Prescriptions for growth, jobs

Jamaica's private-sector leaders remain adamant that defeating crime, taming bureaucracy, reforming the tax system and stabilising the macroeconomic structure are essential to ending the country's long-term stagnation, generate growth and create jobs.

Three of these leaders - Milton Samuda, the president of the Jamaica Chamber of Commerce; Joseph M. Matalon, the president of the Private Sector Organisation of Jamaica; and Professor Rosalea Hamilton, the president of the Micro, Small and Medium-sized Enterprises (MSME) Alliance - were asked to share their views on the urgent requirements to pull Jamaica out of its economic and social quagmire.

The following are some of their prescriptions:

Joseph M. Matalon

The PSOJ's Economic Policy Framework sets out the major impediments to growth as we see them and a concise list of our policy recommendations.

To attain high rates of sustained economic growth and employment, the Government will need to:

Reform the tax system

• Create an enabling regulatory and legal environment.
• Reform industrial, trade and investment promotion policy.
• Ensure macroeconomic stability.

Milton Samuda

Crime

• Unveil the much-promised 'comprehensive crime plan' which seems to have gone up in smoke since the end of the state of emergency.
• Properly equip and otherwise resource the security forces to do their job.
• Corruption
• Immediately implement the recommendation of the contractor general for a statutorily established anti-corruption agency with investigative and prosecutorial powers and authority and, eventually, constitutional protection.
• Implement party funding on a full disclosure basis (not a JCC position).

Bureaucracy

• Reduce the size and influence of Government (starting with the size of the Cabinet).
• Fast-track the public-sector reform process to drive down the cost of Government, eliminate duplication, deter corruption-feeding inefficiencies.
• Remove non-performers and better reward performers.
• Legislate that (project) approvals are deemed granted after three months if an application is properly submitted and meets all legal and technical requirements but the bureaucracy has not fully processed and/or formally approved.
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• Costs of Production (interest rates, energy, security)
• Continue the assault on interest rates. Fast-track the alternative (liquefied natural gas) energy solutions.
• Reduce security costs by driving back crime and extortion.

Taxation

• Introduce comprehensive tax reform (instead of the piecemeal reform we have had to date) designed to drive down the rates of taxation.
• Simplify the system (both in terms of reducing the many types of taxes paid and the difficult processes for paying them). Widen the tax net.

Low Labour Productivity

• In conjunction with the unions, private sector and academia should launch a national campaign designed to lift the level of worker/managerial productivity.
• Attitudinal adjustment and upgrading of skills are necessary.

Education

• Continue and accelerate the pace of the reform of the education and training system.
• Aggressively lift the level of literacy as a start!

Reform labour laws

• Through the Partnership for Transformation, agree to comprehensive labour-market reform with a view to improving the efficient deployment of labour and the competitive production of good and services.

Rosalea Hamilton

The Government needs to urgently implement proposed business measures that have been promised for too long.

For example, simplification of the payment of taxes, the 'One Stop' shop and the secured transactions legal framework to increase access to financing by enabling the use of personal or real property (e.g., cars or accounts receivables) to secure the payment of loans.

• Grants and technical support for training/capacity building and business support services.
• Expand demand for the goods and services of MSME entrepreneurs through targeted spending of the Constituency Development Fund and other public spending.
• Establish investment lending mechanisms/institutions that would be more responsive to the needs of businesses that have difficulty in securing loans.
• Widening the category for duty concessions for tax compliant MSMEs, including MSME associations.
• Revisiting general consumption tax zero-rating categories (for example machinery, chemicals, fertilisers and feeds).
• Completing the process of establishing an MSME policy as a matter of urgency before December 31, 2010.
• Democratise decision making to allow for fair representation and refereeing of the competing business interests.
• Urgently assist in addressing high energy costs, including for MSMEs. Use the Government's 20 per cent minority interest in Jamaica Public Service to renegotiate its agreement with the firm. Government should introduce competition in the industry.
• Immediate grants, duty concessions and technical support to assist our members with energy conservation solutions and retrofit their businesses with alternative energy equipment.
• Expedite the framework required to implement net metering and wheeling.
• Make funding available at interest rates and terms that ensure net savings and do not impair cash flow (for example, annual interest rate at eight per cent for 15 years).