PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

With the benefit of hindsight, some now say that these developments were inevitable.
For our part, we know that they involved difficult choices and decisive action and wish to
congratulate policymakers once again for these important successes. At the same time,
we are yet to begin work on the pillars that will ultimately lead to growth and an
improvement in the standard of living of all Jamaicans.
Our tax system remains inefficient and inequitable. The regulatory and legal systems in
which businesses operate still tie one hand behind the back of our entrepreneurs as we
compete with the world. And finally, there has been no noticeable improvement in our
investment, industrial and energy policies to speak of.
A review of the framework makes it clear that while we have undertaken the critical and
difficult work of restoring stability in the macroeconomy – we are yet to begin building
our growth pillars. The house is unfinished. Perhaps we’re finding it hard to get the
permits. A review of our growth rates also makes it clear that stability was indeed
“necessary but insufficient.” The official GDP figures and my day-to-day responsibilities
in the manufacturing, distribution and services businesses in which I operate - confirm
that while growth rates are picking up, the recovery remains very fragile.
Today, the PSOJ believes that we are essentially in a race against time. We believe that
the major economic question facing Jamaica now is which of two outcomes will happen
first. Will we succeed in erecting the growth pillars, or for that matter, implementing the
Growth- Inducement Strategy and reap the rewards that macroeconomic stability
provides? Or, will the public become so disenchanted with the sacrifices that have been
made and so sceptical that the economists know what they are talking about, that a new
consensus will emerge and unwind the difficult progress that’s been made?
Such a tear in our social fabric would not be the result of the ignorance or naiveté of the
public – but would represent a completely legitimate sentiment that we the business
people and policymakers have failed. It is, therefore, incumbent upon all of us to
collectively ensure that we complete the work before it’s too late and before this
opportunity, like so many others before it, vanishes into the dustbin of history.
3.0 Reaction to Growth- Inducement Strategy
In this context, the PSOJ welcomes the PIOJ’s Growth-Inducement Strategy. The
document shares most of the elements in our own framework, and not surprisingly, the
PSOJ has no major disagreement with the strategy as proposed. Nonetheless, this
morning, we would like to share the following observations and reactions.
Firstly, the fiscal situation continues to have serious risks and still deserves our laser-like
focus. While the Growth-Inducement Strategy is centred on areas of growth, we believe
that policymakers still need to implement key fiscal reforms such as: fiscal responsibility
legislation and central treasury management. Of great concern to the PSOJ is the size of
unfunded pension obligations in the public sector, which by some estimates is as large as
25% of the public debt. The annual costs of just the pension expenses of current retirees
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