade and industry, and the financial genius Edward Philip George Seaga at finance and planning. Without money, and its proper use, nothing gets done. I therefore have no reservation in saying that Eddie Seaga did most of the heavy lifting at that time and that he is the best finance minister Jamaica has ever had.

In five years this team did more for Jamaica than the other 50 years of Independence combined. The first major accomplishment was the dramatic growth which averaged 7.60 per cent over six years. (See table)

How did this unmatched development of Jamaica occur at the time? Under the industrial leadership of Lightbourne the five industrial estates that were all started by the JLP had most of the factories built during that period. These industrial estates were Tinson Pen, Nanse Pen, Twickenham Park, Albion in St Thomas, and Bogue in St James. A factory was opened every month, and by the end of those glorious years 201 factories were operational in Jamaica.

The Urban Development Corporation (UDC) was established and they literally built Ocho Rios from a little fishing village into the tourist mecca that it has become. Turtle Towers, Mallards Beach, and a number of other hotels were built. UDC did the Montego Bay Freeport redevelopment. The Kingston Waterfront was done during that time. Almost every high-rise building downtown (except the Digicel building) was built during the Shearer era. While that was being done, New Kingston was also being built. As well, most of the shopping plazas on Constant Spring Road were built during that time.

Under the stewardship of David Clement Tavares and later Wilton Hill, some of Jamaica's finest housing was developed. Housing development was significant for the quantity and the quality of the houses that were constructed. The 'city' of Portmore was conceived and was started by the Shearer Administration. By the end of those halcyon days, 1,260 houses were built in Independence City, 200 in Edgewater, 420 in Ensom City, and 180 in Nightingale Grove. Hughenden and Queensborough were built in the Corporate Area along with upscale developments such as Allerdyce, Norbrook, and Alysham. In the rural areas there were Woodlawn in Mandeville, Balmoral in Ocho Rios, Paradise Acres and Ironshore in St. James, and Albion Estate in St Thomas. The style and class of the construction culture was reflected in apartments such as Knutsford Manor, Worthington Towers, Manor Park, Maryfield, Carriage House, Chelsea, Gallery, and Oxford Apartments.

In addition to all of the above, 53 secondary and 126 primary schools were built. Cornwall Regional Hospital was built. The 12.5-million-gallon-per-day water system was built at Tulloch Springs, and the Kingston to Spanish Town highway, with six lanes in some sections, and four lanes in others, was built.

Where did the money come from to make these developments possible? It came from the genius mind of Seaga. Understanding, as did Adam Smith, that for a nation to be wealthy it must have abundant and cheap capital, Seaga's every action was to ensure that Jamaica had the capital it needed for development. His policy of Jamaicanisation resulted in the transfer to Jamaican ownership of foreign life insurance companies like North American Life and Dominion Life. Seaga made possible Life of Jamaica and Island Life to join Jamaica Mutual Life as the giants of the Jamaican life insurance industry.

In my book Life Insurance — The Cause of Economic Prosperity (2009), I show that it was life insurance which made America great, built Japan after it was atomic-bombed, and was the source of abundant cash for South Korea to move from a war-ravaged Third-World country to First-World status in less than 40 years. Prior to my book there was none which spoke to the powerful economic effect of life insurance. I did the research; I looked high and low and could not find any book on the subject.

How did Seaga think of using life insurance to mobilise the capital the country needed, and how could he have known to provide incentive for the sale of life insurance by allowing portions of life insurance premiums to be tax deductible? That was divine inspiration, and the common sense application of an active, thinking mind.

Seaga's policies also allowed for the establishment of Jamaica Citizens Bank. But, most importantly, Seaga as finance minister would not have tolerated the nonsense that is now practised by banks in the name of free markets. Seaga is gifted with what locker room talk would call a BS detector. He is endowed with the ability to recognise crap on sight, and likewise he recognises good ideas in an instant. And he is not afraid to stare down even the mighty International Monetary Fund when it was telling him to follow fools and do nonsense.

Prime Minister Andrew Holness, to truly earn Eddie Seaga's mantle, study the period 1967 to 1972 and do what Seaga did, including not being afraid to tell banks and other financial institutions what they can and cannot do in the interest of the nation. Do not be beholden to the dictates of international financial institutions spouting their dogmas and clichéd expressions. Challenge them, as Seaga did, as you seek to do what is right for Jamaica and the Jamaican people.

 

Dorlan H Francis is a personal financial adviser and author. Among his books is The Economic and Financial Crisis of 2007 — What caused it; how to avoid a repeat . Send comments to the Observer or dhfken@hotmail.com.

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