PSOJ—Economic Policy Committee
Monthly Members Forum for Jul-07 
On Tuesday, 31 July, 2007 The PSOJ Economic Policy Committee (EPC) held their first Monthly Members Forum at the Terra Nova Hotel. The event was an attempt to bring to members of the private sector, the PSOJ vision for Jamaica from an economic standpoint.
Mr. Richard Chen, the Chairman of the Economic Policy Committee welcomed those in attendance and set the framework for the morning’s event. He indicated that the PSOJ was committed to promoting and actively lobbying the government for a ‘Business Friendly and Prosperous Jamaica’. In this, he highlighted the need for increased efficiency within government practices and the need for injecting a private sector / corporate governance approach to public sector activities. Mr. Chen emphasized the need for dialoguing with both its members and the wider public. This, he noted would assist all parties including the PSOJ to better understand the needs and proper policy strategies needed to build a better Jamaica.
Dr. John Rapley in his capacity as the President of the Caribbean Policy Research Institute ( CaPRI) formally, Jamaica Economy Project ( JEP) gave a brief address to the private sector representatives at the forum. He first and foremost pointed out the ongoing need for research based policy initiatives. CaPRI he indicated was in the position to provide such expertise by drawing on its resources from both local, regional and the wider international community in providing detailed and reputable research for critical issues that will confront Jamaica over time. He displayed his enthusiasm about the joint PSOJ – CaPRI relationship while pin-pointing the opportunity for each party to specialize their respective roles in an effort to stimulate discussions, inform and motivate policies in the best interest of Jamaica.
Mr. Keith Collister gave an overview of his experience both as a researcher for CaPRI and an active member on the PSOJ Economic Policy Committee (EPC) and lobbyist for the Private Sector. As an insider agent, he witnessed the strong policy push by the PSOJ to arrange for a Partnership For Progress (PFP) between the Government of Jamaica (GOJ) and the Private Sector. He highlighted the challenges and changing circumstances leading up to the major election time and the likely post-election conditions. Given the support in initiatives reflected in the oppositions’ manifesto, he is hopeful that the extra support would be provided to move the government to action irrespective of which party wins the new term in office.
Dr. Damien King, lecturer in the Department of Economics at the University of the West Indies (UWI), Mona in his capacity as a researcher for CaPRI was given the task of delivering the main presentation. The topic, entitled, “The Imperative of Economic Growth” was intended to put into context the work done by JEP (more recently CaPRI) on growth in Jamaica and to offer the resulting recommendations.
Dr. King started off by suggesting that economic growth is the way forward, but left no stones unturned by highlighting the importance of economic development in tandem with economic growth. A short investigation on the importance of economic development featured the high correlation between rich countries and those that ranked high on development indicators. He also made the point that countries that grow faster and become more wealthy had a greater capacity and resource base to provide for the developmental needs of the nation. This made his point that development was essential and economic growth was indeed a vital requirement.
He drew reference to Jamaica as One (1) among the top three (3) most indebted nations with a Debt to GDP ratio of approximately 130%. Economic growth will be needed for a correction of this overbearing debt burden. Dr. King, purported that if the country does not pay back a single dollar towards the existing debt balance, but was able to maintain an annual economic growth of around 8%, then the Debt to GDP ratio would half within 9 years and continue at that rate until it was completely negligible.
Economic growth is essential not only for debt reduction but also wealth accumulation and standards of living. At the current growth trend, Dr. King showed that it would take approximately 70 years to double Jamaica’s standard of living. If, however, an 8% growth rate would be maintained, Jamaicans could double their standard of living within 10 years.
The main question that is needed to be asked, he said, was whether or not this growth rate was achievable for Jamaica. The evidence he said, was to be gleaned from the experience of other countries. He indicated that examples were not short in supply. Countries like, Uganda, Ireland, South Korea, Singapore, Chile, Costa Rica, Botswana among others are all examples of countries that have made significant turn around for increased economic prosperity. A similar turnaround, he noted was possible for Jamaica.
Findings from CaPRI’s research reveal that:
- Jamaica has not done badly in terms of social development when given its income classification. Countries with similar income levels are likely to be in much worse conditions.
- While other countries might have done poorly over time, not many have sustained such a prolonged dismal performance as is seen in the case of Jamaica.
- Contrary to the belief that the Jamaica economy was slated for growth in the 1960’s for which there were impressive growth rates, CaPRI’s research showed that the outcome was due largely to an increased performance in both the emerging bauxite and tourism sectors that was positively impacted by the post-war economic boom in the United States. The point made was that this growth was not internally generated.
- The poor performance was suggested to be reflective of weak leadership that tended to follow social forces rather than adhering to sound economic policies.
- Over time, public sector reforms have created a more enabling framework for growth.
- The possibility still exists for Jamaica to experience strong economic growth.
Dr. King then discussed the recommendations to achieving economic growth. This is summarized in the points below:
- Prioritising economic growth
- Jamaica must engage the world economy
- Facilitate the dynamism of the economy
- Educate for technical capacity
- Balance the budget
