When Bruce Golding announced his intention to resign as Prime Minister and leader of the JLP, there were some who said that this would cause a significant negative impact on the economy. In fact this was the line also when there was delay surrounding the announcement of the IMF tests, when my own line was that (in August) there would not have been any significant negative consequence until around September if nothing was said.
Similarly I indicated that the mere announcement of the intention to resign would not have any negative economic consequence.
I should pause here to say that respect is due to Golding for the reasons given for his decision, which is the consideration of country and party above self. Despite what one may want to believe was the real reason, this is certainly a new standard for politics that Jamaicans will continue to demand.
It is important to understand my reason as to why the mere announcement of a leadership change would not have impacted the economic fortunes of the country. The main reason is that Jamaica's governance structure is not perceived as one where only one person is responsible for the economic or other programmes. In fact that is the reasoning behind "collective responsibility" of the cabinet. On the other hand, if Jamaica's governance structure was perceived to be like Apple when Jobs was CEO (may his soul rest in peace), and the PM resigned, then there may be an initial negative reaction to the announcement.
But in the end investors will always look at the fundamentals of the economy and the underlying value of the opportunity. So even after that initial reaction in most cases the previous trend will continue. Investors do not make decisions based solely on political reasons, but more so on value reasons.
When one looks at the economic programme being pursued, it seems obvious that there is a positive structural change taking place. One can argue that the administration was late in acknowledging the impact of the global crisis, going to the IMF, and did not have the appropriate IMF programme in place; however, my own view is that the general policy direction is positive and I think that fundamental lessons have been learned from the slips.
When one looks at the GDP growth areas, for example, growth is occurring primarily in the export areas of tourism, bauxite, and non-traditional exports. This is unlike the 14 years to 2007 when 72per cent of our economy was geared towards production for consumption, and these areas were performing best, thus leading to the need for greater debt. An examination of the macroeconomic environment also shows that all the measurements are showing some amount of stability. This is unlike up to 2009, when the trade-off was always between exchange rate and interest rate primarily. More importantly for me, however, were the moves to restructure tax administration, introduce tax reform (and the surrounding discussions), rationalisation of the public sector, and the fiscal and governance regime being introduced. I believe that some of these could have been done much more efficiently, but the general direction must be applauded. The main blot on the performance has been the inability to deal with the cost of energy, but this has been a problem of administrations since the 1970s.
Therefore investors will not look at personnel changes, if they believe that the programmes being pursued is as a result of a structural nature rather than personal.
Public hospitals underrated
Two weeks ago I had an experience with a private hospital where a patient was checked in and on the way to the floor a porter was pushing a wheel chair, and was asked by the admissions person to carry the patient. The porter continued to push the wheelchair and announced that he had just come off duty so he couldn't do it. The patient walked to the floor. Two days after the patient did an ultrasound at the hospital, and the written report of the ultrasound was the exact opposite of the real situation (thanks to the questions asked by the patient, this was discovered). Still two days later when the patient came in on an emergency, and given the nature of the ailment it was known that the patient might have to have surgery, the patient was given something to eat. Anyone who knows about anesthesia will understand that this is dangerous to do.
Contrast that to when the patient was transferred to UHWI because the private hospital was not able to handle the type of emergency: immediate attention was given and the patient immediately went into surgery. The doctors and nurses on reading the report realised that the surgery was high-risk because food had been given and took immediate steps to prevent any fatality. Additionally the nurses at UHWI are very attentive and professional and the amount of information that you are provided with is of a high standard. What's more, there was no talk about payment until everything was done to stabilise and treat the patient.
It seems to me that the only missing thing from UHWI (a public hospital) is funding. And even with low funding the professionalism and the available equipment seemed of a higher standard than the private hospital. So what do you pay for at a private hospital? Décor. If I am in an emergency, please carry me to UHWI, as the service is more important than the look of the place.
What I will say about the private hospital is that even with that experience the nurses were also very pleasant and helpful and the administration did apologise, but there are certain services that need to be vastly improved.
Dennis Chung is a chartered accountant and the author of "Charting Jamaica's Economic and Social Development - A much needed paradigm shift". His blog is dcjottings.blogspot.com