'PIOJ proposals give bang for the buck'

Former consultant praises growth strategy report

A former consultant to the Planning Institute of Jamaica (PIOJ) has suggested that the Government use some key recommendations contained in a growth-inducement strategy report prepared by the agency as a short-term stimulus package to spur immediate economic growth.

United States-based Stanford University Professor Donald Harris, who headed the PIOJ secretariat that developed the report, said systematic and aggressive implementation of the proposals in at least four targeted areas could move the economy from negative decline to positive growth by the next fiscal year.

Harris, who was speaking at the weekly meeting of the Rotary Club of Kingston at The Jamaica Pegasus hotel in St Andrew, yesterday suggested that infrastructure, farm roads, community renewal and onlending to the small-business sector are some of the areas that should be made priority.

"Spend $14 billion, which can be well handled within the framework of the existing Budget, engage in those projects and you can have an immediate impact in the first fiscal year of an incremental growth rate of 1.5 per cent," he explained.

"Starting from now with a negative growth rate, if you do all of these things, we say you can, in fact, provide a kind of spurt ... a stimulus that will give you much bang for the buck," Harris added.

Key component

He said the PIOJ growth-inducement strategy also contains several short- and long-term components that need to be "aggressively pursued right away".

One key component of the medium-term strategy, Harris pointed out, was tax reform, including a lowering of the stamp duty on the transfer of lands.

"We believe strongly that this should be the linchpin of the effort to modernise and improve the efficiency of the Jamaican economy," he said.

Another critical component, said the Stanford professor, is energy restructuring and the expansion of power generation in the country.

"There has to be a systematic attempt made to address the issue of the regulation of production and delivery of energy," he said.

Harris said Cabinet has accepted the PIOJ report titled 'A Growth Inducement Strategy for Jamaica in the Short and Medium Term', and has agreed to use it as the framework to craft the new Budget.

He said Finance Minister Audley Shaw has also committed to a majority of the proposals in the report.

However, pointing to several reports prepared over the years, the Jamaican-born Harris lamented that "historically we have had a big problem of implementation in Jamaica".

He said the implementation process could be made simpler if the Government concentrates on "a few things" that could be spread over a period of time.

"You can then demonstrate credibility in the programme ... and on that basis, you can build a platform to carry on growth in Jamaica," he concluded.