Keith Collister, Gleaner Writer
Carlton Davis: Trip to Ireland exceeded his expectations. - Rudolph Brown/Chief Photographer
A high-level Jamaican Government team, including Finance Minister Omar Davies, Cabinet Secretary, Dr. Carlton Davis and Central Bank Governor, Derick Latibaudiere, visited Ireland from July 3-5. In an interview with The Gleaner, Dr. Carlton Davis advised that despite being familiar with the story of Ireland's economic success as "the Celtic
Tiger," their trip had exceeded his expectations.
Of particular note was the critical role played by rapid institutional change and reform in Ireland's
economic transformation, and the lessons this held for Jamaica.
In Dr. Davis' view, a key lesson from the trip was that the education system must be working in tandem with the development goals of the country. In his view, "It must be easier to get a scholarship in engineering or accounting
than in one of the traditional arts disciplines."
Ireland now has 17 science
graduates per 1,000 people, far more than the traditional engineering powers of either Finland or Germany, providing international businesses looking to set up there with a critical pool of workers. As a result of Ireland's investment in education over the past several decades, Ireland no longer needs to have a strategy of low-paid labour.
This emphasis on technical education did not happen by chance, and he believes there is a lot that Jamaica can learn from Ireland's emphasis in this area. In his view, this is in contrast to Jamaica, where the focus is mainly on literacy and numeracy, and the number of people who get a tertiary education as the key measures of educational performance, rather than increasing the pool of technical skills essential for business as a clear state policy.
Strong Relationship between private sector
and Irish state
Michael Martin, Minister for Enterprise, Industry and Employ-ment in Ireland, outlined to the Jamaican Government team how the state had a very strong partnership with the private sector in the area of training.
Dr. Davis had also noticed the "easy relationship" between a firm like Digicel and the Irish state. While Digicel probably had better access than most, this 'easy' relationship seemed to be enjoyed by both the wider private sector and the union movement, with whom there appeared to be 'no mistrust' unlike the situation in Jamaica. The Irish seemed to be united around the laudable goal that having reached the first rank of successful economies from a situation not unlike Jamaica's, they were going to make every effort to stay on top.
Jamaica's public-private
sector relationship
needs improvement
While Jamaica had a number of mechanisms for public-private
sector interaction, including the 'legislation and regulation' reform initiative with the Jamaica Chamber of Commerce, and
private sector representation on the Development Council and the National Planning Council, Dr. Davis believed a much better relationship between the Government and private sector was needed to move Jamaica forward.
Public-Private
Partnerships Act
A good example of a potential learning-opportunity was Ireland's Public-Private Partnerships Act, which codified how public-private partnership to build infrastructure e.g. concert halls, should work as opposed to the more 'ad hoc' arrangements currently operating in Jamaica. He argued that this would allow creative vehicles for local financing.
Jampro
While Jamaica's Jampro already has a good relationship with its equivalent, the Irish Development Agency (IDA), there is clearly a lot more that Jamaica could learn from how the IDA operates. The IDA brings businesses to Ireland, encouraging particularly new investment in high value-added sectors, as part of a strategic plan to utilise its high-calibre people.
As previously mentioned, the investment is not to take advantage of low wages as Ireland is no longer cheaper in this area. With impressive focus, the IDA also uses those who have already invested in Ireland as leverage, which becomes part of their marketing effort.
National Pension
Reserve Fund
Despite Ireland's currently good demographic ratio of five working people to one retired, by 2056 the ratio is estimated to fall to 1.8 to 1. Dr. Davis cited approvingly Ireland's creation of the National Pension Reserve Fund ( NPRF). Through the NPRF, Ireland has chosen to pre-fund the public pension system using funds from privatisation and the proceeds from telecommunications liberalisation, along with annual contributions from the budget surplus. This extremely far-sighted move is a significant contrast to most public pension systems, which are normally contingent liabilities on the budget.
The role of
the Central Bank
Dr. Davis noted that Ireland's Central Bank had outsourced most of its monetary functions by adopting the Euro, leaving it as a predominantly regulatory body. Ireland had chosen the path of rationalising the resources and physical infrastructure devoted to financial regulation through having its equivalent of Jamaica's Financial Services Commission, the Irish Financial Services Regulatory Authority, located in the Central Bank but with its own board. This would appear to be a compromise between those who favoured a fully-independent regulator and those who believed the Central Bank should maintain full control of regulation of the financial
services industry.
Tax
Dr. Davis noted the critical role Ireland's current 12.5 per cent corporate tax rate played in Ireland's competitiveness as an international investment location. He also noted that Ireland's tax arrears used to be at a similar level to Jamaica's before its economic transformation.
