|The Courier N° 138 - March - April 1993 Dossier: Africa's New Democracies - Country Reports : Jamaica - Zambia (EC Courier, 1993, 96 p.)|
The ideological battle is over but policy differences remain
During the 1970s and early 1980s, the Jamaican people were presented with a clear choice in elections. The People's National Party offered an interventionist and broadly socialist programme while the Jamaica Labour Party supported more liberal economic policies. Now that the PNP has embraced the principles of the free market, this ideological split has largely disappeared. The current ascendancy of economic liberalism ought to be a source of some satisfaction to the party in Jamaica which has traditionally espoused it but it also presents them with a dilemma: how to project a distinctive agenda which is attractive to the crucial floating voters.
Bruce Golding who is Chairman of the JLP insists that, despite the new economic consensus, there are still important differences between his own party's approach and that of the governing PNP. In this interview with The Courier, he explains these differences and talks about the JLP's electoral prospects.
· Mr Golding, how does your party's approach to solving Jamaica's economic prob1ems differ from that of the Government ?
- The ideological differences have now disappeared to the extent that the governing party has abandoned its socialist commitments of the 1970s. There are, however, some very sharp policy differences over the role of government in the economy. The present government has adopted a 'hands-off' approach. They seem to be convinced that, on the economic front, the best thing to do is nothing. They want to leave it to the private sector, confining themselves to monetary and fiscal management and the provision of basic social services. They say that this is an effort to create an investment-friendly environment. We differ on this fundamental point because we take the view that a country in our position - where there is a lack of investment, no real growth in traceable goods and services, high unemployment and a significant balance of payments deficit-cannot leave the solution solely to the organic workings of the private sector.
Now I am not for one moment suggesting that government should become dominant or that it should start taking economic initiatives in a unilateral way. I believe that if we are to succeed, there has to be a close synergy between government and private enterprise with policies and strategies being worked out together. There is no point trying to drag the private sector, kicking and screaming, into doing things they don't believe in. But we also see the need for an overall investment policy framework that seeks to identify the principal instruments of growth and development and the areas where this will take place. Government has a clear role here in pulling the whole thing together and providing the necessary incentives.
I would not necessarily rule out the possibility that there may be a need for government equity participation, because very often. when it comes to new investment initiatives, the private sector is somewhat timid. Perhaps they need to have their hands held for a little while. We have to recognise that in the past, and particularly during the 1970s, there was a massive migration of capital and skills- management and investment skills in particular. As a result, we have lost much of the investment ethic. The private sector is not as bold or courageous as it used to be in embarking on risk investment. They prefer to play the stock market where money is simply moving around within a particular pool, or to deposit their money at the central bank where they can get a substantial and secure rate of return. But that does not create a single job; it does not put one root of cane in the ground; it does not put one piece of new machinery into a factory so that we can produce and export more.
The government seems to be hoping that, having liberalised exchange controls and taken various other measures to open up the economy, it will all now happen generically. We disagree with this analyses.
Look at the experience of other countries. We can't really compare ourselves with the industrialised nations, but I think we can look for comparisons in Asia and the Pacific. Twenty-two years ago, Singapore was just behind us in terms of growth and development. Today, they are way ahead of us. They succeeded because they had a very proactive government and we support the same approach here in Jamaica.
· You mentioned last year's currency liberalisation which obviously caused a major upheaval. It is widely believed that the 'Butch Stewart initiative', which was taken up by other entrepreneurs and actively supported by ordinary Jamaicans, stabilised the currency. Is this belief correct, in your view?
I think that most of the analyses I have heard have missed the fundamental point. I should stress that we are not opposed to liberalisation. It was in the medium-term economic programme which we produced in 1988 when we were in government. We planned a gradual move towards currency liberalisation to be completed by fiscal year 1993/94. But we also warned that if it happened too abruptly, we would pay the price in terms of movement in the exchange rate and that's exactly what happened. By the end of fiscal year 1991/92 which ended last March. inflation had reached 105%. This had an impact on the poor and middle classes alike. It affected the cost of our debt servicing and the government's ability to provide basic services. That level of inflation also discourages investment and I think that we will be reaping the consequences of that for a long time. We were not opposed to liberalisation as an objective, but we would have been far more gradual in our approach to it.
Now in terms of what actually happened, the Butch Stewart initiative clearly had an impact. I don't think one could argue otherwise. It put pressure on other major foreign exchange earners to take similar action and the people rallied round. But I think it is true to say that that effort, commendable as it was, would not have succeeded if it had not been supported by very tight monetary policies designed essentially to mop up liquidity. And policy in that area has not been as consistent as it should have been. In June 1991, for example, the Prime Minister, who was then Minister of Finance, was announcing with great accomplishment, the reduction of interest rates at a time when they should not have been reduced. That was one of the reasons why the measures in the early part of last year had to be so severe but there is no doubt that they helped to contain demand and therefore to ease pressure on the currency.
I am not sure that we are home yet, however. While we have had a rate of J$22.20 to one US dollar for quite a while now and people are inclined to think that this is a stable rate, there do seem to be some problems in obtaining foreign exchange. I myself needed US$2000 to send my daughter back to school last week and I had considerable difficulty in getting it. Now I do believe that my position does give me a little premium in dealing with bank managers. If I could have had that level of difficulty, where I had to shop around and it took me a couple of days, I can imagine that somebody who needs $100 000 to bring in raw materials probably has problems as well.
· One of the most serious issues facing the country is the crime and security problem. How has this arisen and what would you do to tackle it?
-This is not a new problem but it has become particularly accentuated in recent times. Crime is a factor, principally of two things. The first is social conditions-poverty and all that goes with it as well as a breakdown in traditional community and family structures. These are things which have to be tackled with long-term policies.
But you can't afford simply to wait for the long term treatment to work. It is also an immediate problem which threatens much of what is vital to us. This involves looking at the other factor which is the serious deterioration in our law enforcement capabilities. The police force is run down-not just as regards equipment and resources but also in terms of qualification, spirit and morale. It needs major reform. We have made some proposals, which I don't think have attracted widespread popular support, to amalgamate the police and the army. We really don't feel that a country of our size living in the world that we now live in, really needs an army. They are there, in effect, to come in and clean up where the police have failed and while that has been helpful, we don't believe it is the most effective way of dealing with crime and violence.
A criminal will always look at the odds. If the chances of his being caught are only two in ten, he will probably decide it is worth the risk. And the more he gets away with it, the more he is likely to do it again, so that it becomes a pattern. This is essentially what has happened here.
I feel that we need to get the police back into the community. They are too busy in these great installations that they call police stations. The police officer should be the person whom the community looks to for protection, not someone to be feared.
There have been various reports on this problem and I am optimistic that we will see progress in the coming year. A special task force, which was set up in agreement between the government and the opposition, has been working on the issue. It is too early to say, however, whether their recommendations will go far enough.
· What is the JLP's position on the issue of Caribbean integration?
-We think that the efforts in this area have been misdirected. There is an undue emphasis on political integration which we feel is neither necessary nor workable. Too much of the effort is being driven by some sort of emotional, sentimental idea of commonality, history and culture rather than by the solid economic benefits that can be gained. Because of this, I think we keep missing the goal. Instead of the present crusade for deeper integration within Caricom, we think it should be widened.
Let us consider Caricom. At the moment, it has a population of five and a half million which is a joke in terms of the world economy. That is the size of a European city. We feel that we ought to be looking beyond the English-speaking Caribbean to relationships in the first instance with other countries in the Basin such as Venezuela, Suriname and the French and Dutch Islands. We would then be looking at a population of some 30 million and an economic unit that would make more sense in terms of viability, market strength, skills, investment and so on. And we wouldn't necessarily want to stop there. In the longer term, we should also be looking at closer links with all the Andean countries.
I also believe that we must seek to secure some accomodation within NAFTA. Currently the talk is about preferential arrangements and that may be necessary because of our small size. But the larger you are, the less dependent you become on these types of concessionary arrangement and, even if we have to seek concessions, they should be for a limited duration. Part of the problem of developing countries such as Jamaica is that we never allow ourselves to be weaned from the nipple bottle. We must accept that eventually, we shall have to stand on our own two feet.
· What about the current political situation ? There is a lot of election speculation, now that the PNP has taken the lead in the polls. How confident are you of being able to claw that back?
-We have a very difficult task to win the election. I think that much of what is carrying the PNP along is clever and sophisticated management of public perception. A lot has been said about the Prime Minister's style and about the supposed social tranquility and economic stability. The raw experience of the majority of the population is very different, but they are caught up in a kind of lull having been through a long period when prices were going up almost every week. So there is a general feeling of relief.
The Labour Party of course has its own internal problems that have not entirely been resolved and that has also affected us because it tends to diminish our attractiveness as an alternative government. We are not ready and we do have that problem. But politics in Jamaica are very dynamic and it is difficult to say what the situation will be like in two months from now.
We are mounting a campaign which seeks to point out that the country is just marking time-that it is going nowhere fast-and that a lot of this is due to the fact that the government has abandoned its role and the country is basically being run on autopilot. Deliberate decisions and initiatives are needed and we intend to outline the policies that we want to see implemented. Whether we have enough time to get the message across is another matter.
· One final question. Mr Seaga obviously isn't going to be around for ever. Are you likely to put you name forward for the JLP leadership?
-You know that we are avid cricketers here. Well, in cricketing terms, I don't lift my bat until the bowler has released the ball.