Create inner-city wealth

Everton Pryce, Contributor

I LIKE the tone of your editorial 'Awaiting a vote of confidence' (November 15), bemoaning (not for the first time) the "decay of what used to be the prime commercial and administrative centre of the city", and lauding Digicel for its $200-million investment in the rehabilitation of the market district downtown, and for taking the bold and sensible decision to construct in the inner city its new headquarters for its Jamaica operations. Mega companies like Digicel, GraceKennedy and others located downtown will prosper because they all subscribe to basic business logic - a coherent strategy for development begins with finding a compelling competitive reason for locating in the inner city.

I sympathise with your lamentation over successive governments' penchant for substituting decisive action in the renewal of downtown with 'pretty talk'. But apart from any expectation we might hold, expecting the Government to tackle urgently the crime monster downtown to create the breathing space for businesses to flourish, we will wait in vain expecting the Government of Jamaica to 'catch' the vision laid out by companies like Digicel.

Revitalise the inner city

The sad reality is that efforts by successive governments to revitalise the inner city of Kingston have failed despite the investment of substantial resources. Past efforts have been guided by a social model of development built around meeting the needs of individuals. In fact, aid to our urban conurbations has largely taken the form of relief programmes such as income assistance, housing subsidies, food stamps, etc., all of which address highly visible and real social needs. Programmes more focused on economic development, on the other hand, have been fragmented and ineffective. Subsidies, expensive efforts to stimulate economic activity in tangential fields such as housing, real estate and community development have all failed because they lacked an overall strategy.

To my mind, such programmes have treated the inner city as an isolated island from the surrounding economy and subject to its own unique laws of competition. They have encouraged and supported small, subscale businesses designed to serve the local community but ill-equipped to attract the community's own spending power. I am not sure the Government would admit this, but the social model has inadvertently undermined the creation of economically viable companies downtown. Without such companies and the jobs they create, the social problems will only worsen.

Running out of time

As a society, we are running out of time. If we are to revitalise the inner city of downtown Kingston, then we must adopt a radically different approach. I am fully in support of those social programmes that play a critical role in meeting human needs and improving education, but such programmes must not undermine a coherent economic strategy. The question we should be asking is how inner-city based businesses and their potential for employment opportunities for inner-city residents can proliferate and grow. My own view is that a sustainable economic base can be created in the inner city, but only through private, for-profit initiatives and investment, based on economic self-interest and genuine competitive advantage.

Once and for all, let us stop trying to cure the inner city's problems by perpetually increasing social investment and hoping for economic activity to follow. Instead, the new economic model must begin with the premise that inner-city businesses should be profitable and positioned to compete on a regional, national, and even international scale. These businesses should be capable not only of serving the local community, but also of exporting goods and services to the surrounding community. The cornerstone of such a model is to identify and exploit the competitive advantage of the inner city that will translate into truly profitable businesses.

Our policies and programmes have fallen into the trap of redistributive wealth. The real need, as I see it, and the real opportunity, is to create wealth.