Keith Collister, Contributor
FAIRBANKS
FAR FROM being unique, Jamaica's economic problems are the classic problems of an under- performing developing country, well blessed with natural endowments such as a great climate, good location, and plentiful natural resources, including beaches and bauxite, argues Michael Fairbanks.
In his view, there aren't an infinite number of explanations for poverty, and he believes we are actually very similar in this regard to a number of countries where he has personally worked, including Colombia, the Dominican Republic, Rwanda, South Africa, and Bangladesh.
However, he believes that the country's current economic model is a systematic approach to creating poverty, as in the model; the harder people work the poorer they appear to get. He argues the country's low wage model is designed to create value only for foreign consumers (and thus keep Jamaicans in poverty) rather than the economic model of an economically progressive country with high and rising wages, creating prosperity for all its citizens.
An associate of the international development consultancy 'On the Frontier', Michael Fairbanks says Jamaica's economic model is based on low wage competition, with the Government as master economic strategist relying on natural resources for the country's primary exports, e.g., raw materials such as bauxite and 'beach'-based tourism. By focusing on these easily imitated advantages, the country competes solely on the basis of price, which tends to supress wages. In his view, keeping wages low is competing to see which country can stay the poorest the longest.
The first approach, which Jamaica has been attempting to implement for some time, is a heavily macroeconomic, monetarist or 'structural adjustment' type approach, which in effect says if the government creates a stable macroeconomic environment (combined with a rapid opening of the economy) then private sector entrepreneurs will create wealth. He argues that this strategy may create more poverty and inequality, particularly in the short term, as a result often leading to disruptive resistance, and fails to recognise government's role in innovation.
The second approach is a more bottom up, micro and product-orientated approach, with the government doing everything it can to help the private sector succeed. This means investing, or helping the private sector to invest in the higher forms of capital. In poorer countries, government will have to do more than richer countries, and the relationship between government and private sector will need to be carefully designed based on the nations stage of growth and the capacities of each sector.
Mr. Fairbanks has no time however for "dependency theory", which he characterises as the view that there are "evil people" up in Washington who control the terms of international trade, with the plan of systematically exploiting developing countries such as Jamaica, an explanation which he believes has completely exhausted itself long ago. In fact, he says, the main problem today is that there is nobody up in Washington who cares about Jamaica. In his view, even Jamaicans living in America aren't thinking a whole lot about Jamaica as they gradually become more assimilated. In short, he believes that there is no friendly Santa Claus to the North, and that we will have to find our own answers, and quickly.
THE FAILURE OF JAMAICAN PUBLIC AND PRIVATE SECTOR COLLABORATION
In his view, the main problem is that government and the private sector have been unable to work together to create the new sources of capital required for a high productivity country. In his celebrated article, 'Changing the Mind of a Nation: Elements in a Process of Creating Prosperity', Mr. Fairbanks argues there are seven main forms of capital.
He believes Jamaica is still in the old paradigm, emphasising the three traditional sources of capital: our natural endowments such as beaches, humanly made 'physical' capital, such as highways, and financial resources, including its Net International Reserves (NIR).
The new higher forms of capital for productivity
Mr. Fairbanks believes these include :
1) Institutional capital, such as legal protections for tangible and intangible 'intellectual' property, efficient Government departments, and proper incentives for investors and workers. Crime in Jamaica is a severe threat to the 'rule of law', the most basic requirement for prosperity.
2) Knowledge resources, such as international patents and university research. In Jamaica, there is basically no research and development, while business and academia are not working together.
3) Human capital, representing skills, insights and capabilities. He argues that all our best human resources leave to get a job elsewhere. This 'brain drain' leads directly to the impoverishment of the country over the long term.
4) Cultural capital, which includes attitudes and values as well as music and language.
CULTURAL CAPITAL - NO STRATEGY FOR THE FUTURE
Jamaicans have confidence in their attractive culture and believe that they have among the best cultural offerings in the world. Mr. Fairbank agrees, stating that Jamaica's music and language have helped make 'Brand Jamaica' one of the strongest brands on the planet. However, in his view the much more critical part of a nation's cultural capital in helping it to achieve development is in its attitudes and values.
In his view, Jamaica's current belief systems, attitudes and goals are anti-development overall. For example, according to 'On the Frontier's' local surveys, Jamaican's "don't believe in competition, are not optimistic about the future, and don't trust each other." The country's attitude to change and innovation was deemed by 61 per cent of a survey's respondents to be among the worst in the world.
Mr. Fairbanks believes that the time horizons of politicians in Jamaica have been much too short-term, and that politicians have given the population the impression that there are easy solutions and rapid fixes - "Vote for me and everything will be OK." In his opinion, Jamaica requires a time horizon of a minimum of between 10 and 20 years to fix its problems, far longer than a typical politicians time horizon of several years. He believes that Jamaicans are a vibrant, energetic, talented group of people, who just can 't seem to get out of their own way, most of the time acting to sabotage themselves.
THE IRISH MODEL
As an Irish citizen, Mr. Fairbanks believes that Ireland is a very good case study for Jamaica to look at as they have much in common, particularly this predilection for self-sabotage. He describes this as "a preference to continue to allow one's society to degrade and have someone to blame it on, rather than have the society improve and have to share the credit." In short, Ireland used to be a nation of begrudgers, unhappy to see one of their own succeed. This was partially due to the egalitarian leanings of the average Irishman, which he believes has now been converted into a workplace asset as part of Ireland's economic transformation, something yet to be achieved in any sense in our Jamaica.
Ireland, like Jamaica, was a former British island colony which the industrial revolution had passed by. Indeed, they had what Mr. Fairbanks described as the additional problem of Catholicism (in common with much of Latin America), where to be wealthy was a sin, and being poor was good news as you would be rewarded in the hereafter.
A critical change took place in 1967, with the advent of free secondary education. Not too long ago, the Irish couldn't speak any language properly (their native tongue actually being Gaelic) including English. Now, thanks to their educational revolution, they are amongst the best linguists in Europe. In a related aside, Mr. Fairbanks describes the debate over teaching standard English in schools in Jamaica as "obscenely stupid", as the failure to learn standard English simply condemns our Jamaican children to poverty in a globalised world.
JAMAICA NEEDS A 'SHARED VISION'
The major problem Jamaica has in following the Irish model is the lack of a 'shared vision' in Jamaica. For example, the Irish culturally revered education (one benefit of their Catholic culture), and as soon as the opportunity presented itself financially vastly increased the resources allocated to this area. In Jamaica, Mr. Fairbanks believes there appears to be no similar 'shared vision' that the only investment with an infinite return is an investment in our children, the culture being instead that we won't invest in our neighbour's children as it doesn't benefit us directly.
This problem has been compounded by politics. "The two political parties have Jamaica in a death grip, and they won't do anything to help the country if it helps the other side." Of course, he readily admits that "these are patterns of human behaviour that we see everywhere, irrespective of race or location".
(Describing himself as not just another short-staying, pasty faced American consultant from Boston (he also happens to be an Irish citizen), Mr. Fairbanks says he has been coming to Jamaica for 25 years as his mother is married to a Jamaican).
