A programme for national recovery must put Jamaica first
In early 2003 I started working on a document for the Jamaica Chamber of Commerce called ‘A Programme for National Recovery’. The title was actually a straight copy of the programme implemented by Ireland in 1987, which was the prelude to its now-famous Celtic Tiger turnaround.
The Irish turnaround had several key components: a painful process of quickly achieving a balanced budget and thereafter reducing its debt-to-gross domestic product ratio; a genuine social partnership, particularly in the key early years, aimed at problem-solving as opposed to just turning up for a meeting; and a low single corporate tax rate to attract investment and defang the European Commission complaints about ring-fenced tax incentives.
This was all combined with a singular focus on using its US-based overseas diaspora to complement a very aggressive and well-funded programme by the Irish Development Agency (its equivalent of Jamaica Promotions Corporation ) to attract US multinational investment, ultimately creating more than half a dozen new industries as huge new export sectors. Despite its fiscal squeeze, the Irish were willing to prioritise its investment promotion agency.
Digicel Founder Denis O’Brien organised a study trip to Ireland for a joint private sector and union study group in late 2003 which ultimately became the so-called Partnership for Progress. A partnership agreement was finally signed a decade later under Prime Minister Portia Simpson Miller, shortly after the second International Monetary Fund (IMF) agreement in 2013. As part of that agreement, Jamaica quickly achieved a balanced budget, and we have now become the IMF’s poster child for debt reduction. We did not achieve the industrial transformation required for fast growth, however.
The damage wreaked by Hurricane Melissa presents Jamaica with another fork in the road. Do we finally adopt a true growth plan as part of a genuine ‘Programme of National Recovery’ or do we remain in the highly partisan post-election mode that has distinguished our parliamentary discussion both pre- and post-Melissa? If the time for national unity is not now, when will it be?
Having made continued progress for many decades from the absolute nadir of the 1970s, recent trends in partisanship, governance, and media suggest we are starting to follow the now poor examples of the metropoles. Post-Melissa, Jamaicans should treat this as reset to take a genuinely inclusive approach to national recovery, a Jamaica-first approach that puts country above party, recognising that this will be more difficult for some than others.
A good starting point in the current crisis is to look at the issue of infrastructure and, subsequently, land ownership. Ernst and Young’s head of tax in Jamaica, John Butler, who is also a director of the Jamaica Chamber of Commerce, highlighted a recent Irish report titled ‘Accelerating Infrastructure Report and Action Plan — Lessons from Ireland’. Butler notes: “Ireland recently commissioned a comprehensive review of its infrastructure delivery system after recognising that major projects were taking longer and becoming more unpredictable. What the review found is highly relevant to Jamaica: Delays were not caused by engineering challenges but by the way Government processes were organised. Too many agencies were working in isolation, duplicating each other’s efforts, asking for the same information, and running sequential approvals that could easily have been done in parallel. The lesson is clear: Faster delivery is not about cutting corners but about cutting duplication.”
He adds: “A striking insight from the Irish review is that lengthy internal procedures do not necessarily produce better decisions. When internal decision cycles stretch into months or years, even well-designed projects become more expensive and harder to deliver. Rigour without speed functions like a hidden tax on development, paid for through rising costs, slipping timelines, and reduced investor confidence.”
In a recent conference of our local developers association, Minister Audrey Marks noted, from her pre-Melissa EU arranged trip to Estonia, that through digitalisation (meaning creating a new digitally driven process rather than trying to merely digitise the old paper-driven process) Estonia had managed to reduce development approval times even below former Prime Minister Bruce Golding’s famous but never achieved target of 90 days to only 30 days. A change of how we operate in this area is now absolutely critical to the rebuilding process, so we must make digitalisation in this and other areas an absolute priority.
A critical associated area of change post-Melissa is our ridiculously slow legislative and regulatory process which needs to become a key competitive advantage for Jamaica. Amongst the many areas in need of urgent change, Jamaican’s current need for charity stands out.
To quote Butler again, “Taxpayers can claim a deduction for donations to charitable organisations, but two conditions must be met. First, the organisation must hold an active charitable registration, which can be verified on the Companies Office website. Second, the total value of donations claimed in a year cannot exceed 5 per cent of statutory income.”
The amount is miserly, discourages corporate giving, and was obviously designed to protect the revenue during our decades-long fiscal crisis. We also need to think about how to best mobilise the charity of the Diaspora, which is not inexhaustible and occurs mainly through school and church networks and, therefore, without the US, UK, or Canadian governments contributing to ease the pain of the donation.
I am aware of less than 10 Jamaican charities with the critical 501c status allowing a US tax write off, and only one with all three of the key diaspora countries in Jamaica (please contact me if you know another).
Finally, as the Private Sector Organisation of Jamaica (PSOJ) celebrates my former boss Don Wehby’s life on Monday, it is noteworthy that he always believed in Jamaica first. There would be no better way to honour him and indeed meet our wider obligation to all the Jamaicans painfully recovering from Melissa than to achieve a true trust-based social partnership as part of a genuine programme of national recovery involving all our key societal actors, including both Government and Opposition, while still bearing in mind the latter’s unique role, as the Irish leader of the Opposition advised those of us who went on the Digicel study trip long ago.
Keith Collister