In reflecting on the magnitude of Jamaica’s present social and economic problems, one cannot help but reminisce about the historical context of the tragic economic, political and social path the country has taken. The results, we witnessed as our present political leaders struggled to justify the unpopular decision to tax salt, syrup, noodle soup mix, computers and books.
Prime Minister Bruce Golding is reported to have acknowledged that the present hardships being levied on Jamaicans are unavoidable as his administration had no choice. The purchasing power of the Jamaican people has taken another precipitous decline.
Not having any alternatives today is the result of many decades of ill fated policy options. Many of my countrymen have never experienced a Jamaica that was without significant economic and social hardships. Neither can Jamaicans be comforted about the future considering that the present administration underestimated and were unprepared for the current global economic crisis.
Even in the best performing global economy the country continued to face development challenges denying itself the opportunity to build safety nets.
Our elected officials must become more proactive in analyzing and understanding economic trends toward preemptive policy adjustments and implementation before situations demand urgent action. Proactive measures are particularly important because of the vulnerabilities of the island’s fragile economy.
It is the leadership’s inability to foresee the effects of globalization and market liberalization that have allowed the decimation of most of the country’s manufacturing, financial and agricultural industries. As a result its economic performance remains relatively anemic when compared with other countries in the region.
It is for these reasons that each budget cycle the government is confronted with the difficulty of sourcing funding for public expenditures. The government is a serious competitor with the private sector for capital that should be going towards private investment. The resulting high cost of money is just one of the disincentives for entrepreneurs to take investment risks.
The private sector can be a crucial partner for helping to achieve stated public policy goals. However, in return, the government should adopt a more cooperative stance towards enhancements in the business environment. A robust private sector is a fundamental necessity if the country is to emerge from the decades of policy mishaps. It is the private sector which will deliver increase in the tax revenues, employment, trade volumes and employment.
Increasing productivity is a mandatory part of any plan to reinvigorating the economic landscape. Reducing the cost of money to these investors along with more liberal business policies can act as a stimulant to economic expansion and new investments towards both increased production and employment.
All indications are that the country should be prepared for more austerity, so every effort should be made to induce investments. In order to compete for these investment dollars the government must repackage the country’s positive attributes and address immediately the growth of crime, corruption and bureaucratic red tape with more effective policies.
The country cannot continue along the same circular path it has been traveling for decades with short term temporary patches using increasingly higher taxes or searching for more loans. More taxes and loans do not effectively address the decades of perceived misguided public policies, feeble economic and political leadership and widespread corruption throughout government.
The entire country must take seriously the goal of rebuilding Jamaica – a monumental nation building endeavor to recalibrate a long term strategic plan. If the prime minister is serious about placing the country’s business ahead of political partisanship then he should mandate immediate steps to start reforming the political, judicial and security system. The state machinery must work in support of the economic engine and the public. A more inclusive democratic model would allow for greater engagement and consultations of the opposition, industry representatives and other interested special interest prior to important policy changes.