By Peter Jones, Contributor"What's more, this impressive growth performance was often achieved against an unpromising backdrop: countries with few natural resources, or small populations, have grown at a pace that has consistently eluded some larger or more resource-rich countries elsewhere."
Anne O. Krueger
First Deputy Managing Director
International Monetary Fund
At the Harvard Project for Asian
and International Relations
(HPAIR), Business Conference
Shanghai, China
August 21, 2004 PRIME MINISTER P J Patterson is very upbeat about the Jamaican eco-nomy and its potential for growth. In his address to the nation, the Prime Minister enumerated many positives and entreated members of the private sector, as well as the small business sector, to take advantage of current investment opportunities.
The parties to the Memorandum of Understanding (MoU) between the Government and the Jamaica Confederation of Trade Unions (JCTU), which was signed on February 16, will now have to undertake the challenging task of meeting the commitments that they have made. Through the Monitoring Committee that is being established to track the progress during its implementation, the parties will seek to ensure timely action and the resolution of any differences that may arise. Keeping the momentum that was generated in the negotiations is always a difficult task, and it will be especially testing in this case, given the differences in the interests of the members of the JCTU and other employee groups that were involved in the negotiation of the agreement.
All this is very interesting but, we need high levels of labour productivity to bring Sustained Economic Development (SED) to Jamaica. It is therefore very important to look at what has happened in the past so we do not make the same mistakes, as we cannot afford the high cost of any more mistakes.
Asian policymakers and entrepreneurs have long shown themselves adept at learning from the experience of others. Much of the region's growing prosperity and economic success derive from an understanding of what has bred success elsewhere.
There is an important home-grown element to the often-spectacular economic progress we have seen in many Asian countries. It is important to focus particularly on those factors that have helped deliver rapidly rising living standards across Asia; and to suggest ways in which other parts of the world could learn from this region's success, such as Jamaica and, in particular, CARICOM and the upcoming CSME.
The most striking feature of Asia's economic record in the past half-century or so is the pace of Sustained Economic Growth (SEG) that we have seen in many countries across the region. The numbers are impressive. The official figures show that China experienced an annual averagerate of increase in real per capita GDP of over eight per cent during the 1990s. Real per capita GDP in Korea, Thailand and Singapore has grown by more than five per cent a year, on average, since 1960. India has experienced more rapid growth rates following the reforms programme introduced in 1991. Since 1990, Asian per capita incomes have grown nearly twice as fast as that of the United States.
What's more, this impressive growth performance was often achieved against an unpromising backdrop: countries with few natural resources, or small populations, have grown at a pace that has consistently eluded some larger or more resource-rich countries elsewhere.
SUSTAINED GROWTH KEY TO FALLING POVERTY
Rapid and sustained growth is the key to rising living standards and falling poverty. The official figures show that the infant mortality rate in China fell by around 83 per cent between 1960 and 2002. Thailand, Indonesia and Sri Lanka saw drops of a similar magnitude. Singapore saw a decline of 90 per cent.
Over the same period, life expectancy for Indonesian men rose by 24 years to around 62 years; for women it rose further, by 26 years to 66 years. In Malaysia, life expectancy for men is now close to 70 and for women it is almost 75. Literacy rates have seen similar impressive improvements. And the increase in school enrolments ensures that literacy is on the way to becoming universal. What can Asian economic performance tell us about delivering growth elsewhere in the world and, indeed, what can the example set by more successful Asian economies teach those economies experienced who less rapid economic expansion?
An open trading system is crucial for economic success. It is possible for closed economies to achieve high growth spurts. But no country in Asia or elsewhere has managed rapid growth over a sustained period without opening its economy to the rest of the world.
Trade brings competition and this is a powerful force for increased economic efficiency. Protectionists worry about jobs lost to foreign competition. But protection costs jobs. It imposes costs on producers, especially those geared to export production (or who would be without these cost penalties). It raises the cost of protected intermediate products and thus puts producers competing with exporters in other countries at a cost disadvantage.
See Part II in next week.
Peter Jones is the executive director of the Economic Development Institute, a non-profit Jamaican economic development consultancy. Mr. Jones holds post-graduate degrees in economics and business administration and is the author of 'Jamaica: Social, Political and Economic Issues for Future Develop-ment'. He can be reached at liontraders@yahoo.com
