Errol MillerONE MORNING last week I listened to a discussion on the state of the economy on the Breakfast Club in which a representative of the Economic Intelligence Unit was asked if any part of the present economic plight of the country was due to speculative, opportunistic or irresponsible actions on the part of the private sector. His response was that private sectors are expected to behave in this manner hence the full responsibility for the situation rests with the Government whose job it is to regulate the private sector. I was amazed that answer was allowed to stand.
I have absolutely no problem whatsoever, if politicians of opposing political parties put all the blame for things on their opponents. This is in fact almost the name of the political game. It is unusual to find politicians who publicly give credit to their opponents for good policies as government or for sound and effective alternative proposals by the opposition.
However, it is quite another thing when so-called experts from Units, claiming to be intelligent, appear in public forums moderated by serious journalists and are allowed to give ludicrous answers that go unchallenged. If these programmes are supposed to educate and inform then so-called experts should not get away with talking foolishness.
To make my point more specific, there was no follow-up question with reference to the fact that in the early 1990s deregulation and privatisation were two of the major conditionalities of the international agencies prompting and prodding economic policy formulation in Jamaica.
Was there not some contradiction in the policies of privatisation and deregulation and increased Government regulation? Have the policies of privatisation and deregulation not contributed substantially to the country's current economic predicament by increasing the opportunities for speculation and opportunism while at the same time removing some of the constraints of Government regulation? These are important questions that need to be answered.
I vividly recall Dr. Lucien Jones engineering a meeting in January 1992 of a number of us who had represented social sector interests and the leadership of the Private Sector Organisation of Jamaica. At that meeting the core of our argument and concerns were that:
Based on the advice we had received from respected economists at the University there was no economic reason for the dramatic slide of the Jamaican dollar following the introduction of the floating exchange rate system.
It was unethical for the banks to be involved in black-market activities as managers acted as brokers bringing buyers and sellers of foreign exchange together, charge a broker's fee and bypass the official system that they also operated.
While fixed income earners would be the first to suffer from the inflation that would spin-off from these speculative activities, in the long-term the private sector itself, including the banks, would also be adversely affected.
These speculative activities could set-off a downward economic spiral stemming from Government action to curb inflation, layoffs in the public and private sector leading to less purchasing power among consumers and a shrinking number of tax-payers generating revenue for the government.
Our concerns and argument were dismissed out of hand. We were told that for the first time representatives from the private sector had been a part of the Government team that had gone to Washington to negotiations and discussions with the international agencies.
Further, the private sector leadership had proposed policies and plans that would make the private sector the engine of economic growth.
New policy fads
To cap it all the Government has signed off on those proposals and as far as they were concerned the economy was poised for take-off in another two to three years. The meeting ended with us being given a lecture in the culture of envy. It is not a meeting I will ever forget.
As far as I am concerned if we are to have any meaningful debate on the current state of the economy of the country the Government, the private sector led by the PSOJ and the international agencies, namely the IMF, World Bank and the IDB should jointly and humbly explain to the rest of us, what went wrong. Why is it that it is the fears of leaders from the social sector that have materialised and not their predictions of economic take-off? We should all remember the predictions of economic take-off that would result from deregulation, privatisation, devaluation and reduction in the size of government. These policies have been implemented. They have failed. The result has not been take-off but melt-down.
We the taxpayers and people in the social sectors must now pay almost all of the costs. The country needs some answers. What we don't need are bold pronouncements from people who really do not know what they are talking about.
As I listen to the new policy fads that are in vogue, the last thing we need as a country is another set of doctrinaire solutions, without any grounding in local or regional experience, being blindly and uncritically accepted and imposed. The price of such folly is too high. However, without critically reviewing and reflecting on our past experiences and learning from them, the economic policies adopted may not be too intelligent.
Errol Miller is professor and head of the Institute of Education, UWI, Mona.
