Public affairs: Crime's growing zone of opportunity

Claude Clarke, Sunday Gleaner Columnist

It is contrary to the nature of man to be idle. The old caution passed from parent to child throughout the ages, 'the devil finds work for idle hands', is based on this basic premise. People who are not engaged in working or learning will nevertheless be somehow engaged.

It is this fact that makes the non-engagement of such a large percentage of the Jamaican population in any visible, legitimate employment so alarming. My recent article, 'Development is about people', stated that Jamaica employs only 41 per cent of our population, while Trinidad and Tobago, Barbados, Costa Rica and the Dominican Republic have managed to employ higher proportions; as much as 63 per cent in the case of Barbados. However, that difference is somewhat overstated, as it is based on information from different sources using different methods of measurement.

But the difference continues to be significant and alarming when a common standard of measurement is used. Based on International Labour Organisation data, only 38 per cent of the total Jamaican population was employed in 2010, while 49 per cent of Barbadians had jobs. And although a much larger proportion of the Jamaican population is under the age of 15 (30 per cent, as opposed to 22 per cent for Barbados), it is nonetheless alarming that Jamaica has not been able to provide jobs for as much of our population as Barbados has.

Not only is Jamaica's employment performance lagging behind that of our more successful neighbours, we are also failing to keep up with our past performance. The percentage of our population that is employed today is almost eight per cent lower than was working in 1990. This is some 70,000 fewer persons than would have been employed if we had maintained the same percentage of jobs to our total population.

more hands for 'devil'

This decline represents much more than Jamaica's employment deficit. It also represents 70,000 additional pairs of hands available for the 'devil's' use. No wonder we have the runaway crime rates we face today. This is the principal problem which has paralysed our country in the last 20 years: the frightening failure of our economy to preserve existing jobs and create incremental employment to provide legitimate occupation for our people.

Nearly everyone agrees crime is the major obstacle to our country's economic progress. What we seem less willing to accept is that lack of economic progress is principally responsible for our out of control levels of crime. The negative employment gap between Barbados and ourselves, and between Jamaica of 1990 and 2009, is substantially reflected in the difference in the levels of crime as exemplified in the respective murder rates. Jamaica's murder rate has trebled between 1990 and 2009. It is now three and a half times that of Barbados' and almost five times the level in Costa Rica. Our society is decidedly more disorderly and much less peaceful. This translates into the lowering of our social capital, which further reduces our competitiveness as a country.

This difference between the number of persons who need employment, and the number employed, provides the fodder on which the menace of crime feeds in Jamaica and creates a zone of opportunity for the 'devil' to promote his work. A drive through any depressed community in Jamaica between 7 a.m. and 9 a.m. on any working day sees dozens of young persons of working age lounging on the corner or sitting on a wall with nothing to do but wait on the 'devil' to recruit them.

With life expectancy growing and retirement being delayed, the need to create increasing opportunity for legitimate economic occupation has become ever more important. Unless we create opportunities for our active people to be occupied, our economy and our society will be bedevilled by lawlessness and disorder. It is imperative that Government address this challenge with all the force, energy and resources at its command. Economic policy must be developed around the creation of jobs.

job-creation value

Not every investment has the same job-creation value: those with the highest employment potential should be pursued most vigorously. Every project can be made more or less labour-intensive. Our circum-stances demand that we organise our projects to be as absorptive of labour as is possible, without sacrificing efficiency. And the Government must take the lead. Major infrastructural development projects such as the US$400-million Jamaica Development Infrastructure Programme should be organised with a view to maximising the use of labour without sacrificing efficiency and quality.

One important step in orienting policy towards job creation would be to reorganise the Ministry of Labour to be a proactive job promoter and the minister to be a jobs czar. The conventional preoccupation with industrial dispute resolution pursued by the ministry for decades is an anachronism in the context of a development-focused economy, and its focus should now be placed on playing a really meaningful role in job creation and economic development.

JAMPRO's investment-promotion programmes should be required to interface with the labour ministry to provide an opportunity for the ministry's job-creation role to be accommodated.

Economic policy needs to be built on a recognition of the reality that it is production, not consumption, that will spur our economy to growth and job creation. Consuming goods and services that are produced by foreign workers adds little to the strength of our economy. Logically, therefore, macroeconomic policy must be organised to enhance the competitive advantage of Jamaican production, both in the domestic and overseas markets, and must encourage exporting rather than importing.

In this regard, the continuous rise in the foreign-currency cost of Jamaican production, and the relative fall in the Jamaican-dollar cost of imported consumer goods against equivalent local goods, can do nothing but retard Jamaican production and harm the security and creation of Jamaican jobs.

In a radio interview this week, the finance minister, basking in his success of reducing the interest rate on a US$400-million commercial debt by 380 basis points, correctly cited the cost of energy and capital as two obstacles to be overcome before we can truly be set on a path of growth. But he again omitted the obstacle that overwhelms all others: the uncompetitive pricing of Jamaica's productive output guaranteed by the increasing uncompetitiveness of our currency.

Politicians of both parties will not address this problem because of its political toxicity. The political rewards of the short-term capacity of our overvalued currency to feed our appetite for consumption of imports, and the almost certain political punishment that awaits anyone who diminishes this indulgence, rule out the possibility of the politically craven doing the economically prudent thing, at the risk of losing office.

boost business

The International Monetary Fund (IMF) is also not anxious to affect economic policies in a way that could reduce the capacity of the Government's Jamaican-dollar tax revenue to service its foreign debt. And a significant section of the local business community believes that its interest lies in the ability of an overvalued Jamaican dollar to boost business.

But the Government's job is to lead. And the people's real interest, not their short-term indulgence, is to have the jobs that will flow from increased demand for Jamaican production, which the competitive pricing of our production will foster. This outcome is highly unlikely with Government's present eco-nomic policy framework.

Minister Shaw correctly identifies the need for competitively priced energy as an imperative for economic growth, but there is no policy with the imagination and creativity that can achieve this result anytime soon. There is no clarity about the pricing of the chosen energy source or even a proper economic rationale for the choice of liquefied natural gas as the principal source for generating electricity. Even the most optimistic estimates cannot project prices being brought below US 10 cents per kilowatt-hour, which they must, if we are to be competitive.

Interest rates, though lowered, will not have the desired effect on productive investments and job creation because the overall economic environment remains uncompetitive. Additionally, despite the fanfare accompanying the finance minister's success in reducing interest rates, the banks have managed to convert their lost interest income to gains in fees to maintain returns that are more than double those of many of the world's most powerful banks.

The IMF will no doubt encourage the Government to pursue a growth strategy based on providing special financing windows and targeted production initiatives in the hope that these oases of special attention will thrive in the hostile environment with which the rest of the economy contends. But they will very soon learn that unless the overall economic environment is made competitive, those efforts will fail, and the resources used to build their protective cocoon wasted.

We must urgently seek to narrow the zone of opportunity for crime created by the idleness enforced on our people by the lethargy of the economy. To generate the economic vibrancy within which the necessary employment opportunities can be created, the Government will have to move away from the failed economic model into which it has been locked for over a generation and steer a new course directed at the creation of jobs as its prime priority. Until we do so, the 'devil' will continue to find work for the thousands we fail to employ.

Claude Clarke is a former trade minister and manufacturer. Feedback may be sent to columns@gleanerjm.com.