We're getting to growth, despite the PNP's bad-mouthing

GARFIELD HIGGINS

Sunday, August 18, 2019

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The bird builds his nest, then he flies up the hill. — Jabo proverb, Liberia

 

“Yuh haffi creep before you walk” is a local adage which has significance beyond physical and philosophical maturation. It has applicability also to how small economies, like ours, have to innovate, grow, and develop.

Check this, a little over 50 years ago, Singapore's main exports included mosquito coils, matches, and fishing hooks. The Singaporeans borrowed aspects of the economic growth model which Jamaica used in the early 1960s. Singapore's per capita income was US$400, in 1965. She was expelled from the new Federation of Malaysia in that year. Her small population at that time was mostly uneducated. Corruption was rampant and social upheavals were commonplace. She had no natural resources to trade with her neighbours or the wider global economy. Notwithstanding all those challenges, under the visionary leadership of its late Prime Minister Lee Kuan Yew and his team they set out to build a new Singapore. Lee Kuan Yew, among other things, encouraged Singaporeans to free themselves from the clutches of mindsets, which stigmatised certain métiers as 'lesser-jobs'. Constant innovation in all forms of economic activity was adopted as a near-national religion, alongside rapid and meticulous advancements in education and training.

Professor of business administration at Harvard Business School, Clayton M Christensen, et al, in an insightful article entitled 'How investment made Singapore an innovation hub', remarked, among other things: “Singapore invested in attracting foreign direct investments (FDI), which funded innovations in the country. Singapore's foreign investments also created many jobs, thereby causing education to be more in demand. The more FDI Singapore attracted, the more education became in demand, and the more Singaporeans learned how to innovate. This innovation, in turn, allowed it to continually invest in increasingly complex products that created higher-value jobs for Singaporeans.”

Lee Kuan Yew did not merely want Singaporeans to learn how to fish, ultimately he wanted his people to become major shareholders and owners of industries. This was one of the ways in which Singaporeans would achieve national, regional, and international respect, Yew posited this in some of his speeches. Today, Singapore's exports, include high-end software, security engineering, semiconductor devices, biopharmaceuticals, automotive and aviation technology, clothing, cloud-based accounting software for small and medium-sized enterprises, industrial technology, building technology, consumer business-oriented, and social networking services.

Global companies with regional headquarters in Singapore [not an exhaustive list] include Brother Industries (country of origin, Japan), Sony Corporation (Japan); Facebook, Microsoft, Apple, Google, Twitter, LinkedIn, General Electric (USA); Ferring Pharmaceuticals (Switzerland); Phillips (Netherlands); Roche (Switzerland); BMW (Germany), Bayer AG (Germany); CIC (France); Nuscience Group (Belgium); Aon (United Kingdom). Remember, 50 years ago, Singapore's main exports included mosquito coils, matches, and fishing hooks.

There were significant social/racial inequalities in Jamaica during and after the 1960s. Contrary to what some would have us believe vast social/racial inequalities did not disappear like a flash of lightning in the 70s. Admittedly, for a country that had just gained political independence from a colonial infrastructure which was built on gradations of differences, independent Jamaica did not do enough fast enough in the 60s to dismantle the unequal social/racial foundations which Britain left behind. Notwithstanding, Jamaica was ahead of Singapore, especially with respect to economic growth for much of the 1960s.

Then came Michael Manley. The People's National Party (PNP) took power in 1972 and began an experiment with democratic socialism, hatched from Fabianism, which had its genesis in Britain. It was mostly downhill from there.

According to figures by the Planning Institute of Jamaica, in 1971 the Jamaican economy grew by almost 12 per cent in that one single year. This is equivalent to the cumulative growth under Dr Omar Davies' entire 14 years as minister of finance between 1993 and 2007. Davies' high interest rate policy crippled local entrepreneurship in the 1990s.

These companies capsized under the P J Patterson/Dr Omar Davies time at bat: (This is an abbreviated list) 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 detention centre by the PNP. Add to those 45,000 small- and medium-sized businesses that went under during the 1990s.

Thousands of honest businessmen and women were ruined. Many have migrated. The association that represents Finsac'd [referencing the Financial Sector Adjustment Company] entrepreneurs says 20 committed suicide. Scores today are like dead men and women walking; shattered human shells who cannot bring themselves to pick up the pieces. We must never travel this death-dealing road ever again.

 

Dignity in honest work

The PNP, in recent months, has resurrected a putrescent campaign of bad-mouthing certain categories of honest workers and investors who are putting hundreds of millions of dollars into our economy. No honest work is undignified. My first summer job was at a shoes store right across from the Parade Square in downtown, Kingston. I was paid on commission. I literally went into the bus park, invited folks across the road to the store and fitted the shoes on their feet. I had just come to Kingston and started my training at The Mico Teachers' College. I made quite a tidy sum that summer and never for one moment did I feel that I was doing demeaning work.

Those who continue to berate jobs in the rapidly expanding business processing outsourcing (BPO) sector, for example, perhaps should spend some time to understand that the sector “created 32,500 jobs up to September of this year” ( The Gleaner, December 16, 2018). There are hundreds of especially young people who depend on the industry for their honest bread.

Some months ago I had to rush home to collect a document for a board meeting. Just after I exited the house it started to rain lightly. Along the way, I stopped and gave a lift to a young lady. She and I started chatting. She told me she was a student at the University of Technology, Jamaica and worked at a BPO centre at The University of the West Indies, Mona. She did not consider her work at the BPO infra dig. She was, in fact, very happy that boarding, work, and study are within minutes of each other. I have seen data that indicate she is not singular in that respect.

Those in the PNP who constantly decry BPOs and Chinese investment should tell us what new and/or better alternatives they have identified. Recall Peter Bunting's tirade about a new type of “economic colonialism” by China in Jamaica. He said, among other things: “Fifty-five years of our Independence from Britain, many Jamaicans are concerned that we are once again undergoing a new form of colonialism — a form of economic colonialism by Chinese operating in Jamaica.” ( The Gleaner, August 10, 2017) Members of the PNP sensibly dissociated themselves from his rant, but since then others in its leadership have taken up where Bunting left off.

Some of those who take apparent pleasure in bad-mouthing the BPO sector — in similar fashion as the garment industry which employed thousands of especially females in the 1980s — know “which side dem bread butter on”, as rural folks say. Recall how the PNP demonised and branded the garment sector of the 1980s as slavery? There are some among who desperately want to perpetuate the 'suffera mentality'. Right-thinking folks must prevent this with every sinew. How can not having a job be better than having one?

No one with a modicum of sense can deny that our economy is in a better state today than it was three years ago, four years ago, or a decade ago. Unemployment is at a 50-year low, at 7.8 per cent. I believe this is a good indication that we are regaining some of the economic respectability we lost in the 70s and 90s.

According to recent data put out by the Statistical Institute of Jamaica (STATIN), and restated in a tweet by the Economic Programme Oversight Committee (EPOC) last Tuesday: “Youth unemployment in Jamaica (14-24 year olds) in April 2019 stood at 19.5 per cent, which is an improvement from 25.9 per cent in April 2018. Nineteen and a half per cent is right around the 20 per cent average for emerging and developing economies.”

All well-thinking Jamaicans should be happy for this very good news. No one should wish that we go back to the days when this was our country's reality: “Youth unemployment in Jamaica has reached crisis proportions and is now socially unsustainable. In 2013 unemployment among Jamaicans 14 to 24 years old was approximately 39 per cent.” ( Jamaica Observer, June 22, 2014)

This sad admission by Robert Pickersgill, then PNP chairman, which was published in The Gleaner on July 27, 2015, must never be revisited upon Jamaica: “It's the first time in the history of Jamaica that you have so many qualified young people, including secondary degree and doctorate, and they are having difficulty gaining employment.”

These days I am also overjoyed to see headlines like this: 'More jobs for men as unemployment falls below 8 per cent'. ( The Gleaner, July 19, 2019) The news item said, among other things: “The new hirings of men outpaced that of women in the latest quarterly jobs survey published by the Statistical Institute of Jamaica...

“Combined, the increase in employment of both genders resulted in an overall dip in the number of Jamaica's unemployed by 25,900 in the April 2019 survey, and cut the unemployment rate, or UER, to 7.8 per cent. Comparatively, the UER was two basis points less than the 8.0 per cent recorded in the January survey and two percentage points lower than the 9.8 per cent for April 2018, signalling continuing improvement in Jamaica's jobs picture.

“Data from STATIN's April 2019 Labour Force Survey showed that the number of unemployed males fell by 13,000 to 39,900 in April 2019. Over the same period, the number of unemployed females was 65,500; a decline of 12,900.

“Over the period, construction accounted for the largest increase of 9,500 in male employment, followed by elementary occupations, up 6,500; and service, shop and market sales workers, up 6,300.”

The majority of inmates in our prisons are male. The majority of murders in this country are committed by males. The majority of their victims are male. The majority of the individuals who often stand on street corners 'rubbing out their hand middle' are male. I am happy that more women are being employed, and I am especially happy that more males are finding employment. This can only augur well for our country.

Sadly, some who seem to wash their persona with lime juice each morning are unhappy with the good news of Jamaica's record low unemployment. They should spend some time trying to understand how countries like Singapore, South Korea, China, and others gradually moved up the jobs value-added continuum. They predominantly started near and/or at the lower end, but through guided, and sometimes unguided, knowledge transfer — admittedly some of it quite dubious — enhanced training, and innovation, these countries continue to progress.

I believe with continual knowledge transfer, training innovation and education, Jamaican workers will achieve more very quickly. As this happens, like many places in the world, wages will improve and our workers' hand at the negotiation table will be strengthened, aided by the necessary strict State supervision and uncompromising enforcement of our laws. I fully understand that the so-called 'invisible hand of the market', left to certain interests, will forever clap in one direction.

 

No more

Social media posts threatening and encouraging street demonstrations and wanting to do damage to the reputation of local and international companies do not serve the objectives of Jamaica. The previous Portia Simpson Miller-led Administration was characterised by four years of suffocating austerity. Dr Phillips was the finance minister and de facto prime minister during those years.

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).

Dr Phillips placed 16.5 per cent General Consumption Tax (GCT) on “patties, raw food items, flavoured milk, some processed fish products, buns, crackers, biscuits, corned beef, rolled oats, and syrups.” ( The Gleaner, June 1, 2012)

He imposed $58 billion in new taxes during his time as finance minister. Our country cannot go back to that.

Anti-business and anti-economic growth rhetoric by the PNP must be repudiated.

It succeeded in the 70s and these were some of the tragic results. “In 1980, at the end of Manley's first eight years as prime minister, the tourist hotels were almost empty, and so were the supermarket shelves. Much of the middle class had moved to Miami or Toronto. Almost 900 people had been killed in the run-up to the election, partly as a result of warfare between gangs allied to political parties.” ( The Economist, March 1997).

Garfield Higgins is an educator and journalist. Send comments to the Observer or higgins160@yahoo.com.


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