Wed | Feb 26, 2020

Mark Ricketts | Jamaica has to make changes in the real sector in 2020

Published:Sunday | January 12, 2020 | 12:41 AM

Keith Duncan, president of the Private Sector Organisation of Jamaica (PSOJ) and chairman of JMMB, is a stout defender of the government’s achievements in the area of macroeconomic stability. Over the Christmas holiday, he decided to expand his family horizons about Jamaica’s socioeconomic prospects by touring the inner city.

Who better than Duncan to make this assessment? He is the son of the late Joan Duncan, a banker, and an intellectual thinker who spent time exploring deficiencies in the money and capital markets. She persisted, eventually establishing a finance company.

If his mother was strong on business and economics, his father, Dr DK Duncan, was heavy duty as a populist and social activist. Even at school at Jamaica College, as youngsters, we always admired how much DK cared, had time to talk and share his knowledge, and even showed us batting techniques in cricket where he was outstanding.

So Keith, the product of an indulgent socialist father and an insightful entrepreneur mother, should be the perfect person to show his children another side of Jamaica then write about its economic prospects and his priorities.

His column, ‘Jamaica’s reality and achieving Vision 2030’, appeared in last Sunday’s Observer and opened with, “ my children have grown up insulated from the harsh realities of Jamaica, and some of us, in our more privileged domains, look at the murder rates and poverty levels as statistics until it comes too close to home.”

Duncan took his children to Trench Town and visited residents who had lost their possessions in a fire. His response, “I know poverty is a real problem in Jamaica, but what my sons and I observed was abject poverty. The hopelessness was depressing, to say the least.”

While commending the government for increasing resources through safety-net programmes, he noted that “poverty levels at 19.3 per cent remain a challenge.”

His priorities:

a) The country needs to get its politics right as Jamaicans have grown cynical.

b) The country without the IMF has to continue reducing its debt-to-GDP levels.

c) The country needs a national consensus on its crime strategy.

d) Jamaica has to start investing in people living in the most vulnerable communities.

e) Education needs better-quality outcomes that will increase productivity, create higher-paying jobs, and increase value-added services.

For me, our leaders must implement better policies this year to insulate its citizens against devaluation. Massive devaluation in post-Independence Jamaica has ravaged the lives of many Jamaicans and limited their choices.

While individuals with successful businesses and/or specific skill sets are able to pay themselves adequately or bargain and negotiate for remuneration packages that allow them to maintain a fairly privileged lifestyle, for many other Jamaicans, their earnings have significantly lagged behind the rapid pace of devaluation.

In our small, open economy, where much of what is produced, marketed, and consumed represents imported finished goods or imported high-percentage inputs, domestic costs are influenced by the price in foreign currency.

At the start of this century, our dollar was 43 to one against the US. by 2013, it nosedived to 80, and today, it is skirting 134 to one.

Earnings have lagged for many people, including farmers, gardeners, teachers, nurses, policemen, clerical staff, taxi drivers, and workers in retail, wholesale, and the tourism sector.

Where devaluation hurts a great deal in the construction and purchase or rental of high priced-assets, such as housing, because many of the inputs are imported. Recognising that low-income and lower-middle-income earnings lag the pace of devaluation, builders are shying away from that market so the housing stock is deficient for that segment of the market.

People then capture land and squat or become one of a hundred potential renters desperately pleading with a landlord to rent the house or apartment advertised in the classified section of The Gleaner.

People are desperate for housing, and people are desperate to earn incomes to facilitate rental or ownership, but prolonged and sustained devaluation, combined with largely misguided education policies, have left many behind.

NO ACCOMMODATION FOR WORKERS

It is amazing that we can facilitate the requisite permits for massive hotel construction yet make no corresponding provision for workers’ living accommodation. How the government can’t see that as an obstacle to economic development and human welfare is beyond me!

Murderous gangs; more hot spots; insufficiently trained police recruits; and rank- and file-police, overworked and undermanned must be addressed this year. Less than two weeks into 2020, painfully, the quiet genocide, labelled murders, has ignored pause.

This has to be the year of the family and the year of responsibility and accountability. How can so many children grow up without knowing their father? how can so many parents be having multiple children without any idea where the money is coming from to take care of them? And the society remains silent.

There is no language, leader, or legislation fostering or ensuring responsibility and accountability. Social dysfunction is at the root of our problems.

Andrew Holness talking prosperity and Peter Phillips defending the poor are no longer policy options in a country with oversize debt and export earnings savaged by JISCO’s closure. Unfortunately, it is the children who pay an unconscionable and painful price for life.

Our leaders must implement legislative-modifying behaviour to ensure that parents can take care of the defenseless they bring into the world.

Duncan is satisfied “that the country in the last seven years has been emerging from a prolonged history of underperformance. Now, debt-to-GDP levels at 94 per cent are declining, macroeconomic stability is fairly entrenched with all-time low interest rates, low and stable inflation rates, and healthy and adequate gross international reserves of over US$3.6 billion”.

Great, but I call that the pretend society as long as captured land and squatting continue; home for some children are zinc houses behind zinc fences; lawlessness on the roads remains on steroids; our homicide rate positions us in the top ten; our untrained and non-certified are in the high sixties; and our orange-and-green outfit-wearing parliamentarians are not prepared to disavow themselves of their garrison tribal warfare instincts even in the House of George William Gordon.

I am sure that when Duncan’s children question him, they highlight these realities, which are out of sync with his presentation on TV showing the beneficial effects of macroeconomic stability. Unfortunately, change in the real sector has been a long time coming.

- Mark Ricketts is an economist, author, and lecturer. Email feedback to columns@gleanerjm.com and rckttsmrk@yahoo.com