It's leadership, stupid!

Thursday, November 15, 2012

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A timely reminder to Jamaica and other small developing countries that competitiveness is essential to achieving economic growth has come from Dr Densil Williams of the Mona School of Business and Dr Beverley Morgan, entrepreneur and former head of the Competitiveness Company.

They have put their arguments cogently in their new book Competitiveness of Small Nations. What Matters? which was launched on Monday evening.

The authors marshal copious time series data to show that the small economies of the Caribbean (Jamaica, Barbados and Trinidad and Tobago) are not performing as well as other small economies, because these countries have not modernised their economies sufficiently to effectively integrate into the world economy and enjoy the benefits of globalisation.

Not only is the economic performance disappointing but it has deteriorated in recent years. This dire situation is compounded by the global economic crisis.

The way to improve the disappointing rate of economic growth of the Caribbean countries is to learn the lessons from the best performing small economies. The small economy that has performed the best in recent years is Singapore which one commentator recalled was behind Jamaica in the 1960s but is now far ahead by every economic indicator. By benchmarking Singapore they derive an understanding of the drivers of economic competitiveness which are critical for laying the foundation for strong economic growth, especially for small states.

There are hopeful signs. Dr Morgan re-assures the audience that socio-economic problems can always be addressed by the agency of human action; and there are also pockets of competitive economic activity. The issue is how to create a business environment which facilitates competitiveness throughout the economy.

They suggest that since Singapore is the best in class among the small economies, the lessons learnt from their experience can be adapted to the unique circumstances of each national economy.

The lessons they derive from their analysis of the experience of Singapore are that the quality of infrastructure is vital, the quality of institutions is critically important, macroeconomic stability is necessary and leadership is what really makes the difference. Leadership affects the other variables but it is a tangible because leaders are born; they are not made.

If Williams and Brown are correct, and we believe they are, then poor economic growth in Jamaica and the Caribbean is a direct consequence of the poverty of leadership or the absence of leadership, which is primarily a failure of Caribbean politicians. It is also a serious indictment of failed leadership from civil society, the business sector, the trade unions, the civil service and academia. Ambassador Dr Richard Bernal, who launched the book, suggested that the inadequacies of implementation can be understood in developing countries but the lack of vision is an enigma and hence the economic crisis of the Caribbean is also an intellectual crisis.

The former Jamaican ambassador to the United States singled out the Caribbean economics profession for excoriation. You need not guess that he has our support.




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