Ja’s economic juggernaut
The outcome of our next general election — which will be our 19th since universal adult suffrage in 1944 — will largely decide what kind of future this country will realise or not in the foreseeable frame.
Our next general election will be a clear-cut choice between an unusable socialist past which centres on short-term feel good, but medium- and long-term excruciating hardships reminiscent of the 70s and 90s, or the consolidation of a new ambition for Jamaica where we focus on reducing the national debt as we simultaneously reduce long-standing inequalities by continuing to rapidly increase opportunity creation and distribution, increased personal and national production, improved social justice, and bolstering of the rule of law.
Our 19th general election will be as important as our ninth, fifteenth, and seventeenth when the country was rescued by the Jamaica Labour Party (JLP) and Edward Seaga on October 30, 1980; Bruce Golding, September 3, 2007; and Andrew Holness, February 25, 2016.
Were we to make the dreadful error and backslide, generations to come must call us cursed.
Over the precipice
Michael Manley and the People’s National Party (PNP) plunged Jamaica over a giant economic precipice during the turbulent years of 1972 to 1980. Under Manley we became an economic leper.
The objective evidence shows that, by late 1978, “The treasury had been drained. The Bank of Jamaica ran out of reserves in foreign exchange for the first time, and had to use funds set aside for paying debt… In addition, there was a growing flight of capital. Unemployment increased to a record 27 per cent, aided by the fallout of the make-work projects. The value of the total production of the economy (gross domestic product [GDP]) in 1980 was 17.5 per cent less than in 1972, after decreasing every year but one. Inflation increased by 250 per cent, peaking at 49.4 per cent in 1978.” (The Gleaner, October 23, 2016)
Manley’s economic failures were largely due to his bad decisions, but an oversupply of low-voltage thinkers who surrounded him did not help either. Several fled our shores for cooler climes soon after Manley was booted from office in 1980.
“But, Higgins, Jamaica in the 70s was a powerhouse in the Non-Aligned Movement. She led the resistance against imperialism, capitalism, and Western political domination,” some will shout. In the 1970s this dictum was meat and drink to many, and I imagine it is still an ideological bellyful to some. This is a big part of the problem.
Those whose bellies were and are already full can afford to gorge themselves on ideology. The vast majority, who could not feed themselves or could not get food to feed themselves, even if they could afford it, did not find any solace in ideological gymnastics of socialists like Manley when the churning sounds of their empty stomachs climbed to painful decibels.
“So what about the social changes that Manley ushered in, Higgins,” some will retort. I said previously, and I do not retreat one inch, that many of the social shifts which Manley presided over were absolutely necessary. I have also said that one cannot achieve sustained seismic social shifts without a sound economic anchor. Manley obliterated the sound economic base of the 1960s.
It is not an exaggeration to say that every time the PNP has formed the administration since 1962 Jamaica has paid dearly. Years have been spent rebuilding the immense damage caused by the PNP. These periods should have been devoted to consolidation of social and economic gains. Jamaica has been made poorer for these unbalanced and often catastrophic political, social and economic pendulum swings.
No country, especially a developing country like Jamaica, can continue to move two steps forward and six backwards. Our regression has been due mostly to the rank inability of some to avoid catastrophes – one of the primary functions of government, as I see it.
I discussed the ‘avoiding catastrophes’ role of Government in one of my The Agenda pieces in February.
Einstein told us decades ago that if we keep doing the same thing repeatedly and hope for different results, we are indeed mad. As I see it, the PNP has not divorced itself of its tax and spend, borrow and spend, redistribution minus creation of wealth formula which has pushed this country over the precipice several times. This is a great harbinger.
Worst of the worst
P J Patterson, to date, is our winningest prime minister, and I maintain our worst.
Patterson was prime minister for just under 14½ years. He won four straight general elections. In total, the PNP spent just over 18½ years as the sitting administration between 1989, when a rebranded Michael Manley came back to power in February 1989, and when the PNP was booted from office on September 3, 2007, by Bruce Golding and the JLP.
A little bit of history is important here, especially for my younger readers. When Manley came back to Jamaica House in February 1989, he discarded his trademark kariba suit, for the Western-style jacket and tie. “Democratic socialism is dead,” was the firm declaration of its premier local lieutenant at a meeting of the National Executive Council (NEC) of the PNP that was held at The University of the West Indies, Mona, in the early 1990s.
Manley also publicly rejected democratic socialism in Washington, DC, after he got a third bite of Jamaica’s choicest political cherry in 1989. The political scales had fallen from Manley’s eyes.
Why are the stated periods so crucial — 14½ years for Patterson and the PNP’s 18 ½ years? Well, political scholars posit that unless an Administration can govern for at least 10 years at minimum and/or longer, they can’t make transformative change. The PNP got brawta, as we say in local parlance. And Patterson got brawta. Did they use their time in office to make transformative changes? They most certainly did not.
Between 1989 and 2007, the PNP applied a wrecking ball to the Jamaican economy — 45,000 small- and medium-sized businesses folded during P J Patterson and Omar Davies’ scorched-earth economic epoch. Companies which employed hundreds of Jamaicans went under, among them Goodyear Tyre Company, West Indies Glass, Homelectrix, Workers’ Bank, Raymars Furniture, Charley’s Windsor House, Thermo Plastics, Berec Batteries, Century National Bank, Crown Eagle Insurance, Crown Eagle Insurance Commercial Bank, Island Life Insurance Company, American Life Insurance Company (ALICO), Eagle Merchant Bank, and Ecotrends. Mutual Life (a company that operated locally for over 100 years), and Time Store, a name-brand family business in this country were gobbled-up by the turbulent waves of economic mismanagement.
Our black entrepreneurial class was almost decimated in the 90s by the cruel and inhumane high interest rate policies of the Patterson Administration. His finance minister, Dr Omar Davies, I believe, may well go down in our political history as the worst, to date. In my view, he had only one distinction as finance minister — he got everything wrong as regard the management of our national purse.
Some may say that my assessment is harsh, but what is truly harsh is the absolute devastation visited upon thousands of Jamaicans by the disastrous economic policies pursued at their watch. Many Jamaicans have never recovered, and some have not lived to tell the tale.
The default position of the PNP is external forces caused the economy to crash. In the 1970s, the PNP blamed the US’s Central Intelligence Agency (CIA) and the capitalist West for the nose-diving of our economy. I get it. There is much legitimacy to that reasoning. To date, however, the PNP has not explained w
hat accounted for their utter mismanagement of our economy in the 90s.
The PNP will not come forth with any credible explanation any time soon. Why? The 90s was a period of boom in the world economy. The economies in the Caribbean grew on average three per cent to five per cent during the period. Ours floundered!
The PNP’s 18½ years in power, between 1989 and 2007, left Jamaicans poorer. These statistics reflect the destruction of the strong economic scaffolding which the PNP inherited: 1989 (7.0 per cent); 1990 (6.3 per cent); 1991 (0.5 per cent); 1992 (2.7 per cent); 1993 (2.2 per cent); 1994 (1.9 per cent); 1995 (2.5 per cent); 1996 (-0.2 per cent); 1997 (-1.6 per cent); 1998 (-1.0 per cent); 1999 (1.0 per cent); 2000 (0.9 per cent); 2001 (1.3 per cent); 2002 (1.0 per cent); 2003 (3.5 per cent); 2004 (1.4 per cent); 2005 (1.1 per cent); 2006 (3.0 per cent); and 2007 (1.4 per cent). (Note: The year 1990 enjoyed momentum from the JLP Administration of Edward Seaga.)
Don’t get it twisted
Recently, I heard the Leader of Her Majesty’s Loyal Opposition, Mark Golding, say that the PNP, spearheaded Jamaica’s economy recovery during the Portia Simpson Miller premiership. Since then others in the PNP have been spewing this erroneous claptrap. The facts do not support their blather. Of course that will not stop the PNP from repeating their gibberish, which is why right-thinking Jamaicans must not cease from repeating the facts.
Some PNP spokespersons say Dr Peter Phillips, former minister of finance and the de facto prime minister between 2011 and 2016, is the man who singled-handedly brought back the economy from economic flatlining.
Consider this scenario: A man (the PNP) sets his house (Jamaica) on fire. When the fire brigade (the International Monetary Fund [IMF]) comes he who started the fire joins in extinguishing the blaze, following the strict direction of the brigade. The fire is put out and the house is saved. The man congratulates himself. Discerning neighbours stare in disbelief.
It was the PNP that caused the Jamaican economy to crash.
Albeit that Dr Phillips acted with the imprimatur of the IMF, I believe he still deserves credit for meticulously following their directives. He could have messed it all up.
Another fact that cannot be cancelled with the repeating of inaccuracies is this. In 2010 former Prime Minister Bruce Golding, along with Audley Shaw, the then minister of finance and the public service, began decisive actions, including two domestic debt exchanges, to bring Jamaica’s debt trajectory on a more sustainable path. That was the genesis of Jamaica’s economic recovery programme after the PNP set the house ablaze.
One of the worst things a country can do is to trust socialists with the implementation of capitalist policies. The objective evidence cannot be challenged, the PNP and economic growth are antithetical. Jamaica must ‘walk wide’ of backsliding.
Transformation takes time
Transformation of our society for the better is not going to happen overnight. It has not worked that way anywhere in the developed world, not even in Singapore. The United States of America, Britain, Canada — and I could go on — were not transformed with the waving of a magic wand. It was a laborious and painful process which took hundreds of years.
The objective evidence shows that Jamaica has been caught in an unfortunate web of stop-and-go for much of the 60 years of our political independence. I believe Jamaica will need a sustained period of at least 20 years of uninterrupted and sound fiscal management, such as we have now, plus, improved social justice and enhanced law and order regeneration before we cancel out the deep-rooted damage done by the PNP in their 18½ years in power.
In relation to the kinds of transformative changes that have already taken place, are in train, and are soon to take place, it will be excruciatingly difficult when this process is complete for any political party — JLP or PNP — to roll back the tide and put Jamaica back in the category of the castaways.
Political scholars say political parties that have been in power for two consecutive terms typically go through four stages — fascination, admiration, disillusionment and contempt. It is at the point of disillusionment and contempt that the fat lady begins to sing. Her singing can best be silenced by the delivery of positive benefits/change which are felt in pockets of folks and seen on their dinner tables.
I have said this here before. For example, “The JLP will have to be on its Ps and Qs. Its members will have to focus on delivery. They will have to deliver or become a political castaway. Their slightest fumble will be amplified, especially by those who are sorely disappointed with another PNP defeat.” (Jamaica Observer, September 6, 2020) I believe the Andrew Holness Administrations gets it.
Garfield Higgins is an educator, journalist and a senior advisor to the minister of education & youth. Send comments to the Jamaica Observer or higgins160@yahoo.com.