WE are happy to note that the Planning Institute of Jamaica (PIOJ), under the dynamic leadership of Dr Gladstone Hutchinson, has formulated a new growth strategy for Jamaica. In our view, it provides the specifity necessary in Vision 2030.

However, the new strategy faces three major hurdles: first, the 50-year tradition of not implementing development plans; second, the fiscal strictures of the International Monetary Fund (IMF) stabilisation programme which could deprive the plan of sufficient funding, and third, the possibility of unfavourable external developments, eg escalations in the price of food and oil.

The new element in the strategy is that in addition to tourism and domestic food production, there is expenditure on infrastructure/construction. This offers a significant multiplier effect because of a dense raft of forward and backward inter-sectoral linkages. It can, depending on the type of project, generate considerable employment across a range of skill levels.

Unlike tourism and bauxite/alumina, which are concentrated in certain parts of the island, infrastructure and construction can take place across the entire country, dispersing the income and employment effects. Investment in infrastructure can contribute to increased productivity and enhanced international competitiveness in goods and services.

These advantages and externalities are not lost on the Barack Obama administration whose plan is to stimulate growth and employment by expenditure on infrastructure and the military industrial complex.

Seeking to create to a greater degree of an internally driven dynamic in a highly open developing economy such as Jamaica is an admirable goal and a major policy challenge. However, the Jamaican economy will remain highly open and may become more so the pinchers of liberalisation and globalisation. This is not undesirable because the developing economies that have achieved the highest rates of economic growth have done so while increasing openness.

Openness is a necessary, not sufficient condition, therefore what matters is not the extent of openness but the pace and sequencing of openness.

The problem to be addressed in opening is to approach the process in a proactive and strategic manner. The goal must be to reorganise the external economic relations of Jamaica to accomplish two objectives — one at the product level and the other at the macroeconomic level.

There must be specialisation in those exports which can be produced competitively and for which global demand is rapidly growing.

Jamaica must rebalance its external economic connections to depend less on the United States and the European Union, which are in prolonged recession, and move quickly and comprehensively to ramp up its engagement with the emerging market economies and the BRICs (Brazil, Russia, India and China).

These are now the most dynamic growth poles of the world economy and are likely, in the medium term, to outperform the currently developed countries. This will necessitate a redirection of international economic policy, a long overdue reorientation of foreign policy and watershed change in the mind-set of the private sector.

We recall that Ambassador Richard Bernal, in the 2008 GraceKennedy Lecture, stressed that economic development will require harmonisation and complementarity of the internal economic policy and external economic relations. He was right.