EDITORS' FORUM - Promoting sustainable growth

Gleaner Report
published: Monday November 27, 2006

Opposition Spokesman for Finance and the Public Service, Audley Shaw


Last Wednesday, The Gleaner hosted Audley Shaw, Opposition spokesman on Finance and the Public Service, at a Gleaner Editors' Forum. Mr. Shaw was questioned on a range of issues relevant to his shadow portfolio. Today, we present excerpts from the forum.

I have come to the conclusion that there are some structural weaknesses in the economy that militate against the growth, significant growth, and I just want to briefly summarise them.

The four areas that I've identified that are of immediate need of attention would be, number one, the debt burden of the country. It has to be dealt with in a very specific and unambiguous fashion.

Secondly, we need a sensible energy policy. An energy policy that takes into account the fact that we are heavily oil dependent at present and that the cost of energy production in Jamaica is way above the international average ... the cost of producing electricity ... we have to look at that. Because, unless you can deal over time with reducing the cost of energy in Jamaica, then you are not going to be able to have any significant impact on really taming inflation in a significant way or, even more importantly, you are not going to be able to allow for industrialisation on any significant basis; manufacturing, commercial, and you can't have an industrial policy that is based on high energy cost, and the attendant inflation, and the fact that it makes business uncompetitive, it makes manufacturing uncompetitive.

The third pillar, in my view, is the pillar of the bureaucracy. Now, the bureaucracy, when I refer to the bureaucracy I am talking about the public sector bureaucracy. I am talking about the ability of the bureaucracy to deliver efficient services to everyone in the country; to business people, to investors, to people who want to apply for permission to put up a sub-division, to put up some kind of development, the kind of red tape that they have to be going through. Things that ought to be taking weeks or months approvals are taking years in Jamaica.

Debt burden
And the fourth pillar is the need for taxation reform and the need for aggressive investment promotion. I put them together on the basis that taxation reform is not just about how you collect more from the people or how you collect more efficiently, but taxation reform is also about how you can use taxation as an instrument of encouraging savings and investment, fiscal incentives, and that's part of your tax regime. So I put it along with what's the quality of the investment promotion drive.

Many businesses have fallen, and you will remember that over 40 companies in the financial sector were closed down in the 1990s as a result of the financial sector collapse. But the debt burden, and that's where we should start, because we have to understand that the debt burden has come about in part because of the high interest rates that have really been a central feature of the Jamaican economy.

We want to re-engage with the multilateral institutions which have money at relatively lower interest rates, at least half of what pertains now on the domestic and international capital markets. The multilaterals can lend you money now at four to five per cent. And they are in the mode to provide what are called policy-based loans. They are ready. Mr. Golding and I met with the IDB (International Develop-ment Bank) people two weeks ago. We met with the World Bank people a few months ago, and I have had discussion with Caribbean Development Bank (CDB) people.

But let me just say on multilaterals, you've got to go to them in a disciplined, organised, well thought out, well planned way. And I believe that what we've got to demonstrate to the multilateral is that listen, world economy has been growing by at least four or five per cent while we have been growing at less than one per cent. How can we get Jamaica to grow by six to 10 percent? And they will sit down with them and say there are certain things we know we have to do.

Incremental each year
We have got to deal with our macro-economic climate, we have got to deal with our debt burden, but in the meantime we can say to an IDB or a consortium of IDB, World Bank and CDB, we have some problems, one of them (is) we need $20 billion incremental each year to get our transformation for education going. And listen, if we can't get all the $20 billion one time to start to go right through the system, basic, primary, secondary, let us say 'All right, let's start with basic, the little ones, let's start rescuing them there, and let's put in a remedial programme in primary and secondary'. They can at least begin to see if we can rescue those in there to teach them how to read and write, but give the full impact of the resources at the beginning. We discussed it with the multilaterals and they say that education is an area in which ... policy-based loans ... they are willing to look at it, they are ready to look at it because they don't want to see any child left behind anywhere in the world, and that would be money well spent.

But it's going to require a lot of discipline for us to sit with them and to work with them, and it's not conditionalities they will have, you know, but it's that with them you have to dot your I's and cross your T's. Omar (Finance Minister, Dr. Omar Davies) doesn't like that anymore. When Omar became Finance Minister, the debt portfolio, 70 per cent was to multilaterals and bilaterals and 30 per cent was to private sector, local and overseas. Today it is the exact opposite. Today it is 70 per cent to private sector, local and overseas and 30 (per cent) multilateral and bilateral. At whose cost? At whose expense? The people of Jamaica, because the average cost of that money at that time was maybe, three to five per cent. What's the average cost of the money now? Ten to 15 per cent.

Information Technology
IT is a winner! What we have to do, we have to make sure first of all that we have a pool of adequately trained people and thereafter we have to retrofit JAMPRO to go and do the necessary marketing, the targeting of the investors and bringing them to Jamaica, and when they bring them to Jamaica they need go no further than over at Mr. (Patrick) Casserly's place (e-Services Ltd.) to show the potential - and there is nothing that is as helpful in promoting investment as when you are able to take the investors and show them an existing facility which is exactly something that they want to replicate - and they see it live and direct and see it function.

But JAMPRO, the promotional arm, the investment promotional arm of the country, in my view, has to be completely revived, completely reorganised, and we have to take a very critical look at the areas of investment promotion possibilities, which information technology has to be. Apart from tourism right now, apart from tourism, informa-tion technology has to be on the top of the list.

Sugar
There are models all over the world of sugar production that have demonstrated that sugar can be efficient. Ironically, right here in Jamaica the McConnells at Worthy Park and down at Appleton Estates have demonstrated to us that sugar can ... they are producing sugar at something like 10 or 12 cents per pound cheaper than what the Government-owned sugar factories are producing at right now, and it is a function of inefficiency. Right now it is a function of inefficiency. The Minister of Finance has not been ensuring that the sugar company gets the cash flow on time, because planting and replanting of sugar cane is not something that, if you need it in January you can't provide it in March, because there are consequences.

We support divestment, but it can't be divestment sort of without knowing a proper business plan, what is it that is proposed, because remember we had divested before and the Government divested in the 1990s to the Cameron Group and what happened then, in my view, was that they appeared not to have an adequate business plan, and it appeared to be undercapitalised, and then you have the other, you know, consequent sort of domino effect.

Now, when you divest something, it has to have very clear rules, what's the capital coming in, what is the plan? How does the plan relate to how other countries have made it successful, for instance? The world is moving away from just a sugar cane industry. They are moving to a sugar cane-based industry with all its by-products. So you have co-generation, you have sugar itself, you have rum. We ought to be making 10 times the amount of rum that we make today.

I have met some of the investors who want to hit the ground running, including some from India. They have come out here and they have asked to meet with the Opposition and we've met with them. Who is ensuring that this is being done and that is being done and the timetable for this is being adhered to, because it is a matter of urgency?

At least one investor has expressed frustration to me. They have a feeling that somehow there are all kinds of permutations, there are all kinds of special interests, there are all kinds of, sort of, internal politics issues. And that particular investor didn't get a feeling that he was getting a straight answer, and this requires direction.

Air Jamaica
Air Jamaica requires very, very careful study, very careful analysis. We have agreed as a responsible Opposition to become a part of these discussions and a meeting has been called, a Parliamentary Committee meeting has now been called. I was invited to it yesterday (last Tuesday), for next week Thursday, the 30th at Gordon House. That is chaired, I believe, by
Dr. Davis, and myself, Mike Henry and I think Clive Mullings are the Opposition members on that team. I don't want to make any pronouncements on Air Jamaica, worst of all it's not a portfolio matter for me as of now, although it's tangential in terms of the finance portfolio. What I can say is that the Government really, and the Minister of Finance, it's not good enough for them to come and say all I am giving to you is US$30 million per year subsidy, and at the same time presiding over a situation in which they are losing at least US$100 million more. So that if they give them a subsidy of US$30 million they have lost US$130 million, but they give them a subsidy of US$30 million, where is the other US$100 million, how is that going to be factored in, who is going to pay for it? All we are saying is that the minister comes arbitrarily and says 'This is all I can give you in subsidy', but then a few years down the line he will come back to Parliament and say 'Well you know we need to restructure Air Jamaica and here is the outstanding debt accumulated over the past 10 years and, therefore, we are now going to have to find the money to pay it.'

I think that in principle it's always good to have a national airline, especially in circumstances where our tourism industry is really the flagship for Jamaica right now as a bright light in terms of, you know, what we can look to, and certainly there is so much more that can be done for tourism to expand it that much more, because we haven't even started to look at South Coast tourism in a serious way yet. We have the North Coast that is building its own capacities. But, equally, the preservation of Air Jamaica cannot be at all costs, it can't be at all costs, something has to give. Other airlines have proved that they can be efficient and they have come up with the formula to be efficient, whether it is a rationalisation ...

(Closing Air Jamaica) would be a last resort. I wouldn't be looking at that now. I think there is a thing called efficiency and we've got to look at that.

LAST CHANCE!!!

By Delano Seiveright

PARTY CONFERENCE
The public session of the 63rd annual conference of the Jamaica Labour Party on November 19th 2006 has been heralded as the biggest party conference in Jamaica’s history. The turnout was frankly astronomical and I am sure for many others present, astounding. Never have I in my 22 years of life been in a crowd of that magnitude. The JLP conference was clearly a tremendous success not only in terms of turnout but also in organization, content, passion and delivery.

GOOD GOVERNANCE
The highlight of the conference was the address by the Leader of the JLP, Dr. Bruce Golding. Dr. Golding laid out aspects of a broader plan to transform governance in Jamaica. I had stated in earlier articles that the primary problem facing our country is bad governance. Believe it or not rampant crime, a stagnant economy, a substandard education system and bad roads are all attributable to bad governance. If we had benefited from consistent and effective good governance we would not have been in the rut that we are now today. After approximately 18 consistent years of bad governance the result has been a stagnant economy, intolerably high levels of crime and violence, a substandard education system, poor health care and a litany of other economic and social problems.

HAM-FISTED LEADERSHIP
It is therefore important that well thinking Jamaicans go out to ensure that Jamaica is taken off the road of doom and gloom. It is patently clear that Prime Minister Portia Simpson-Miller is not only ham-fisted but also clearly unable to lead her own party. Her handling of state affairs has so far indicated to all and sundry that she is unfit for the office of Prime Minister. How else can one explain the Cement crisis, the Portmore toll road fiasco, the Sandals Whitehouse scandal, the Trafigura affair, the dramatic increase in political tension, cantankerous speeches, a government in shambles and several other failures and blunders on her part. To top it all off she makes frequent jaunts overseas, is frequently tardy or absent from Parliament and is afraid to face journalists. Already one prominent pro-PNP UWI academic had put forward the undoubtedly embarrassing proposal that Mrs. Simpson-Miller appoint a Deputy Prime Minister to handle the day-to-day operations of government.

A FIFTH TERM?
No well thinking Jamaican can honestly argue that Mrs. Simpson-Miller and her fractious jamboree of party faithful deserves a fifth consecutive term in government. Not only is it an illogical and heartless notion but an inept one at that. Dr. Golding and his united team offer the best chance for Jamaica at this time. Not only is the team more youthful but also far more erudite, far more proficient and far more imaginative. Just watch the nightly newscasts. The burst of energy that the upcoming JLP victory at the polls will give to Jamaica will most certainly propel Jamaica into a new age of development and transformation.

GOLDING’S PLAN
Dr. Golding in his speech laid out segments of the JLP’s plan to bring about authentic change. This plan might not include many hugs and kisses but entails a transformational plan for governance, as we know it.

Firstly, the plan consists of a new constitutional and political framework in which:

the people’s rights are entrenched and enshrined and the mechanisms are provided to enforce and protect those rights;

the powers of government are clearly defined and government is held firmly accountable;
to ensure greater stability in the political process by establishing a fixed election date and encourage greater renewal by imposing term limits for the office of Prime Minister;

there is greater separation of powers between the government and the Parliament by strengthening the role and expanding the powers of the Opposition in Parliament so that in certain critical areas, government cannot act unilaterally but can only do so with the agreement of the Opposition. The fact is that under the present Constitution the Cabinet decides what it wants and, where necessary, it goes to Gordon House where those on the government side dutifully rubber-stamp those decisions. If we are serious about building a new Jamaica this cannot be allowed to continue.

RIGHT THING TO DO
One must emphasize the fact that the JLP, which will form government, very soon has committed themselves to arrangements, which will limit the power of itself in government and strengthen the power of the Opposition. This commitment is being made because it is the right thing to do; it is essential to the new framework of governance for a new Jamaica, for a better life.

FORMIDABLE PLANS
Dr. Golding went on to list a raft of formidable plans to tackle some of Jamaica’s challenging problems. These include plans to address:

A failing justice system;
Corruption;
The effectiveness of political representatives;
Local government reform;
Education reform;
Agriculture;
Rural development;
Inner city development;
Crime;
Economy;
Government bureaucracy;
Labour market reform and productivity improvement;
Tourism development;
Social security;
National Housing Trust reform

CRITICAL JUNCTURE
These are just some the areas in which the JLP plans to reform governance. The entire vision is to be presented in the party’s new manifesto to be completed soon. Jamaica has again arrived at a critical juncture in its political history. It will most likely take the collective effort of well thinking Jamaicans like you to make a positive difference.

THE GOSPEL, THE REFORMATION

By Trevor Wanliss

A Government when elected, is expected to govern the nation collectively with wisdom. They study the prevailing economic and social condition, then activate policies.
The inhabitants become filled with their desire to succeed, as they set their goal on their desired object. Wise men charted a way to guide the people. At the beginning of such an era, harmonic existence became prevalent. Population grows, then space seems to become compact, as the world seems to get smaller, but coexistence continue on the freeway.
Then suddenly the world around us became a very untidy place, as quickly emerged a body of cunning, dangerous wicked and deceitful people with their immoral agendas. They have now proven such as buffoons, with their selfish and vicious actions. They plunder the coffers, they devastate as they dole out crumbs to the more unfortunate inhabitants, presenting them with the venom of manipulation.

For more than a decade and a half now they have been sending these subjects, scavenging for their very lives. One could never imagine the deplorable circumstances that many of these people encountered to survive. These rascals, after three terms of plundering, then at the beginning of the fourth term, their subjects became wise.
It is the hope that wisdom will prevail as they send these marauding reprobates into oblivion. They look down on the voters as perceived idiots.It is only in the jungles of Central Africa that I have seen such exploitation.
The main perpetrator, the HYENA, ---- and the hyena a vicious and UGLY creature, and one wonder if such an ugly being was created, and sent by God, or is it Medusa, one of the three Gorgon hideous sister, that was sent by God.
The Hyena is lending “lethal advice,” to the hideous Medusa. Medusa with the long false hair, is a product of the underworld, parading with sardonic gestures, hugging and kissing, making a mockery of especially poor people.
Beware ye folks you may be turned into stone from hugging and kisses.We can now see the Sunbeam gleaming through the dark passage, as one of the sons of God has arrived.Social, Economic Development, and prosperity is the trident in his arms, to return the country to it’s former glory.
Economic and Social Development is not just a promise, that is what he will administer, as the shining light of God our father surrounds him.

[Get in touch with Trevor Wanliss, the Envoy/Coordinator for the JLP in North America, P.O. Box 2092 Stone Mtn. Ga. 30086 and become a direct Overseas member]