In the early 70’s, all signs pointed up for Jamaica. Viewed as a stable island nation with abundant natural resources and strong institutions,the country was poised to become the Singapore of the Caribbean. Instead, it has become a regional laggard, with an insupportable debt and near zero per centgrowth for decades. What the hell happened? More importantly — what’s next?

The current Administration recently corralled some of the nation’s brightest minds to identify socio-economic solutions for the way forward. In the main, the Economic Growth Council (EGC) report reflects multisectoral consensus from an array of stakeholders, and also draws on the work of previous similar studies which were found perfectly fossilised in the farthest reaches of Jamaica House.

The odds of the recent EGC report joining its predecessors in Jamaica’s “what if “ library are unfortunately pretty high. Articulate and compelling, it is both a potential road map for the nation’s future and a damning indictment of its past, but it offers precious little hope for Jamaicans today.

This is because the overwhelming number of Jamaicans live their lives day by day. They do not bother to read the big man’s fine print for the future and are scarcely motivated even to vote — because none of that seems to really matter. What matters is if ‘money a run’and ’nuff tings a gwaan’; that’s a parallel reality far removed from that of the well-intentioned, well heeled EGC.

So how do Jamaica’s leaders bridge this vast disconnect between policy and populace? Where are the common points of contact that can spark the light of hope in the vast netherworld of Jamaica’s underground economy? What are the game-changers that will jumpstart Jamaica’s engine today while the EGC charts tomorrow’s course ?

Perhaps we can answer those questions by identifying what definitely won’t work:

-a defunct debt strategy

-a regressive tax strategy

-a feeble crime strategy

These three strategies are the critical core; get them wrong, and all of the others are guaranteed to fail as well, so let’s explore them a bit.

DEBT STRATEGY

In a world epically awash with low-cost capital, Jamaica recently borrowed on the international market at a mind- boggling 7.0 per cent interest rate, on par with the crippling PetroCaribe debt deal. A debt strategy that embraces expensive new $US debt is a highway to hell, but is being marketed as a show of international confidence. Really?

Instead, how about a bipartisan mandate to utilise the excessive Net International Reserve for phased debt buybacks? How about a series of 30-year 3.0 per cent Diaspora bonds to substitute for the high -cost, short-tenor PetroCaribe debt stock?

How about a highly incentivised, expert debt mitigation team to renegotiate terms en bloc with institutional debtholders? Not the smoke and mirrors of bygone debt exchanges, but structured principal haircuts, rate reductions, and term extensions — real money that Jamaica can’t afford to pay.

This was the elephant in the room at the EGC sessions yet somehow it eluded capture. Jamaicans need to be told the brutal truth that we’re in a debt trap that no amount of mercurial growth will ever offset it.

The EGC chair is a financial rockstar and the vice chair a financial rocket scientist. Their world-class skill sets would have better served the nation if they were deployed on a debt mitigation mission, rather than merely compiling known data.

Platitudes are no substitute for truth and reports are no substitute for action. The international bankers chuckle at Jamaica’s meek compliance, even as disastrous debt management enslaves future generations. Debt mitigation is the fundamental game-changer. Without it, long-term Jamaica bets are off.

TAX STRATEGY

Only a fraction of locally registered businesses pay corporate taxes and only a fraction of the Jamaican workforce pay income taxes. Can one really expect a workforce of the few to provide the revenues to service the many?

Nobody likes general consumption tax (GCT), which is a positive sign of its universal effect. The formal workforce don’t like high income taxes either, especially since they appear to be the only ones paying it.

And as for NHT deductions, that’s a classic case of badly misguided socialism — taking from the many to provide for the few. So what’s both fair and feasible in terms of taxation?

Hate to say it, but GCT is the way to go, since it spreads a very wide net. A progressive tax strategy would include a phased annual increase in the GCT rate to 20 per cent from the current 16.5 per cent, and a concurrent reduction in both corporate and personal tax rates to 15 per cent,spurring both business investment and personal consumption.

The objective of fiscal policy should be both to meet government revenue needs and stimulate economic growth. The current administration is correctly focused on GCT revenue collection, but the other shoe is yet to drop.

There is no rationale for the NHT’s continued existence, or for the regressive tax that bears its name. Get rid of them both and return any surplus on a pro-rata basis to contributors who never benefited — that’s real fiscal stimulus.

Some other notable dinosaurs? Stamp duty, transfer tax, and registration on real estate transactions cost a seller some 7.25 per cent of the deal sum — before lawyer and broker. This is a killer to the financial velocity of the property market, and a major retardant to the growth of the construction trade.

Remember that vast swathes of the local workforce could be classified as unskilled or tradesmen. A vibrant construction industry would be capable of absorbing large numbers of our young men and women with otherwise limited economic opportunity.

Eliminating transfer tax, with a cost split on title transfer at a 4.0 per cent rate would bring the seller’s deal costs down to 2.25 per cent, unleashing an inventory of sterilised real estate assets, and immediately stimulating new development. If we really want to push the growth envelope, lets also exempt construction materials from GCT and ignite this critical sector.

Another no brainer is the tax on interest. This one simply makes no sense. In a nation with a low savings rate, limited pension coverage and a decaying dollar, the taxation of interest is a retrograde measure that inhibits capital formation and effectively penalises the poor and the pensioned.

The dollarisation of local deposits has become the default market response for disincentivised savers. Meanwhile,the Diaspora keeps its money offshore, because money is motivated by the financial hospitality of the host nation. Without a zero tax interest regime, kiss Jamaica’s offshore financial centre ambitions goodbye. Just ask Panama how to get it done.

CRIME STRATEGY

Both the current and former Ministers of National Security are amongst the smartest and toughest hombres in their respective political camps — yet Jamaica remains a very dangerous place, where life is cheap, guns are aplenty, and justice is often deferred or denied.

There are many reasons for this sad state of affairs, but there has been a notable lack of actionable remedies, although the EGC report has made a solid start.

Just as the PNP held Jamaica political hostage for 23 years with a relatively small cohort of incentivised activists operating in the vacuum afforded by a largely disengaged electorate, so has a small criminal cadre penetrated every orifice of the economy and established parity or dominance against the state.

Many will recall the 2010 battle for Tivoli,when the JDF formed the last, desperately thin line against criminal anarchy in this country. The emergency powers granted by the State brought the crime gangs to heel, but was lifted before they were crushed… this was a huge mistake that haunts us still. Let the educators and social services do what they can, with luck and a generation or two maybe the root causes can be addressed..but it’s a very long shot.

In the interim Jamaica will remain a nation in undeclared war with a brutal scourge that permeates every level of society — but,if we’re at war,why not declare it so?

An initial three year State of Emergency would be a useful place to start. So would a tripling of the National Security budget, a doubling of the mobile cohort, the establishment of a local FBI equivalent under foreign command, the introduction of live bounties, summary justice for gun crimes, coastal drone patrols, the detention of existential threats at Guantanamo, and targeting a goal of 100,000 trained, licensed firearm holders.

Tough stuff, but most Jamaicans would happily exchange some civil liberties for the prospect of sustained safety.

Safety builds confidence, confidence encourages investment, investment generates jobs, jobs bring hope, and hope values life.Its a virtuous cycle that begins with a no holds barred attitude to the fight for a peaceful future.

In a country at war the blame game and political prayer wont cut it. Only overwhelming power and unremitting resolve will suffice.

Imagine you lapsed into a coma for three years and when you woke up you learnt that construction was booming, disposable income and employment were trending up, the debt service curve was trending down, savings were no longer taxed, real estate costs were reasonable, there was a soldier on every corner, hard core criminals were being deported to Cuba and there was a cheque from the ex-NHT in the mailbox.

Surely that’s a future worth the fight,and well within our grasp. But erudite studies can only go so far.

Its time for actionable game changers that can make Jamaica great again.

Roger Brown is the founder and managing director of Panama-based Risk Control SA, which provides investment advisory, asset protection, and offshore financial services to international clients. Through Professionally Panama, its business concierge platform, Risk Control also provides custom corporate, health, and hospitality services.