The PNP, Michael Manley and democratic socialism wrecked Jamaica

...Learn that Peter Phillips

Garfield Higgins

Saturday, March 18, 2017

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A tree is known by its fruits. — Zulu Proverb

Some weeks ago I predicted in this space that one of the primary strategies of the People’s National Party in Opposition (PNP) would be the propagation of fake news. The PNP is entirely predictable these days.

This excerpt from last Monday’s Jamaica Observer is the most recent evidence that I am right. "Opposition Spokesman on Finance, and the man who will take up leadership of the People’s National Party (PNP) later this year, Dr Peter Phillips, last night told party faithful at the Manning’s High School in Westmoreland, ‘...only the PNP can save the country, and I am ready to fix it yet again’." ( Jamaica Observer, March 13, 2017)

This fanciful utterance by Dr Phillips, and here I am being euphemistic, gives rise to the questions: Who "broke" Jamaica? And when? And more specifically, did the PNP ever "fix Jamaica"?

To answer those questions does not require special tutelage in rocket science. One needs only to recollect how many years the PNP occupied Jamaica House and when Jamaica’s economic collapse started.

The genesis of our downward economic spiral started in 1972 when Michael Manley came to power under the slogan ‘Better mus’ come’. Prior to the charismatic Manley, Jamaica’s economy was the envy of the Caribbean. Multinational companies were flocking our shores to invest, and folks from other Caribbean territories were coming here to seek opportunities. We were seen as the Pearl of the Caribbean.

The figures in the table testify to the economic glory days of the 1960s and the nosedive in the 70s.

Admittedly, the economic benefits of the 60s were not reflected fast enough in the pockets and on the dinner tables of the majority of ordinary Jamaicans. The country was never, however, buried in a chronic state of what former Prime Minister Edward Seaga termed "shortages, stoppages and outages".

What were some of the consequences of Michael Manley and democratic socialism?

• The Bank of Jamaica had to print money for the country to survive after the treasury was drained.

• Michael Manley used most of the increased bauxite levy to finance free education, which was not free at all because the schools and parents had to cover the gap.

• This left little to finance several other social make-work projects that were announced by Government under the ‘socialism is love’ explanation given to the people. Most of the schemes collapsed from lack of funds and people who wanted money, not work.

• Unemployment increased to a record 27 per cent, aided by the fallout of the make-work projects.

• When Jamaicans saw what was happening, they converted their money to US dollars through banks and the black market and moved their savings and other funds to US banks.

• Soon, the Bank of Jamaica ran out of reserves in foreign exchange, for the first time, and had to use funds set aside for paying debt.

• The Bank of Jamaica could not supply the amount of foreign exchange to the banks, which were under pressure by business clients and others to pay bills for goods ordered by companies and to meet other demands for foreign exchange. In addition, there was a growing flight of capital.

• This resulted in a severe reduction of imports of raw materials and spare parts, closing down of factories and increasing unemployment.

• Oil supplies were short, resulting in frequent blackouts and loss of factory time.

• Imported food items were so short that riots erupted at supermarkets when goods arrived.

• Small shops — 14,000 of them — either closed or kept one window open mostly to sell aerated water, Foska oats and toilet tissue.

The dismal performance of the macroeconomy was the result of deterioration over the previous eight years, 1972-1980, as revealed by the database published:

• The value of the total production of the economy (gross domestic product [GDP]) in 1980 was 17.5 per cent less than in 1972, after decreasing every year but one.

• Inflation increased by 250 per cent, peaking at 49.4 per cent in 1978.

• While revenue remained almost constant over the period, expenditure increased by 66 per cent.

• The budget deficit, as a consequence, increased from 3.9 per cent to 17.5 per cent, one of, if not the highest, of any country not at war.

• The total public debt, as a percentage of GDP, increased nearly 500 per cent, creating a crushing burden in debt service.

• The level of investment collapsed by 40 per cent of GDP, and savings by 53 per cent.

• Foreign exchange reserves were wiped out, plunging from positive US$239 million to negative US$549 million.

• Economic growth was negative in seven of the eight years and less than one per cent in the eighth year. (
The Gleaner, October 23, 2016)

Who broke Jamaica and when? The answer is straightforward: Michael Manley and democratic socialism. While Manley went to the mountaintop with Fidel Castro, Jamaica was plunged almost to the bottom of the Caribbean Sea.

Was Dr Phillips referring to the turbulent 70s when he said "Only the PNP can save the county"? That answer is implausible, except of course to those who are suffering with severe brain freeze.

Could Phillips have been referring to the 1990s, when the PNP turned Jamaica into an economic and social dust bowl, after Edward Seaga — our best prime since political independence — had brought back economic and social respectability to Jamaica between 1980 and 1989?

Hurricane Gilbert, in 1988, interrupted Jamaica’s growth momentum. Its consequences created a political aperture for the return of a repentant Manley, who declared socialism "dead" in the early 1990s. We are still reaping the whirlwind for the PNP’s return to power in 1989.

These facts tell the sad story:

Recall that these companies — and this is an abbreviated list — capsized while the PNP held office: Mutual Life, a company that operated locally for over 100 years; Goodyear Tyre Company; West Indies Glass; Homelectrix; Workers’ Bank; Raymar’s Furniture; Charley’s Windsor House; Thermo Plastics; Berec Batteries; Century National Bank; Crown Eagle Insurance; Crown Eagle Insurance Commercial Bank; Island Life Insurance Company; American Life Insurance Company; Eagle Merchant Bank; Ecotrends; Times Store; Things Jamaican, which had its location turned into a prison by the PNP. Add to those another 45,000 small and medium-sized businesses that went under during the 1990s.

Recall a front-page story in The Gleaner on Tuesday, February 9, 2002, which listed major money scandals that had occurred under the watch of PNP administrations. The root of these scandals is an amalgam of ineptitude and a cruel waste of public resources. The consequences have helped to chronically impoverish Jamaica and damage our credibility abroad. The scandals include, but are not limited to:

1. Shell waiver (1991) - $29.5 million; approximately $560 million in today’s terms

2. Zinc (1989) - $500 million; approx $22 billion today

3. Furniture (1991) - $10.6 million; approx $200 million today

4. Public sector salaries (1998) - $60 million; approx $287 million today

5. NetServ (2001) - $220 million; approx $856 million today

6. Operation Pride/NHDC (1997-present) - $5.5 billion projected; approx $20 billion today

TOTAL: $6.320 billion; approx $44 billion today

Jamaicans must never forget these facts.

By common-sense deduction, Phillips could not have been referring to the years of economic and social blight during the time of P J Patterson at bat. But, of course, common sense is not so common to some, even in the face of overwhelming evidence.

Was Dr Phillips, therefore, referring to the economic and social doldrums periods when Portia Simpson Miller was prime minister?

Dr Phillips was the finance minister and de facto prime minister during the Simpson Miller years. His record shows no evidence that he saved and served anything — other than his bloated ego and all-too-obvious vaunted ambition.

These statistics paint a tragic picture of the PNP’s dwarfed imagination and stunted thinking.

The growth figures for 2011 to 2015 tell the woeful tale of how Phillips choked the economy almost to death: 2012 (-0.5 per cent); 2013 (0.2 per cent); 2014 (1.1 per cent); and 2015 (1.4 per cent). These serve as mirrors of PNP misgovernment. The JLP left the economy growing at 1.6 in 2011. (Statistical Institute of Jamaica)

Phillips also imposed $58 billion in new taxes during his time as finance minister. Did Phillips and the PNP "fix Jamaica" during those years?

Below are glimpses of the pulverising effect of the PNP during its most recent sojourn at Jamaica House:

We must never forget the dire consequences of the preventable Riverton City dump fire which burned for over a week.

"The air quality report on the Riverton dump fire, commissioned by the Health Ministry, shows that the samples of air pollutants taken from the site contained high levels of hazardous substances, including benzene.

"According to a release from the ministry, the samples were taken during the period of March 13-14.

"The release said that the prolonged or long-term exposure to benzene has been blamed for causing cancers such as leukemia.

"According to the Centers for Disease Control, USA, long-term exposure to benzene is exposure for over one year, it added. Acting Chief Medical Officer Dr Marion Bullock DuCasse said the sampling for volatile organic compounds shows that benzene was at the highest level ever recorded by the ministry.

" ‘The high level of benzene is directly attributed to the burning at the Riverton disposal site. We consider this a significant public health issue,’ she said." (Jamaica Observer, March 23, 2015)

We must never forget the Outameni scandal which is costing the taxpayers $900,000 per month in maintenance and related costs.

Outameni is now the local white elephant of white elephants, surpassing the former Goodyear plant in St Thomas that once held that unenviable status. The property was bought, notwithstanding that a technical committee of the National Housing Trust advised the then board not to make the purchase.

"The Auditor General’s Department says that the National Housing Trust’s (NHT) purchase of the Orange Grove/Outameni property in Trelawny in 2013 was a buyout of a bad debt owed by the owners of the property to a local merchant bank.

"The purchase was consummated, although a site assessment of the property conducted by the Trust’s Construction and Development Unit had indicated "that the property does not appear to facilitate the NHT’s mandate for affordable housing solutions and is more suited for recreational/heritage type facility". (Jamaica Observer, April 22, 2015)

Why did the de facto prime minister, Peter Phillips, keep a stony silence during the ‘dead babies scandal’? Why did he remain deadly quiet after a scathing report on the state of our major hospitals was published? Why did he not speak out on the behalf of the Jamaican people when chikungunya ravaged the land? A study of the Private Sector Organisation of Jamaica showed that the outbreak cost Jamaica’s economy $7 billion in lost production. The then Government did little to prepare the country for the arrival of the disease.

Why did Phillips adopt a posture of ‘hear no evil, see no evil’ when ex-Investment Minister Anthony Hylton pulled one of the biggest hoaxes since 1962 on the people of Jamaica?

We must never forget this travesty.

"The minister said the engineering company, Krauck Systems, will bring "considerable technical skills to the logistics hub projects", while Anchor Financial Group — a major financing agency with "deep funding capabilities" — would be the lead financier for the projects." (Jamaica Observer, April 16, 2015)

To date we have seen no evidence of the promised $US 5-billion logistic hub investment. We must never forget that in June 2012, Phillips imposed GCT of 16.5 per cent on "patties, flavoured milk, some processed fish products, buns, crackers, biscuits, corned beef, rolled oats, and syrups". (The Gleaner, June 1, 2012)

Phillips now pours scorn on the Administration for its tax package of $13.5 billion.

He says he and the PNP will "fix Jamaica again". Did he use "fix" as in local parlance, as in the sense of when an angry parent says to a child, ‘I am going to ‘fix your business’? Dr Phillips needs to tell us.

PS: Several of my readers directed my attention to a recent article by Michael Burke in which he untruthfully misrepresented the fact that I gave Dr Peter Phillips credit for ushering a decent bus system in the Kingston Metropolitan Transport Region. I must confess that this was my second time reading Burke. I left with a similar impression as the first: "I found your essay to be good and original. However, the part that was original was not good and the part that was good was not original." — Samuel Johnson

The axe forgets; the tree remembers. — Kenyan Proverb

Garfield Higgins is an educator; journalist; and advisor to the minister of education, youth and information. Send comments to the Observer or






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