Government must be pragmatic

Chris Tufton GUEST COLUMNIST

Divest prisons, School Feeding Programme and examination depots

The recently announced estimates of expenditure by the Government of Jamaica confirms what many of us knew all along. Jamaica, for the last two decades, has had at the core of its budgetary process the need to commit the bulk of its revenue flows and its loan receipts to paying creditors and financing housekeeping matters. We have grown accustomed to budgeting to pay our creditors.

We have been caught in a debt trap and our fortunes are linked to the dictates of those who lend or have the capacity to influence lending. These are the multilaterals led by the IMF, but supported by the Word Bank and IDB.

In our latest bout of IMF conditionalities, it is also important that the Government understands that the IMF agreement may be necessary, but NOT sufficient to achieve the job-creating economic growth that we must view as a national priority for our people - in the short and medium term.

Jamaicans have now become the victims, as opposed to the beneficiaries, of the political 'run-wid-it tendency'. Between devaluation and limited government-sponsored community projects, many Jamaicans are feeling the pinch.

The country no longer wants to hear about the need for sacrifice. We've been experiencing it for a long time. Nor do they want to hear too much about who is to blame. In case we missed it, they are blaming the system and those of us who have managed that system over the past 40 years.

GIVING HOPE WITH SPECIFICS

The Jamaican people are looking for hope and a light at the end of the tunnel. They want to hear, in the Budget presentation from the prime minister and other leaders, about the opportunities that exist for investment and growth and who or what can get them there in the fastest possible time.

We must shift the psyche of the budgetary process from making sacrifices to pay creditors, to efficient management to facilitate growth opportunities. We need specifics, targets, and timelines for efficient investment inducement strategies. Jamaica needs a dose of pragmatism and leadership that thinks out of the box to move the country forward.

Confidence is critical for investment decisions. Not all investors have the same outlook and, therefore, same levels of confidence and willingness to invest. In light of the need to get economic activity going, Government, at the level of Cabinet, needs to be pragmatic and prioritise investors with ready investment proposals within three months. The JLP administration under Bruce Golding had made that commitment, and this should be followed up on.

The upside to this is that it focuses Government's attention on getting things done and on the growth agenda. Handled at the level of Cabinet, it joins up government so departments and agencies across ministries can work together. Importantly, also, it will assist the reforming of the public sector to get approvals of projects quickly.

DIVESTING OF NON-CORE ACTIVITIES

In the past, governments have tried to be all things to all men, and that's an impossible prospect. Oftentimes, political expediency or political philosophy is the motivation for Government to deviate from its core function of infrastructure provisions (health, education, water, roads, security) and engage in activities that are best suited for the private sector.

Those ideological lines no longer exist, and there is an opportunity in this IMF agreement to justify fast-tracking divesting many of these activities. The core benefit, however, is better value for money.

Two examples of these government entities that should be divested are the Nutrition Products Limited and the Government examination depot. The fact is that a private contractor, subject to oversight, would be far more efficient in administering the meals under our School Feeding Programme and operating national motor vehicle testing in accordance with national policy and oversight at these examination depots. In both these examples, under state management, there has been the incidence, uncovered either by the police or the Auditor General's Department, of waste and/or corruption.

Government should announce an immediate programme, with timelines, to divest itself of all of these non-core activities.

PUBLIC-PRIVATE PARTNERSHIPS

But also, let's think out of the box and look at core activities that can benefit from private-public partnerships (PPPs). Already we are doing this with the Kingston to Ocho Rios leg of Highway 2000. Why not sewage-treatment facilities, water-supply schemes, and even our prison system? We would not be unique in this regard. It happens elsewhere in the world and represents an opportunity for governments that are cash-poor and require critical infrastructure development to facilitate growth and development. The Development Bank of Jamaica should be challenged to get on with it and be given six months to package investment opportunities in this area.

EXPORT COMPETITIVENESS

Export competitiveness is not just a consequence of exchange-rate adjustment, and, in fact, our high import dependence sometimes makes us worse off as consumers and investors if we can't create value to compete within markets abroad or locally with suppliers from abroad.

In this regard, Government needs to align its trade policies more closely with initiatives for the enhancement of domestic industry competitiveness.

Over the past two decades, Jamaica, usually as a member of CARICOM, has embarked on a trade liberalisation policy, facilitating partial or full trade agreements with a range of countries, and in the case of the EU, a major trading bloc.

Countries such as Venezuela, Colombia, Cuba, Costa Rica, and Dominican Republic are a few of our bilateral trade partners. Discussions are now taking place with Canada, and, of course, the Economic Partnership Agreement with Europe is currently being implemented. The fact is that Jamaica has seen greater trade deficits as a result of these trade rules than trade surpluses.

Let's be clear: We cannot oppose free trade, but we must prepare ourselves to confront and benefit from it. A newly signed trade agreement is not an achievement in itself but rather the economic benefits that should be derived from such an arrangement.

There is a disconnect between our foreign-policy thrust towards these trade agreements and trade rules, and our domestic policy initiatives to help our entrepreneurs to benefit from increase access to these markets.

In the interests of a growth agenda, in this Budget, the Government should announce its intentions to focus trade policy on critical initiatives for domestic competitiveness.

RETRAIN UNEMPLOYED

Official unemployment figures are approximately 14%, with youth unemployment closer to 30%. This contributes to the hopelessness and despair in our society. Government must move to restore hope among this critical age cohort.

Government must prioritise getting detached unemployed young people back into some sort of training or retraining programme. This should be skill based but also focused on discipline and entrepreneurship.

Our current curricula oftentimes misses the priority that should be placed on discipline, technical skills training, and entrepreneurship. This country needs a transformation in its attitude towards education and training and towards work. Let's begin now. It requires a partnership.

In addition, the time has come for unemployment benefits, which includes crash programmes for the unemployed and underemployed, to be converted to training and retraining initiatives.

I would prefer to pay an unemployed youth to learn a skill that is demanded by the job market and to appreciate the benefits of a positive attitude towards work and discipline, than to provide temporary relief through short-term non-productive endeavours.

Dr Chris Tufton is a former minister of government and currently co-executive director of the Caribbean Policy Research Institute, a policy think tank based at the UWI. Email feedback to columns@gleanerjm.com and cctufton@gmail.com.