Boyne
Ian Boyne, Contributor
THE CABINET has just concluded three days of retreat amidst deep and worrying concerns over the economy and expected social tensions attendant to the upcoming budget.
Reams of papers were presented and poured over; key public sector officials and Government sympathizers (some wearing the hat of experts) would have been assembled and intense discussions ensued. To what avail?
With what shall the Cabinet arise to tell the nation? Will it make any concrete, practical difference to our living standards and prospects for growth?
Governments have not been short of good intentions, plans, experts and projections. But they have been abysmally short of results and practical action. What will be different this time? Only time will tell, to quote a well-known Bob Marley song.
While we are assessing the Government's first 100 days and are carrying out our responsibility as media practitioners to be adversarial, we have to so with reason and depth.
SHOOTING IN THE DARK
We are not helped by editorials such as the one in last Wednesday's Gleaner titled "Need for a Vision". The editorial begins, "The Government does not seem to have a vision of the future of Jamaica. If they do, they have not shared it with us during the first 100 days of their newest term". This is amazing.
Whatever else we can accuse this Government of it is not the lack of the articulation of a vision. A journalist's first obligation is to be faithful and scrupulous with the facts. We must do our research.
In the Prime Minister's swearing-in speech at Emancipation Park a speech which has been published in booklet form he said unequivocally, "I have endeavoured to outline for Jamaica a vision of a quality society in which each individual can achieve their full potential for personal, economic and spiritual growth. It is a vision which sees a Jamaica that is prosperous and dynamic; with first class infrastructure, access to universal education and relevant training; one that prepares each citizen not only to survive, but, indeed to prosper in the global village."
If that's not the articulation of a vision with the use of the very word -I don't know what is.
"Our vision is of a country where the human rights of each individual are fully protected and where each citizen can live safely and securely," the Prime Minister continued.
Say that the Government is not acting consistently with its vision or that it is not sincere about it, but don't say that no vision has been articulated in the 100 days.
The editorial also goes on to make other criticisms of the Government. I will leave out the charge that the Supplementary Estimates of December indicate a Government more interested in winning the forthcoming Local Government elections.
Much more useful from the editorial would be an analysis of the Estimates themselves to show that this is, indeed so, and to demonstrate the areas of fiscal irresponsibility.
But the editorial goes on to state: "The last 20 years have seen a continuing slide in public sector managerial competence." What empirical evidence supports this bald assertion?
The Sunday Gleaner two weeks ago carried a lengthy feature on the achievements of the Government's public sector modernisation programme and The Gleaner editorial of Tuesday quoted that feature which had the Cabinet Secretary revealing that the eight executive agencies of Government contributed $1.2 billion to the Government coffers in the last fiscal year, compared to $72 million 1998/1999 fiscal year.
Mention the specific ministries and departments which ought to go and why, but don't fire wild shots in the dark about cutting Government.
AREAS OF CONCERN
To say that what is required is for "the Government to go on a very visible and transparent programme of improving the management capability of the ministries" is to ignore that the public sector reform which is very visible is about exactly that. It is thought an improper indeed, indecent thing for a journalist to defend the Government or to praise the state for doing anything right.
But the journalist's primary duty is to protect and promote truth and in that regard I offer no apologies for criticising my own colleagues when they miss the mark.
There are enough areas of concern which we must raise with regard to this Government.
For example, it is not enough for Minister Whiteman or the Prime Minister to tell us of the monetary and fiscal responses to our economic challenges, without telling us how the Government intends to deal with Jamaica's production and export crisis.
We need to give the kind of focused, targeted attention to the export sector that we have given inflation and the exchange rate. If we continue to simply pay attention to maintaining a low inflation and relatively stable exchange rate, while waiting for the "magic of the market" to chip in, we will continue to live in a fool's paradise.
The Jamaica Exporters Association (JEA) lacks decisive, dynamic leadership. One would think that Jamaica's exports are growing buoyantly from the deafening silence from our exporters and manufacturers.
The Jamaica Manufacturers Association (JMA) has gone from an organisation that used to bellyache over every darn thing to one that mainly speaks when asked. The producers and exporters must make a strong case for their revitalisation.
It is a fact that macroeconomic stability is essential for production and export growth. That is a given. But it is not automatic that once we have low interest rate, low inflation, we are going to have robust manufacturing and export growth.
And I am not just talking about devaluing the currency to make exports more competitive. We have been hearing these tired arguments since the 1970s and every time we devalue we have no appreciable increase in export growth. There is a fundamental production crisis which is not being addressed, and if the Cabinet emerges from its retreat without addressing this concretely, the economy will continue to be in retreat.
It is not enough to say that the state's role is to get out of the way, become more efficient in doing certain limited things and that it should facilitate private business. It should do all of that, but it should do more within the confines of the World Trade Organization (WTO), International Monetary Fund-governed world.
As the well-known Nobel Prize-winning economist, Joseph Stiglitz, said in 1997 at the famed World Bank Conference on Development Economics: "Development is possible. And successful development requires, or at least is enhanced by, undertaking appropriate policies which go well beyond simply getting out of the way. There remains little doubt that Government (in East Asia) played a critical, catalytic role".
In an article in the January 14, 2002 issue of American Prospect, Stiglitz, author of the much-talked- about Globalization and its Discontents, says each of the East Asian countries "rejected the basic tenets of the Washington Consensus, which argued for a minimalist role for Government and rapid privatization and liberalization. In East Asia Government took an active role in managing the economy."
In the book Japanese Views On Economic Development: Diverse Paths to the Market, K Ohno says, "True, inflation must be dealt with but not at all costs to the society, especially when the country is distressed by collapsing output, joblessness, political instability, lawlessness and public discontent. Under such adverse circumstances, the highest priority for Japan would be real economy and not the financial side: how to arrest the fall in output, how to secure jobs, how to initiate revival and industrial restructuring etc., these are real concerns take precedence over money, budget and inflation."
The Cabinet must come to the nation to show us how these fundamental issues are to be dealt with.
WHAT ARE THE REAL NEEDS?
Remember that can't be done at the expense of low inflation and exchange rate stability (relative). These are given and an essential part of the thrust to achieve sustainable economic growth.
Let's not be silly like the leftists of the 1970s here who believed they could redistribute what they didn't have and who were scornful of macroeconomic discipline. But, nor should we be naive like the market fundamentalists and monetarists who believe that by fixing certain "economic fundamentals", ipso facto, there will be growth and exports will boom. Nonsense.
Don't let us become complacent and forget that just a few months ago our minds were obsessed with the matter of security and we were terrified by the realisation that if we did not address the enormous social deficit, we were courting social disaster and massive social protests which would wreck our tourism industry and drive away investors, both foreign and local.
As well as drive away intellectual capital from the country. So with all the glib talk about Government cutting expenditures and "taking hard, cold decisions", I hope the myopic among us have figured out the consequences of these decisions.
Don't just calculate the costs of borrowing and spending more. Calculate the costs of not making the social investments and not creating the jobs. And see how long you will maintain low inflation and a stable exchange rate when the masses rise in protest. People underestimate the real dilemmas we face as a society.
THINK ON THESE THINGS
In a highly reflective paper by the outstanding Harvard economist, Dani Rodrik, in July last year ("Feasible Globalisations"), the well-known anti-neo-liberal scholar mentions the case of Argentina which did everything right as far as market reforms were concerned.
Charles Ross, John Jackson, Basil Buck and Colin Steel would have been proud.
Says Rodrik: "Argentina undertook more trade liberalisation, tax reform privatisation and financial reform than virtually any other country in Latin America. It did everything possible to endear itself to the international capital markets. Obtaining investment-grade rating the ultimate mark of approval by international markets became the Argentine Government's first priority. Why did international investors nonetheless abruptly abandon the country as the decade was coming to a close"? The neo-liberals and monetarists in Jamaica should want to know!
Hear Rodrik: "Markets grew increasingly skeptical that the Argentine congress, provinces and common people would tolerate the policy of putting foreign obligations before domestic ones and in the end the markets were proven right. After a couple of days of mass protests and riots before Christmas, Cavallo and de la Rua had to resign in rapid succession. Argentina's lesson proved that mass politics casts a long shadow on international capital flows even when political leaders single-mindedly pursue the agenda of deep integration. In democracies, when the demands of foreign creditors collide with the needs of domestic constituencies, the former eventually yield to the latter."
The Cabinet had better think on these things.
