Wanted: All Hands on Deck
UNLIKE the Malaysian aircraft (MH370), which disappeared from radar on March 8, on its way from Kuala Lumpur to Beijing and has not been seen or heard from since, we know what happened to the MV Sewol. The South Korean Ferry capsized April 17, ending the lives of over 300 students from Danwon High school in Gyeonggi Province, South of the Capital Seoul. Reports say the children amount to almost the school's entire junior class. In the wake of the incident, some 15 crew members, including the captain, have been arrested as it became clear that many protocols were breached leading to the accident and bungled rescue efforts. The school's vice-principal, who chaperoned the children, survived the accident but committed suicide shortly after. On Sunday, the Korean prime minister resigned. South Korea is devastated. It is a terrible tragedy in a country that works so hard to get things right.
Our ship of state is tilted at a dangerous angle and most times it seems that, just like the ill-fated ferry, the rescue effort will fall way short. The captain, incidentally, jumped ship leaving passengers and crew aboard. Finance Minister Dr Peter Phillips, apparently, has no such intention; he is committed to battling the tumultuous waves.
I was one of those who thought last week that the tax Phillips announced on bank withdrawals was not that bad. No, I am nowhere near the dark side, nor am I any kind of Ralston Hyman. I merely felt, that at the point of each transaction, the fees would be relatively negligible and so would not be too sharply felt. At the same time the volume of those transactions would get him the 2.5 billion which he needs to help keep the country on this IMF track which, dubious as it may be, seem like our only option at the moment.
It is not like we place much value on 10 cents or $10, or even $100. People kick coins out of the way, vendors do not give back "small change" because "ah nuh nuttin", and whenever someone asks me for money I know I cannot be so out of order as to offer up less than a Jamaican $100. In fact, nowadays, not even US$100 is enough. For me, it is light bill or gas money for a month, but for many people "ah monkey money dat".
The backlash was swift. By the end of the week Phillips seemed to be backing off and pondering where else he would find the money.
Although it is repeated so often, it seems sometimes that we do not all grasp the fact that the country is "under water". As someone who lived through the housing crisis in the United States, I do not have to be any kind of economist to understand what it means when my neighbour borrowed more than he could afford in the first place and when the value of the property appreciated on paper, he took out the equity, in reality increasing his loan amount. He spent too much renovating the property and suddenly the market crashed. He now owed $200,000 more on the property than it was worth. To make matters worse, he lost his job; there was no income to cover his now seriously bloated expenditure. His problem was unfixable.
The Economist magazine, in a story headlined 'Gloomy Jamaica' published on November 14, 2009, described our economic problems in exactly those terms — unfixable. I have heard the view elsewhere and I have heard the counter — that it is fixable with drastic action, including addressing a slew of problems that militate economic growth. The annual Global Competitiveness Report for 2013-14 prepared by the World Economic Forum (WEF), for example, ranks Jamaica 94 out of 148 countries. The most problematic factors for doing business are ordered as inefficient government bureaucracy, crime and theft, corruption, tax rates, access to financing, tax regulation, poor work ethic in national workforce, inflation, inadequately educated workforce, inadequate supply of infrastructure, insufficient capacity to innovate, policy instability, among others.
By comparison, the island of Mauritius, off the coast of Africa, in the same report ranked number one in Africa and 45th globally on the same 12 pillars of competitiveness, including: infrastructure, education, financial market development, technological readiness, and market size. The report defines competitiveness as "the set of institutions, policies, and factors that determine the level of productivity of a country".
Mauritius, when it gained independence from Great Britain in 1968, immediately began to act like a grown-up nation, looking for ways to overcome its major problem of unemployment, unequal income distribution and an overall path that the country could sustain. Diversifying from a monoculture economy (sugar) was a priority, the economy now thrives on a broader agricultural base, textiles, high-end tourism, financial services and communication technology. Social growth includes more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure. Since 2005, the country has provided free transportation for schoolchildren, the disabled and senior citizens.
Experts say the country still has a lot of problems. It faces significant challenges from climate change and, despite relative peace, some ethnic groups complain of discrimination. Some of its economic growth is also being attributed to the fact that it has become a tax haven for Asian businessmen; a charge denied by the central bank governor.
There is general agreement, though, that much of its success lies in its "concerted strategy of nation building" adopted right after independence, including, negotiated economic redistribution, good balance between economic and political power, and the building of strong institutions". Interestingly, the country uses a "best loser" system, whereby an independent commission appoints up to eight losing candidates to each new national assembly.
These are foundational issues that we have not yet addressed and which are clearly inimical to national development. While Phillips has the immediate responsibility for the country's finances, the problem belongs to all of us if the ship is to be salvaged. Cliché it may be but the solution requires all hands on deck.
Washington, DC-based scholar Dr Grace Virtue is a public affairs practitioner, social policy analyst and social justice advocate. Comments to email@example.com