THE plea by Foreign Affairs and Foreign Trade Minister AJ Nicholson for a revision of Jamaica’s status as a middle-income country in order to qualify for more development assistance reflects the Government’s dire need for concessionary financing; but it also speaks volumes about our parlous position in the world in this 50th year of Independence.

As reported in a front page story in the Observer last Wednesday, the argument is that the World Bank classification has resulted in a cutting of critical concessionary financing to the island as this kind of international assistance is reserved for the poorest nations.

“What we are hoping is that there will be a reclassification. The truth is that it is going to be difficult, perhaps impossible, for us to access the funds that can help us in our development. And especially the development that is sustained if we are classified in the way that we are in this point in time,” Mr Nicholson said.

“We are an indebted country. We have many of the challenges that some of the countries who are not so classified have,” he told world diplomats gathered at Jamaica House Tuesday as part of Diplomatic Week activities.

Mr Nicholson’s call for a “rethink” of how Jamaica is classified echoes a similar appeal made last September by then Foreign Minister Dr Ken Baugh; so we can assume that this is a settled, official Jamaican position.

Information on the World Bank website states that economies are divided according to 2010 gross national income (GNI) per capita, calculated using the World Bank Atlas method (measured in US$). The groups are: low income, $1,005 or less; lower middle-income, $1,006 – $3,975; upper middle-income, $3,976 – $12,275; and high income, $12,276 or more.

Jamaica, according to that method of calculation, has a GNI per capita of US$4,750 (2010) which places the country at 111 out of 215 countries ranked. Our GNI puts Jamaica at the low end of the ‘upper middle income’ classification.

Based on the classifications, countries are placed in various lending categories: at the bottom are countries which can access the International Development Association (IDA) — the Bank’s concession window. These are countries “that had a per capita income in 2010 of less than $1,175 and lack the financial ability to borrow” from the bank. “IDA loans are deeply concessional — interest-free loans and grants for programmes aimed at boosting economic growth and improving living conditions.”

Bilateral assistance from developed countries as well as support from private foundations and non-governmental organisations tend to follow the model of the World Bank classifications.

Indeed, the minister said that the classification was already costing the island millions of US dollars. For example, the Global Fund was a major contributor to Jamaica’s fight against HIV/AIDS in 2010, but that has been discontinued. Support for environmental protection and other programmes could also be affected.

Given the tight budgetary constraints in which Jamaican governments have had to operate for sometime it is understandable that Mr Nicholson would be pleading for every available dollar of free money. That’s a part of his job.

But what he specifically wanted was not entirely clear from the newspaper story. Hopefully, we can assume that he was not arguing for a lowering of Jamaica’s classification so that we fall into the concessionary line. Presumably, the argument must be to broaden the categories so that Jamaica qualifies.

Either way, it is a difficult ask: First, the large number of countries at the ‘bottom’ of the list means there’s great demand for concessionary assistance; second, there can be little expectation of increased development support from the advanced economies as the crisis in global capitalism deepens; third, foreign aid for ‘third world’ development has delivered much less than promised since European colonial empires collapsed more than half-a-century ago, so we cannot rely on it for our development.

The World Bank tables listed 47 countries, mostly in Africa, which fall below the US$1,175 concession threshold.

Simply put, Jamaica should not be competing with these countries for the trickle of available concessional aid. And, of course, we cannot continue to underperform as we have for the past four decades or, one day, we may just qualify for the concession line!

Instead, as the new Portia Simpson Miller administration takes control, the emphasis must be on addressing the underlying causes of our underdevelopment and do what’s necessary to fix it.

This may be a good time to take a closer look at something else from the World Bank, namely, the report titled Jamaica Country Economic Memorandum: Unlocking Growth released last May. It documented in 300 pages of detail what we all know: the Jamaican economy has woefully underachieved since Independence.

“Jamaica was one of the world’s slowest-growing economies in the last four decades. In the 2000s, Jamaica’s average real GDP growth ranked 180th out of 196 countries. Jamaica’s ranking in terms of average real GDP growth continuously deteriorated during 1960-2008. Jamaica also lost ground against countries in Latin America and the Caribbean. Its ranking in the 2000s was 29th out of 34 countries,” said the report.

The authors compared Jamaica with its closest 19 peers in per capita GDP between 1970 and 2008 and concluded: “Jamaica’s real per capita GDP growth was 13 per cent, and its rank within this group of 20 countries fell from seventh to 18th. This growth was the lowest in the entire group.”

Over this time, the country attracted large inflows of foreign investment, especially in bauxite mining and alumina production, tourism, port and infrastructure development and, more recently, the information and communication sector, but this did not translate into high productivity.

The World Bank identified three main obstacles to growth in the Jamaican economy: Crime; low human capital in which 72 per cent of the labour force lacked training; and lopsided fiscal and budget-management practices and policies which constrain growth and reduce the tax take by some 20 per cent.

The suggested answers are obvious: address crime as a national priority; reduce tax distortions by expanding the tax net and minimising waivers, concessions and special privileges; increase labour-force skills through training.

As the World Bank report stated, Jamaica has an opportunity to grow much faster than it had in the past and the key to unlock this potential is within its reach: turning its high investment into high productivity.

These are not easy fixes but they have to be done. Among other things, fixing them requires a new conversation about development centred on improving people’s lives, about governance that is transparent and accountable, and where corruption will be rooted out and punished. These are within our grasp. kcr@cwjamaica.com