Public Affairs: Awakening the forgotten sector

Claude Clarke, Contributor

Before the birth of our modern political era, the founding president of our first major political party had already begun to tap our people's economic potential by sowing the seeds of entrepreneurship and enterprise among them. Norman Manley, in the 1930s, pioneered the establishment of Jamaica Welfare (now the Social Development Commission) and gave legal leadership to the Jamaica Banana Producers Association (JBPA), Jamaica's first major cooperative, predecessor to the now highly successful transnational enterprise, Jamaica Producers Ltd. Almost a century earlier, George William Gordon's leadership helped to create our first mutual society, Jamaica Mutual Assurance Society, which later became Mutual Life Insurance Company. These initiatives were Jamaica's first ventures into the economic arrangement referred to by economists as the social economy, or the Third Sector, and laid the foundation for the can-do spirit in business which made Jamaica a leading industrial light among developing countries in the 1960s.

The philosophy underlying social economy was one of the principal pillars on which the People's National Party (PNP) was founded: a belief in the empowerment of people through cooperation and enterprise, and the resultant creation of wealth by and for the people in their communities all across Jamaica. This vision inspired and motivated thousands of ordinary Jamaicans, including both my parents, to believe that through the party's leadership, the economic empowerment of the ordinary man could be realised. It was, therefore, natural that in the 1980s, when I became concerned about the seeming inadequacy of economic opportunities for the advancement of the ordinary people, I saw joining the PNP's effort to unseat the then Jamaica Labour Paraty (JLP) government as an irresistible call to duty.

Regrettably, the PNP's 18-year tenure, which followed, then veered dramatically away from Norman Manley's vision. Once in government, the party seemed to have lost its way in the thicket of the orthodox market fundamentalism, which it slavishly adopted. It did this even while other countries in the developing world had already woken up to the destructive effect of that orthodoxy to their development interests. The resulting economic crisis in the 1990s and 2000s crippled the entrepreneurial spirit of the ordinary people and enriched the traditional owners of financial capital both within and outside Jamaica's borders. This was perhaps one of the greatest ironies in Jamaica's political history: the party of Norman Manley destroying the entrepreneurial spirit he had helped to foster in ordinary Jamaicans, to the benefit of the financially powerful.

The senior Manley always thought it was within the power of ordinary people to be masters, not only of their political fate, but also of their economic fortunes. He affirmed that the mission of his generation was to lead Jamaica to political independence in order that those who succeeded him would be able to guide us to economic independence. But, oh how his heirs have failed that mission!

The decades of the 1950s and 1960s were characterised by economic expansion, to a great extent an outgrowth of the spirit of enterprise fostered by the social economy that Norman Manley helped pioneer.

But our economic leadership after the 1960s failed to build on that foundation. During the 1970s, we attempted social reform without economic support and almost a quarter of our economy was wiped away. The 1980s saw economic recovery, but with considerable social neglect. And in the 1990s and 2000s, we drifted haplessly away from Manley's dream of economic independence, creating in the process a dysfunctional society, declining economic opportunity, and a deepening integration of corruption, criminality, and lawlessness into our social and economic life.

Urban centres

Urban drift has increased exponentially as thousands are drawn away from a poverty-stricken rural existence by the mirage of economic opportunity beckoning from the bright lights of the urban centres. But the towns offer little more than a barren employment landscape and crippling poverty. Today, the frustration resulting from these unsatisfied expectations manifests itself in disorder, squalor, and crime-ridden urban streets.

The 34 per cent of Jamaica's population that lived in towns in 1960 has mushroomed to almost 60 per cent today. This is close to 40 per cent greater than the urban population in Barbados, and four times that of Trinidad and Tobago, despite the fact that these countries have combined industrial and service sectors far better able to support urban populations. And Jamaica's urban population continues to grow at twice the rate of our rural population, even while the economy has been deindustrialising.

This trend was already evident when the PNP returned to office in 1989, and one had expected that, given its legacy, the party's economic policies would have been focused on promoting people-centred development aimed at spreading economic opportunity to communities right across the country. But the abandonment of that mission was heralded when in 1991, Manley's son, Michael, declared to a stunned NEC, "The agenda of the 1970s is dead." And with that the party's founding mission to pursue the economic independence of the ordinary people was sidelined and its social objectives subordinated to the interest of capital.

No doubt, Michael Manley had concluded that his resounding rejection at the polls in 1980 was a repudiation of his 1970s' effort to promote a people-centred development strategy.

But Michael's election loss was much less a verdict on the wisdom or worth of the objectives of people-focused economic strategies than it was a rejection of the excessive socialist ideological exuberance which accompanied them, and the gross mismanagement and extreme politicisation that characterised their implementation.

Viable economic model

A people-centred economic development approach such as the social economy is a perfectly viable economic model in the modern world. It has been, and continues to be, central to the successful engagement of the economic potential of the people of prosperous capitalist economies around the world. It includes cooperatives, mutual societies, citizens' associations, and voluntary organisations. Some of the world's largest businesses began as, and many remain today, cooperatives and mutual societies. Land O Lakes, Ocean Spray, and Nationwide Insurance of the USA, all multibillion-dollar companies and leaders in their respective fields, are outstanding examples. Here in Jamaica, the financial-industry component of the social economy, such as the credit union movement, has thrived in an intensely capitalist environment.

The social economy accounts for as much as 18 per cent of economic activity and employment in some advanced European Union countries - almost as much as the combined contribution of tourism, manufacturing, and mining to Jamaica's GDP today. These enterprises are driven principally by social objectives, although today they operate substantially along capitalist business lines. They are found across the full spectrum of business sectors, including agriculture, manu-facturing, finance, distribution, retail, and construction.

Because of its high propensity to create economically rewarding employment in neighbourhoods, a vibrant social economy has proven worldwide to be an effective check on urban drift. It has had a positive influence on family and community stability and social order, ingredients that are essential for maintaining moderate crime levels.

Jamaica's economic development will be severely handicapped if economic opportunity cannot be generated in rural communities and the flood of migration to our congested urban centres is not stemmed. As the inheritors of Norman Manley's vision of people-centred development, a natural agenda of the PNP should be to economically engage and empower our rural people and address the drift to the urban centres, while stimulating economic activity in affected urban communities to reverse their decay.

Critical to this is reversing the economic policies it pursued during its last tenure in office, which undermined entrepreneurship among the ordinary people. Its new policy framework should provide the enabling environment in which people of ordinary means will be able to, individually and cooperatively, establish economic enterprises and create employment for more people at their present, albeit inadequate, skill levels, even while seeking to improve skills through better education and training.

A logical way of achieving this is to stimulate and expand that third economic sector, the social economy, allowing small farmers, artisans, the creative and the entrepreneurial, whose efforts might not be viable individually, to come together to achieve efficiencies, economies, and synergies that will lead to meaningful economic output and competitiveness in the marketplace. For the social economy to thrive, government policy must foster the financial, marketing, technological, and physical infrastructure they need to be competitive and viable.

Given an enabling environment, cooperative initiatives emerge organically among people facing similar economic challenges and opportunities, as was the case with the JBPA over 80 years ago. But in Jamaica today, productive enterprises operating within the social economy, such as the Christiana Potato Growers' Cooperative, are literally dying on the vine because of the apathy of successive governments to the need for policies and institutions that will enable them to build their purchasing, grading, storage, and marketing capabilities, as well as provide the opportunity for them to develop value-added production.

Expanded domestic market

The benefit of the social economy is not limited to the tremendous stimulating and supportive lift it gives to small and micro business. The increased economic activity it generates among ordinary people also provides the private sector with an expanded domestic market and added scope for the growth and expansion of their businesses.

However, it is governance that would perhaps benefit most. With the increased revenues that would flow from the expansion of economic activity, Government would be better able to discharge its responsibility to provide public goods and services. With dormant human capital re-energised and reintegrated into the economy, and with new life injected into decaying rural and urban communities and social capital enhanced, a more peaceful, productively engaged, and more governable society would emerge.

Both the Government and the Opposition must recognise that without opening economic opportunity and upward mobility to the ordinary man, our country will know neither peace nor prosperity. While the PNP's heritage should have prepared it for the challenge of bringing that opportunity to the broad masses of the Jamaican people, the governing JLP should not allow its conservative legacy to deter it from embracing the urgent call to encourage and build a vibrant social economy to fully engage the economic potential of our people.

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