THE Private Sector Organisation of Jamaica (PSOJ) yesterday unveiled its revised Economic Policy Framework, which recommends how the country's challenges for economic growth should be addressed.
It put forward suggestions for tax, social welfare, public sector, pension and public private partnership reforms at the PSOJ's Fifth Annual Economic Forum, in collaboration with Jamaica Money Market Brokers, at the Jamaica Pegasus Hotel.
The private sector perspective on the Macroeconomic Framework for Jamaica gives a realistic set of policy recommendations which can produce high rates of sustained economic growth and job creation, and improve the standard of living for Jamaicans, said Christopher Zacca, president of the PSOJ.
Jamaica is expected to come up with a conceptual framework for a fiscal rule that will help lock the gains from fiscal consolidation over a longer term, according to the International Monetary Fund (IMF).
Some key elements of the programme that are expected to be met by next March have been assessed by the private sector, which has in turn made recommendations in its policy framework.
That programme includes a fundamental tax reform, a broadened tax base, a simplified tax system and lower tax rates, strategies to improve the business environment and pursue strategic investments, actions to make the financial sector more resilient, including phased reforms of the securities dealers sector and strengthening the social protection framework.
In keeping with the Fund's expectations, the PSOJ supports a more competitive tax regime that will see lower rates and a wider tax base.
"More focus should be placed on the administration of the tax system, and the promotion of tax registration," said Brian Denning, a member of the PSOJ Economic Policy Committee (EPC).
Invariably, administrative challenges, and the issue of compliance must be addressed, he said.
The PSOJ recommends that a Government e-portal be established to serve as a one-stop shop for doing business with the government and Internet banking be considered as a means of increasing the number of channels to pay taxes.
To move the economic infrastructure forward, public private partnerships will have to be developed, according to Keith Collister, EPC member.
"There needs to be viable projects, value for money and PPPs that are marketable," he said.
The private sector also suggested that the number of ministries — which currently stands at 20 — be cut to 11.
A reduction will allow the government to focus on its core mandate and will set the tone for a leaner and more effective public bureaucracy, said Adrian Stokes, the EPC member who presented on public sector reform.
Moreover, a cut in the ministries will not suffice, in that vein there also needs to be a reform of the government structure.
"We recommend that each minister make public the top three of five strategic goals for the five — year period. Permanent secretaries, acting as chief executive officers will be tasked with the implementation of these goals," he said.
Fayval Williams, the EPC member who presented on social welfare recommended that the social programmes be means tested to examine the eligibility of individuals who need help from the government.
There is also a need for an exit strategy whereby beneficiaries can eventually become gainfully employed and improve their lives, she said.
"Nobody wants to fund anyone from birth to death," she said.
The EPC, chaired by Don Wehby, spent the last 15 months looking at the IMF agreement.
A sound, predictable macro economic policy framework, discipline and strong fiscal management of the Jamaican economy, a modernised data market geared towards high level of productivity, a simplified business friendly bureaucracy, effective measures to fight crime and corruption and a supportive infrastructure should be the areas of focus to spur growth, according to Wehby.
The PSOJ will compile a book with the framework, and use the media to advocate for the policies that were recommended, he said.
Meanwhile, guest speaker Dr Peter Blair Henry said the three key lessons that Jamaica needs to learn in order to get back on track are discipline, clarity and trust.
The Jamaican-American economist, who is Dean of New York University's Leonard N Stern School of Business, noted that the specifics of the country's economic situation are well known, but there is a need to put the details into a broader context to help the private sector audience think about the vision of the country.
"The key now is to give hope and create a space to get from the promise of prosperity," he said.
"A framework has been laid, but what's the next step," asked Henry.
Discipline is a sustained commitment to a pragmatic approach to growth, which means fiscal austerity and also reforms to make the business environment more friendly.
If there is discipline and clarity, then there will be trust, said Henry.
Third world countries that turned things around did so when their leaders gave a clear sense of direction, he said.
"It's important that businesses trust that the government will stay committed to creating an environment in which they can make profits, hire more workers who will consume more and buy more goods, a cycle that lifts the economy," the economist told the Caribbean Business Report after the function.
People have to make a choice; it is possible to get beyond a mindset that economic reform can be achieved, he added.
In 2008, Henry led Barack Obama's Presidential Transition Team in its review of international lending agencies such as the IMF and the World Bank.
Henry, also a former Professor of International Economics at Stanford University, is the author of the thought-provoking book Turn-Around: Third World Lessons for First World Growth, in which he posits that the secret to emerging countries' success is discipline — sustained commitment to a pragmatic growth strategy. Henry's personal website states that his first lesson in international economics came at the age of eight, when his family moved from Jamaica to affluent Wilmette, Illinois, triggering his lifelong interest in the question of why average standards of living differ so greatly across the globe.