Time to break the back of bureaucracy

The general election will be top of mind in the coming weeks, and politicians of both major parties will, no doubt, pull out all the stops to win power. In the meantime, there are worrying signs that regardless of who emerges victor, Jamaicans will face tough days ahead. So far, it is the hiatus in the International Monetary Fund programme that is most talked about, as well as the anticipated pain that will flow from measures that are likely to be taken to put the programme back on track.

Apprehension about the prospect of further belt-tightening and dislocation, which are bound to result from job cuts and an extension of the wage freeze in the public sector, will weigh heavily on working people. After all, not long ago when the poverty level was at its lowest point and the unemployment rate had dipped below 10 per cent, it was thought that Jamaica was suffering adjustment fatigue. How much more fatigue must people, especially those at the lower rungs of the economic ladder, be feeling now, as the slump in the economy bears down on them.

let's look at the figures

Yet the focus of those running for office should not be to offer vote-catching, feel-good election promises, but must be on what is to be done to stimulate growth to pull us out of the current economic rut. In this regard, the results of recent Competitiveness and Doing Business rankings undertaken by the World Economic Forum and the World Bank, respectively, are discouraging, as they show dramatic deterioration in the factors that affect productivity, investment, and economic growth in recent years. In fact, the results for 2011 show that Jamaica registered its worst performance ever in both sets of rankings, an indication of the enormity of the challenge ahead.

In overall competitiveness, a key measure of an economy's capacity to survive and grow, we slipped by 12 spots to come in at 107th position, continuing the slide which has seen the country nosedive from 67th position in 2006. In the Doing Business report, we dropped by seven spots to rank 88th, coming from 43rd in 2006, representing six continuous years of decline. Both are dismal results that confirm the reversal of the gains made in earlier years.

Our competitiveness ranking has been dragged down by the harsh macroeconomic environment, including the hike in the public debt, slippage in the country's credit rating, and the plummeting national savings rate. Damage has been done, too, by the insistence of our banks in maintaining interest-rate spreads at ridiculously high levels, despite public outcry and criticism by the Government. Consequently, we have been overtaken by the Dominican Republic and Trinidad and Tobago, and we are now barely ahead of Guyana.

In the midst of this bad picture, there are, however, some important building blocks that would appeal to investors and support expansion of investment and growth. We, in fact, score higher than even some developed nations in terms of our infrastructure, techno-logy readiness, and the state of development of our financial market. In the latter, we rank 46th, way ahead of most countries in this hemisphere. I have been arguing ad nauseam that we are still to put our state-of-the-art ICT infrastructure to work to create new economic activity and jobs.

battling bureaucracy

The slide in our ease-of-doing business ranking - which is a key measure of the Doing Business Report - reflects the high frustration level that ordinary citizens, businesses, and investors experience in Jamaica. While some gains were made in the early 2000s, it has been a continuous slide from 2006, the first year in which Jamaica was assessed in the report. But even as our overall ranking fell in the latest rating, we gained three places in the category 'Dealing with Construction Permits', an area that has drawn some of the heaviest criticism because of the burdensome bureaucracy.

The bureaucracy seems impregnable to the various initiatives that have been undertaken under the public-sector modernisation, as we remain rooted near the bottom of the rankings with respect to paying taxes, registering property and trading across borders.

Just two weeks ago, I got a stark reminder of the time-wasting and humbug citizens must endure in clearing goods at our airports and wharves. To clear a television set at the cargo depot at Norman Manley Airport, a relative of mine had to encounter three sets of customs officers, fill out three sets of forms supplying pretty much the same information on each, and spend an hour and a half.

To add to this, two sets of the forms were only available from 'hustlers' who made it clear that she would have got through in half the time and paid less duty if she had engaged their 'services'. I had to agree with her that Jamaica is not ready for business.

If the political class doesn't show the will to overhaul the bureaucracy, the goals of investment, jobs, growth, and poverty reduction will be difficult to achieve.

Dennis Morrison is an economist. Email feedback to columns@gleanerjm.com.