PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

1.0 The Economic Situation Today
1.1 The Jamaican economy has been in a chronic state of near stagnation since the
1970s. During that time, there have been fits and starts, but no demonstrated capacity of
the economy to sustain forward movement. The deadweight of that history now hangs
heavily over the present. The process of awakening and recovery from this state of inertia
is a difficult one that will take time. It requires a systematic approach to designing and
implementing integrated policy solutions aimed to modernize and transform the economy
so as to meet the challenges of operating in a dynamic, competitive world where the
country has lost ground relative to others that it led or equalled some 50 years ago. It
also requires determined and forceful leadership.
1.2 The basic objective of such policy is, through proactive partnership between
government and the private sector, to build and sustain an enabling environment for
creative and enterprising actors (individuals and firms) to seize emerging opportunities
for value-creation that link local competitive advantages to rapidly changing conditions
of global competition. For this purpose, there is no magic bullet, and no quick fix. We
therefore reject, in principle, the popular notion that one or another single “big project” or
grab bag of randomly chosen projects, or addressing this or that favourite “critical
illness” viewed in isolation, or a system of tax waivers and incentives geared to
compensate for lack of international competitiveness, will magically produce meaningful
and sustainable economic growth and development.
1.3 At the macroeconomic level, a start has already been made, beginning with the
recent successful debt exchange, to lay the initial groundwork for mounting a broadbased
economic recovery, albeit based on a fragile financial stability that requires gains
on the production side for it to take hold. It is now time to build on this start. The
Growth-Inducement Strategy presented here aims to do just that.
1.4 In preparing this report, the singular objective has been to analyze the current
state of the economy and, on this basis, to develop recommendations for policy and
action to induce economic growth, starting with the upcoming budget process for the new
fiscal year 2011/12 and going forward into the medium-term 2012/2014. We were not
called upon to construct a plan for long-term development of the economy. However, a
detailed road map for such a plan is laid out in the Vision 2030, Jamaica National
Development Plan. That Plan also states, in bold relief, the aspirational goals firmly
expressed by the Jamaican people in direct consultations held throughout all sectors and
regions of the country. The specific proposals presented here aim to provide a practical
vehicle to carry forward that Plan in the short and medium term.
2.0 Constraints and Opportunities
2.1 On the basis of careful assessment of the current situation in the Jamaican
economy, this report presents a strategic framework and a structured programme of
actions designed to achieve a turnaround in the economy and build a platform and
momentum for medium-term growth. In essence, it captures the reality of the present
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