That Jamaica is now all but certain to approach the International Monetary Fund (IMF) for budgetary support is a sign of how things have changed for the lending institution and to a lesser extent, the country.
That is one of the essential points of Prime Minister Bruce Golding’s contribution to the island’s 2009 budget debate.
“We are prepared to engage the Opposition in looking at our options should IMF assistance become necessary and I have instructed the Minister of Finance, the Governor of the Bank of Jamaica and all the government’s technical officers to make themselves available for such discussions,” said Golding.
In the bad old days of the Michael Manley and even the Edward Seaga administrations, the fund was called on for structural adjustment and balance of payments support that made it the vampire that haunted the delivery of social services.
But the IMF now has a kinder, gentler face that recognises that education, health, public transportation and other services that underpin stability and fluidity can’t be sacrificed for the unencumbered free market or wait for Adam Smith’s invisible hand to do its magic.
In fact, people in those places are now acknowledging that the free rein version of capitalism, imbued with salivating greed has catapulted the global economy to the place it arrived at these past months leaving farmers in countries like Jamaica to dump perfectly good local milk to buy cheaper imports or close factories that hired local workers.
Golding’s was not a dramatic presentation harping on an unequal world with rich countries stomping over the poor and the like. It was a sobering presentation built on pragmatism and reality rather than the hoopla of high prime ministerial office or the schizophrenia that make Jamaicans believe theirs is the greatest country in the world when athletes win races at the Olympics even as crime and poverty besiege the island.
The prime minister’s take on Jamaica’s growth in comparison to its Caribbean Community partners for example, shows that his Jamaica Labour Party has controlled its contempt for regionalism as exhibited by founder Alexander Bustamante who believed that Jamaica in a West Indian federal government would be like a hog suckling pigs it didn’t birth.
“In the last four decades the rest of Caricom has grown cumulatively by 173 per cent while the Jamaican economy has grown by less than 25 per cent, leaving us with the fourth lowest per capita income in the region,” Golding told the country from Parliament Tuesday afternoon.
And more: he is looking forward to a planned July meeting in Washington between President Barack Obama and CARICOM leaders to set a tone and agenda for relations between the grouping and the USA.
Indeed, Golding seems to lay much store on hemispheric relations as he is preparing the country to host Latin American leaders later in 2009 to forge some “deeper alliances” as proposed by President Lula daSilva of Brazil at a Latam/Caribbean meeting in December 2008.
While it is a noble ideal to create inter-country and inter-regional alliances at the governmental level – because there needs to be a commonality of policy framework as private capital has gone transnational with no national allegiances – perhaps as much attention should have been given to domestic agriculture that, after all is said and done, can help create stability on the island.
Agriculture, which provides jobs and food to help build the foundation for a healthy population, deserved more specifics than the generalities of the 15 lines, the essence of which was “we can be competitive in both the domestic and export markets. Our soil can grow many more things. It is we who are not making it grow the things it can grow. Improved technology, better management, a more efficient marketing system and virtual and horizontal linkages with other sectors of the economy are the key to achieving growth in the sector.”
It is not an easy job prioritizing in the forest of the economy when the trees of energy, education and health make the others seem invisible. The country’s wind and rivers do not supply enough energy to offset demand for imported fossil fuels needed to sustain a modern economy; and the productive sectors do not generate the income to support the imported fuel. Socialized health and education in an atrophied economy seems to be more debilitating than resuscitative.
So Golding’s dilemma is to not revisit the socialist brigade farming policy that formed the backbone of Manley’s 1970s experiment nor Seaga’s foreign investor-led high-tech gamble that left the country with two hostile agricultural administrations – one in the prime minister’s office and the other in the agriculture ministry. Rather he must free the spirit of business friendliness by cutting red tape to foreign investors, making financing available at lower interest for locals and providing money to stimulate the growth of an entrepreneurial class among the semi-literates being churned out of a broken educational system.
“There are binding constraints to achieving efficiency and competitiveness that must be loosened. There is capacity that must be developed and put to use. There are creative energies among our people that must be unleashed and channeled,” declared Golding.
“We have done enough studies and analyses. We have enough empirical data. We know what needs to be done. What we must now do is to summon the will and find the strength of purpose to get it done. We must act now lest we condemn ourselves and our children to remain forever floundering around the margins of poverty.”
But immediately on sounding that clarion, that horn that we must ditch the habit that makes Jamaica and some Caribbean partners known as “sample” producers (supply of a product ends after the first real order), the prime minister sounded as though he were promising one review, just one last time: “Domestic industries may not earn foreign exchange but if they don’t produce what they produce, we would have to find the foreign exchange to import it. The Minister of Finance along with the Ministers of Industry, Investment and Commerce, Tourism and Agriculture will lead that review and engage all the stakeholders in consultations.”
After the studies and analyses it’s time for review and consultations.
That little slip aside the proposals for a retail investment banking facility that can respond to the financing needs, especially of small and medium businesses (the “process of consultations” to be led by outgoing junior finance minister Don Wehby) and the Youth Entrepreneurship Programme (YEP) to help some of the 25,000 under-educated school leavers to become self-employed, are important goals.
In Obama mode the PM quipped “(t)o the young school leavers who are fearful of the emptiness that awaits them after graduation, the word is ‘YEP, you can!'”
One cannot be faulted for being somewhat disappointed by two comments made with regards implementation time for activities to address energy sustainability and tackling the widespread squatting and land tenure problem – this in the context of the PM having in that sitting of parliament presented the National Development Plan for Jamaica (Vision 2030) and the Medium Term Socio-Economic Policy Framework.
In the matter of energy the prime minister listed as one of his objections to an opposition proposal for pursuing nuclear energy, the long (15-year) time table for its completion. His argument regarding nuclear waste disposal in a small territory is legitimate and probably a valid reason for not going that route. But viewing as a hindrance 15 years of the life of a nation to establish a project for longer term benefit is short sighted.
Similarly, having concluded that a third of the population of 2.6 million are occupying land that does not belong to them in an environment with a land registry system so broken that the government itself does not know the extent of the land it owns, regularizing land tenure, no matter how expensive, is an area that deserves prioritizing.
This is one of the overhangs of slavery that has not been addressed in post-colonial Jamaica. The slums of Kingston that catalyzed the island’s violent crime and garrison politics were direct descendants of the landlessness into which the emancipated Africans were pushed in 1838. Around Kingston and Montego Bay slums emerged around the ends of the railway lines where the journey of the landless ended. For those untitled farmers on Crown lands and other property it meant they could never move beyond subsistence agriculture.
The previous administration introduced the Land Administration and Management Programme (LAMP) as a pilot jointly funded by the Government of Jamaica and the Inter-American Development Bank (IDB) in 2000. According to the Ministry of Agriculture, “the purpose of the project is to support the government in its efforts to establish a dynamic land market that promotes an efficient use of the resource thereby allowing accessibility to all segments of society in a fair and transparent manner.”
Golding correctly is continuing to use LAMP to meet those goals but sees problems.
“Major hurdles to accelerating the programme include the limited number of land surveyors within the government service, financial constraints in engaging private surveyors and the lack of a national cadastral map which is estimated to cost $12 billion and would require 10 years for completion,” he said in his presentation.
Like capital works programmes to build roads, bridges, schools and hospitals, this is a human and physical resource capital project that ought to be brought to the top of the pile and should be one of the areas built into any IMF “stimulus” package the administration may pursue.
Golding spoke developing public/private sector partnerships and noted that “the Minister of Education has come up with a novel idea to invite private investors to build schools which would be leased to the government through long term contracts under which they would manage the physical plant and provide security.”
LAMP is a prime area for such a partnership. Google has mapped almost every inch of North America and there are Jamaican information technology companies that can partner foreigners to cut short the 10 years for surveyors to walk all over the island and the data combined with what exists in the land registry.
Many of those 25,000 potential YEP business people can be drafted into such a project and help achieve the aim of distributing money in the economy.
Something dramatic needs to be done without melodrama. Golding’s temperament in his prime ministerial incarnation, void of the rabid partisanship and ideological posturing of 20-odd years ago, when he served as Seaga’s housing minister may suit him as the right man at the right time for the job – even with the IMF as a partner.