Opportune time for economic growth lessonThursday, May 23, 2019
Mr Michael Lee-Chin, whose exceptional achievements in the arena of business have made Jamaicans proud, need not be shy about facing the fact that his “5 in 4” economic growth target might not be realised.
In April 2016, Mr Lee-Chin, chairman of the Economic Growth Council (EGC), pledged that Jamaica would achieve five per cent gross domestic product (GDP) growth in four years.
“We are going to go over the obstacles, under the obstacles, through the obstacles, but we are going to get five per cent GDP growth in four years,” he said.
With one year to go, and the most optimistic growth performance being put at three per cent for this fiscal year, the five per cent target is still very much an uphill climb.
Last month, when Prime Minister Andrew Holness announced that the Jamaican economy grew year-on-year by two per cent in the fourth quarter of 2018, he moved back quietly from five per cent to four, saying only that, “We are on the runway; we are picking up momentum. We will take off and soar as this country is blessed to do.”
The point here is not to rejoice that we might not meet the target of “5 in 4”. We here are still hopeful, but realistic. In the first place, the target was very optimistic and ambitious. In the decade 2007 to 2017, Jamaica posted a mere 0.2 per cent GDP growth.
Indeed, from the 1970s growth has been negligible, bequeathing to us the term negative growth, much of which has been masked by social developments largely financed by spiralling internal and external debt.
What we are advocating is that this teachable moment be used to focus the nation on what it takes to achieve growth of five per cent in four years and even better. The kind of growth that Jamaica needs to put a serious dent in our poverty levels will demand a great deal more from all of us.
There is hardly a better time than now to mobilise the country around the need to fire up our economy based on the very positive indicators that it is headed in the right direction, after so many frustrating years and failed economic programmes.
The eight key pillars set out by the EGC are worth recounting over and over, and for as many times as necessary:
• create macroeconomic stability and reduce the debt burden;
• cut red tape and bureaucracy in order to better facilitate business;
• bolster and improve human capital;
• utilise the Diaspora effectively;
• create greater asset utilisation;
• create a safer environment and improve national security measures;
• ensure improved access to finance; and
• attract and facilitate key projects.
Mr Lee-Chin hit a correct note on Tuesday when he gave the latest EGC report which we heartily endorse. He stressed the point that Jamaicans must invest in the local economy or be left behind as the country continues on its current growth trajectory.
He noted that foreign investors are capitalising on investment opportunities, particularly in real estate. The truth is that Jamaicans have a way of sitting back, watching foreigners lap up our resources, and then complain that foreigners are taking over our patrimony.
Importantly, Mr Lee-Chin also reminded that Jamaicans must change the culture of using up all their earnings, and start saving to be able to invest. He suggested that people save 10 per cent of their earnings.
Sage advice, indeed.
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