Last week, former Prime Minister Bruce Golding, on Nationwide News Network (NNN), updated the country on the relatively quiet but very interesting general election in Guyana for which he had been a Caricom Observer. The election was distinguished by the collapse of the party of former President Forbes Burnham, now deceased, into third place.

When asked about Jamaica’s election, he observed that coming out of the of the 1970s both parties had agreed to the independent Electoral Office of Jamaica, which had become a model for the Caribbean. He expanded on this point in yesterday’s Jamaica Observer, calling for an independent inquiry into allegations of irregularities in an article entitled ‘Jamaica’s reputation for an efficient electoral system must be jealously protected’.

On
NNN, previously, Golding had noted that our founding fathers had required consensus for areas such as constitutional reform. He suggested, however, that the parties now needed to agree on other areas for consensus, with his first suggestion being education. It is, therefore, very timely that the official launch of the ‘Education Scorecard 2025: Assessing the Present, Guiding the Future’ — a collaborative initiative of the Caribbean Policy Research Institute (CaPRI), the Inter-American Dialogue (IAD), and the Postgraduate Center for Research & Intelligence (PCRI) — occurs today. The new report builds on CaPRI’s 2012 publication, ‘Prism of Possibility’, reviewing progress made and problems that persist.

I would add the need for a consensus on much faster growth; namely, doing whatever it takes to reach five per cent per annum growth, without which the vast majority of Jamaicans will forever remain poor. One of the concerns coming out of our recent very competitive and divisive election is that Jamaica’s extremely hard-earned fiscal consensus, represented by the Economic Programme Oversight Committee (EPOC), appears weaker. Personal income tax reform and the need to reassess the speed of debt reduction now that we are about to reach the 60 per cent debt-to-gross domestic product (GDP) ratio is necessary and even inevitable. However, achieving investment-grade status is also still a worthy goal, and personal income tax reform should be considered in the context of a broader tax reform framework and not as part of a competitive bidding process to win an election.

The key point is that our primary goal should now be faster growth rather than debt reduction. For the first time since the 1960s it is possible for Jamaica to finally move from the vicious circle of the need to constantly pay down debt, acting as a drag on growth, to a virtuous circle in which faster GDP growth allows the debt-to-GDP ratio to fall painlessly. This so-called fiscal space, potentially allowing much faster growth, is coming at just the right time, particularly in view of the potentially negative shock of a very volatile global trade system and our soon-to-be stagnant labour force.

Unlike, for example, the early 2000s, which Jamaica was unable to take advantage of as we were just recovering from our own domestic financial crisis, emerging countries no longer have the positive wind of globalisation at our backs.

The absolute focus of the next five years, therefore, needs to be on increasing productivity and industry diversification. Jamaica’s productivity problem requires a holistic set of reforms, best achieved through the pursuit of a shared problem-solving national consensus. The mechanism for consensus, the social partnership, already exists, but it will need to be managed very differently. Again, Golding may be able to guide us as the national planning summit process he was a part of in 2007 was a good template, but its efforts were simply overtaken by the multiple crises he faced, triggered by the impact of the global financial crisis on our then very weak macroeconomic foundations.

One critical use of our new fiscal space would be to buy our own equipment and employ our own people rather than always relying on foreign programmes to get things financed. For example, consistent investment over time in the police appears to be finally making a difference in reducing crime, although faster procurement and hiring could have made the reduction in crime much faster. It is beyond disappointing that the issue of crime never achieved the national consensus that hopefully still exists for fiscal discipline.

The time has come for Jamaica to finally make the needed technological and human investment in the legislative and court system. Jamaica can no longer view a fast legislative process as simply a source of competitive advantage, if we even do that much, like the strategies of a Singapore or Cayman. We should now view it as a national imperative in a world of extreme uncertainty, particularly those advocating repatriating judicial authority.

We cannot have both the fastest man in the world and one of the slowest legislative processes in the world. This is an area in which it should be more than possible to achieve consensus with the Opposition, as it is likely that it will be the Government after next that would be the primary beneficiary, or even governments after that, particularly at the pace at which we currently get things done.

The time has also come for us to make a number of other extremely difficult and complex reforms — many of which we have already waited several decades for — including in the areas of energy, labour markets, land, and taxation. Without a generally faster reform process, ending poverty in Jamaica is just a dream, barring the discovery of oil. Some of these reforms can definitely only occur with a national consensus, so the goal should be to start the process immediately. In the case of energy, we already automatically have a timeline of two years, but the process for the even more difficult reforms in labour, land, and taxation haven’t even started, at least to this observer. It is no coincidence that the last period of 5 per cent economic growth occurred after the comprehensive tax reform of 1986, along with the expansion of the new garment industry and all-inclusive tourism.

One of the key opportunities the Government has is the fiscal cushion that allows it, in the words of my father, “to balance the inevitable winners and losers of tax reform”. The 1986 tax reform had a world-class panel of international experts all funded by USAID, the full support and cooperation of the local tax authorities, and an identified fiscal cushion. Within a few years, it achieved a near doubling of revenues. A similar success is overdue.

Keith Collister

The Government must do whatever it takes to reach five per cent per annum growth, without which the vast majority of Jamaicans will forever remain poor..