PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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It is clear to us at the PIOJ that crime reduction, the renewal of vulnerable communities across the island, and fiscal consolidation, form the essential platform for economic revitalization and broad-based growth and development. They are essential modern public goods, not modern public sector goods. This distinction is important because public goods and public bads are inescapable, are collectively consumed, and require collective production for their efficient contribution to national development. This is where the private sector needs to step up a bit. Too often the discussions about economic reform are dominated by the illogical ideology of good private sector and bad government. There is no robust empirical validation of this position internationally anywhere. In fact, in my own study of privatization and economic efficiency, which has since been selected as among the top 50 works worldwide over time in public policy on the topic, I prove that the environment within which an enterprise operates is far more important to its efficient performance than whether it is a public versus private firm. And frankly, since the classic necessary conditions for firm efficiency do not exist in Jamaica – i.e. simultaneous capital market and goods market competition - there is good reason to believe, and frankly sufficient evidence of the fact, that private firms are not necessarily systemically efficient in Jamaica. Fiscal consolidation and public sector rationalization will benefit our economy by reducing the misallocation of economic resources, lowering the cost of capital and taxprice of government, crowding in the private sector and private economy, and raising household wealth and workers permanent income. These achievements combine to create a most important public good. So too are the economy-wide and collective benefits of crime reduction, community renewal, tax reform, and broad-based development. These reflect the conciliant aspirational goals of Jamaicans and are reflected in Vision 2030 Jamaica. As a result, the pursuit and achievement of Vision 2030 Jamaica, whose national vision statement is “Jamaica, the place of choice to live, work, raise families, and do business” is a critical national public good that all of us, including the private sector, must invest in and collectively produce if Jamaica is to achieve its fullest potential. The private sector’s response to the fiscal consolidation effort has been insubstantial to date and I should use this occasion to remind you that entrepreneurship and private sector development are much like surfing: no risk-taking, no reward, and staying on the beach, while safe, never gives you worthwhile returns. While the government has its role in creating the “public good” of a sound macroeconomy and an enabling business environment, so too the private sector has a role to play in creating broad-based growth and development by: engaging in activities that build productivity and innovation in industries, instead of behaviour that seeks to secure preferential treatment for one group at the expense of others 43
partnering with government to discover, develop and take advantage of new sources of competitive advantage in domestic, regional and global markets supporting, and indeed leading, efforts to ensure good governance, transparency and accountability at all levels – the company, the community and the country. I thank you for this opportunity to share my analytical and heart-felt perspectives and aspirations and faith about our possibilities as a country. I represent all my colleagues at the PIOJ whose daily actions reflect their sincere belief in our country’s bright future. My discussion today reflects the collective views of my colleagues and myself and I hope it represents part of the public good of government. We pledge to work tirelessly in partnership with you to pursue these important ends. 44
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i A GROWTH-INDUCEMENT STRATEGY FOR
Page 3 and 4: To the many ordinary Jamaicans who
Page 5 and 6: Preface The Jamaican economy has ex
Page 7 and 8: for making a determined start on th
Page 9 and 10: the private sector groups, listed b
Page 11 and 12: Citibank N.A. Jamaica Branch Grace
Page 13 and 14: need for “additional fiscal space
Page 15 and 16: Chapter 2 ________________ Summary
Page 17 and 18: 1.0 The Economic Situation Today 1.
Page 19 and 20: expected to provide an essential an
Page 21 and 22: Table 2.1. The Policy Framework: A
Page 23 and 24: programme of social inclusion that
Page 25 and 26: Strategic Focus Table 2.2. Growth S
Page 27 and 28: 6.0 Short-Term Growth Stimulus 6.1
Page 29 and 30: decline of 2.0 - 2.2 percentage poi
Page 31 and 32: Table 2A.2. NWA Projects To be Fast
Page 33 and 34: Table 2A.5. Community Renewal Proje
Page 35 and 36: Table 2B.3. Impact of Repairing Far
Page 37 and 38: Appendix 2C Methodology of the Grow
Page 39 and 40: Part I _________ Overview 28
Page 41 and 42: 2.0 Vision 2030 Jamaica Before delv
Page 43 and 44: 3.0 May 2010 Security Event and Aft
Page 45 and 46: the longer than anticipated global
Page 47 and 48: April July October January April Ju
Page 49 and 50: Three industries recorded increases
Page 51 and 52: 9.0 Proposals for Growth-Stimulus I
Page 53: targeted economic and social infras
Page 57 and 58: 3.0 Growth Inducement Strategy The
Page 59 and 60: Growth-Inducement Strategy Alignmen
Page 61 and 62: 50 Part II _________ Situational An
Page 63 and 64: inadequate provision of public infr
Page 65 and 66: 2.0 Macroeconomic Assessment 2.1 In
Page 67 and 68: Increased global oil consumption wa
Page 69 and 70: $4,742.0 million and $688.4 million
Page 71 and 72: Non -Traditional Domestic Exports E
Page 73 and 74: negative impact of the Jamaica Debt
Page 75 and 76: ethanol and paint, whereas lower de
Page 77 and 78: Analysis of preliminary GCT data re
Page 79 and 80: The number of ship calls to the isl
Page 81 and 82: industry was, however, estimated to
Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85 and 86: increased marketing and extension s
Page 87 and 88: Electricity & Water For FY 2010/11,
Page 89 and 90: J$ Million Figure 5.1. Private Sect
Page 91 and 92: 2011/12). These extreme weather eve
Page 93 and 94: Chapter 6 ________________ Assessme
Page 95 and 96: creates allocative inefficiencies,
Page 97 and 98: Million $ Per cent Jun-10 Mar-10 De
Page 99 and 100: Table 6.1. Employed Labour Force by
Page 101 and 102: J$ million Mar-10 Dec-09 Sep-09 Jun
Page 103 and 104: FIGURE 7: GROSS NATIONAL SAVINGS RA
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4.10.2. However, the extent of the
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Part III ____________ Analytical Fr
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functional relationship between the
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It follows that: (5) s = I/Y = [S -
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However, the existence of measureme
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(d) v* = Y*/K* This is a measure of
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in Chapter 8. The mutual interactio
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Transforming the complex set of str
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Appendix 7A A Methodological Note T
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Chapter 8 ____________________ Asse
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The DBI focuses more narrowly on qu
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to ask, is it possible to predict g
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can be made to serve a very useful
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For further elaboration of the cons
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progressive Jamaica-based firms and
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Table 8.2. Jamaica: Doing Business,
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Table 8.4. Global Competitiveness I
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Table 8.5 (continued) Rank Indicato
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Rank* Constraint Table 8.7 Business
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Chapter 9 ___________________ Inter
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3.0 The Burdens of LAC’s Logistic
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conditions. These combined with a p
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Figure 9.4. Proportion of Primary A
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6.0 Logistics are Essential for Tou
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7.0 Fundamental Steps Forward for J
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Part IV ________________ Policies a
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Current Status: Cabinet by decision
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e more than compensated for by the
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B ____________________ Eliminating
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Commercial Bank loan rates have als
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5.0 Expected Outcomes These measure
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capital, mainly in the form of equi
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oth local and overseas (including t
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Table C.1. Proposed Implementation
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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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