Robert Wynter, Contributor

If we buy in to the vision that Jamaica can and must be transformed to a true paradise for all, then we must acknowledge and honour the role of all sectors of the society. We must also go further and hold each sector accountable to its respective contribution to that transformation. Today I want to consider the role of the private sector. We must answer the questions: How and to what must we hold the private sector accountable?

A private sector firm, through the synergy of capital and labour, commercially produces and delivers goods and services consumed by the society. Members of the private sector include both the owners of capital (employers) and the providers of labour (employees). Any individual involved in the commercial production and delivery of goods and services constitute a part of the private sector. In fact, a public sector employee, such as a policeman, minister of government or a mayor, who owns a business or is employed in a business, belongs to both the private and public sectors.

The role of the private sector firm is to provide goods and services to society at a reasonable rate of return on capital. The firm is held accountable by the extent to which it satisfies its customers. Under the free market model, which ostensibly holds sway in Jamaica, businesses are punished for failure to satisfy (whether by price, fitness for use or accessibility) customers. When such a firm satisfies customers in this way it contributes to the good of society. When it does not it is punished by unsatisfied customers voting with their pockets by purchasing elsewhere. Pretty soon such a firm is forced to close or to change its ways. In other words, consumers hold firms accountable through their freedom of purchasing choices. The exception to this rule occurs whenever the Government interferes in the free market in an attempt to protect one sector of the economy.

need to protect

This 'need to protect' results in dislocations in the wider economy, with the recent cement crisis being a clear example. In an attempt to protect a single entity, the Caribbean Cement Company, the Government increased the duty on imported cement, thereby rendering importation non-viable, and for all intents and purposes provided a monopoly status to the Caribbean Cement Company. The result is well known, as almost every sector of the economy suffered from a shortage when a de facto monopoly could not adequately satisfy demand. Had the private sector held the Government accountable to its stated free market model, the crisis could have been avoided.

While the private sector is a large amorphous body of persons with different agendas, industry associations bring together those private sector members with common agendas and objectives in an attempt to represent their particular interests. Because of the significant influence that these associations have on Government policy, and hence, on transforming society, it is important to address their accountability separately from those of the individual private sector firm.

The roles of the private sector associations are to support member firms in achieving their respective objectives; to support expansion of the particular industry; and to lobby and hold Government accountable for policies conducive to industry expansion. To what should industry associations and their respective leaders be held accountable, and how should this be done?

All activities of an Industry

Association ought to be done with the ultimate objective of improving industry performance, resulting in the transformation of the society. Associations must be held accountable to the extent of achievement of their mandate. Very few such associations have clear performance measures and targets aligned to their respective mandate. One such exception is the Jamaica Exporters' Association, whose recently outgoing president reported that the country experienced its fifth consecutive year of double-digit growth in exports. It is not just the right of members to hold their respective leaders accountable; it is actually their duty to do so, as a high-performing industry contributes to the transformation of society

In closing, the private sector plays a critical role in society and must be held accountable for performance. Accountability of the private sector must be addressed from the individual firm level as well as from the industry association level. Individual firms are held accountable to satisfy consumers by the very consumers' freedom of purchasing choice, except when this choice is removed through Government intervention, usually with disastrous consequences to the consumer and to the national economy as a whole.

Industry associations and their respective leaders wield enormous power and influence Government decision making, but are not normally held accountable for the achievement of their mandate. It is the duty of the members of these associations to demand that performance targets are set and that the leaders are held accountable to that level of performance. By significantly improving performance, individually and collectively, the private sector will contribute to the transformation of society, resulting in Jamaica becoming a true paradise for all.

Robert C. Wynter is a partner in Growth Facilitators, a firm of management consultants. Mr. Wynter is eager to receive comments on this article and can be reached at robwyn@cwjamaica.com