PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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Putting these matters aside, and with a sleight of hand, this construction can then be adapted to talk about another imaginary world in which, for some unexplained reason, the fixed resources are assumed to be unemployed (the imagined economy is supposed to be operating “inside the frontier” at C). It can then be posited that there now exists a new problem of getting the economy to full employment of its existing and fixed resources – a problem that, it should be noted, is conjoined with (not separate from) the previous problem of choice of resource allocation. No explanation is provided of why the resources remain unemployed or by what mechanism the economy is supposed to be transported from a condition of unemployment to full employment of those resources. Here again, as before, the construction is notable more for what it leaves out and fails to explain (hence its lack of any real content either of analysis or prescription ) than for any practical guide that it provides to understanding any actual situation or to developing economic policy to deal with actual conditions. 111
Chapter 8 ____________________ Assessment of the Constraints to Economic Growth in Jamaica Donald J. Harris Professor Emeritus of Economics, Stanford University 1.0 Focus of this Assessment The issue of growth constraints in Jamaica is a long-standing subject of analysis and public discussion. It has crucial relevance both in the context of a well-known history of slow growth since the 1970s and in the immediate context of an economy undergoing a deep recession. Many reports have been written, old and new, and the list of constraints emerging from these reports is long, which begs the question of where to start in dealing with them on a practical level. There are important questions of cause and effect that have not been adequately addressed in the existing analyses. Actual policy responses have been mostly lacking in comprehensiveness and continuity, and implementation of policy has been a recurring problem. However, there are also significant achievements that need to be properly documented and studied for the lessons they offer for the conduct of effective policy. The assessment presented here has a more limited focus and practical goal. It seeks to draw on available published reports to identify and rank prevailing constraints that are commonly recognized and, on this basis, to construct a practical menu of targeted areas for needed action in a medium-term policy framework. 40 As a small open economy, the capacity of Jamaica-based firms to penetrate and compete in export markets, as well as against imports in the local market, is the key to economic survival and growth. It is therefore necessary to focus sharply on those constraints, and their specific underlying features, that limit Jamaica’s competitive standing in relation to the rest of the world economy. There exists a number of readily available recent reports, based on survey data, that can be used for this purpose. They form the main sources for this assessment. The assessment is organized around an analytically useful distinction between supplyside and demand-side constraints. This approach has the distinct advantage that it leads to: (1) a clear understanding of the need and scope for a differentiated mix of strategic interventions consisting of the following key elements: 40 Based on data available at time of writing, October 23, 2010. 112
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i A GROWTH-INDUCEMENT STRATEGY FOR
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To the many ordinary Jamaicans who
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Preface The Jamaican economy has ex
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for making a determined start on th
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the private sector groups, listed b
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Citibank N.A. Jamaica Branch Grace
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need for “additional fiscal space
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Chapter 2 ________________ Summary
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1.0 The Economic Situation Today 1.
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expected to provide an essential an
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Table 2.1. The Policy Framework: A
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programme of social inclusion that
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Strategic Focus Table 2.2. Growth S
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6.0 Short-Term Growth Stimulus 6.1
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decline of 2.0 - 2.2 percentage poi
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Table 2A.2. NWA Projects To be Fast
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Table 2A.5. Community Renewal Proje
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Table 2B.3. Impact of Repairing Far
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Appendix 2C Methodology of the Grow
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Part I _________ Overview 28
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2.0 Vision 2030 Jamaica Before delv
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3.0 May 2010 Security Event and Aft
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the longer than anticipated global
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April July October January April Ju
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Three industries recorded increases
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9.0 Proposals for Growth-Stimulus I
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targeted economic and social infras
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partnering with government to disco
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3.0 Growth Inducement Strategy The
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Growth-Inducement Strategy Alignmen
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50 Part II _________ Situational An
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inadequate provision of public infr
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2.0 Macroeconomic Assessment 2.1 In
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Increased global oil consumption wa
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$4,742.0 million and $688.4 million
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Page 95 and 96: creates allocative inefficiencies,
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Page 99 and 100: Table 6.1. Employed Labour Force by
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Page 103 and 104: FIGURE 7: GROSS NATIONAL SAVINGS RA
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Page 109 and 110: functional relationship between the
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Page 121: Appendix 7A A Methodological Note T
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Page 127 and 128: to ask, is it possible to predict g
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Page 131 and 132: For further elaboration of the cons
Page 133 and 134: progressive Jamaica-based firms and
Page 135 and 136: Table 8.2. Jamaica: Doing Business,
Page 137 and 138: Table 8.4. Global Competitiveness I
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Page 141 and 142: Rank* Constraint Table 8.7 Business
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Page 145 and 146: 3.0 The Burdens of LAC’s Logistic
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Page 149 and 150: Figure 9.4. Proportion of Primary A
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Page 153 and 154: 7.0 Fundamental Steps Forward for J
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Page 157 and 158: Current Status: Cabinet by decision
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Locally, the Scientific Research Co
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Develop formal and informal links t
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D ____________________ Business Pro
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5.0 Recommendations Based on the ma
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2.5 Coexistent with the levels of u
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industry as well as provide funding
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Table E.2. Unemployed Labour Force
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indirect losses experienced when th
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Table F.1 (continued) Area Type of
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G ____________________ Community Re
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Figure G.1 Community Renewal Progra
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Table G.1 Priority Initiatives Obje
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Table G.2 Phased Implementation Pla
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H ____________________ Proposed Wes
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3.0 Transparency Guarantees By desi
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and Coordinating Unit (PCMU) was es
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therefore need to have sanctioned o
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Figure I.1. Functions of National P
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The rationalisation was guided by t
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deliver services in an efficient an
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efurbishing to allow for accommodat
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Part V _______________ Panelists’
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With the benefit of hindsight, some
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ight. Where we as a society fail is
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and exclusion of the majority of th
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the elders, youth, children. What f
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C __________________ Enhancing Nati
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Figure C.1. National resilience is
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