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The PNP and the private sector - Pt III
published: Sunday | October 28, 2007
Arnold Bertram
Between 1952 and 1972 the Jamaican economy experienced 20 years of continuous unprecedented economic expansion. During that period, gross domestic product (GDP) growth averaged 6.5 per cent annually with a phenomenal 14.1 per cent recorded for the fiscal year 1956/57.
In 1970 Jamaica ranked first among all developing countries and 19th, just behind Spain, on a list of 79 industrial and developing countries for which the United Nations Development Programme (UNDP) calculated human development indicators (HDI). This index combines income per capita, life expectancy and educational attainment (Kari Levitt). For the record, Singapore was ranked at 26th.
FEW VOICES OF CELEBRATION
Unbelievably, very few voices were raised in celebration of Jamaica's most impressive economic performance since Emancipation; and even less for the Jamaican private sector which made it all possible by their investments, particularly in manufacturing and tourism. Prime Minister Hugh Shearer, who had presided over much of the progress, was denounced as an agent of oppression, and Arthur Lewis, whose ideas had guided the successful process of industrialisation, vilified as a tool of imperialism.
The backdrop to this deafening silence about Jamaica's economic success was the parallel social deterioration, primarily reflected in 26 per cent unemployment rate, and the obvious concentration of wealth in the hands of a racial minority. Despite racial protests in 1965 and 1968, the continued absence of successful black entrepreneurs from the boardrooms of corporate Jamaica validated public perception of the racial exclusiveness of Jamaica's economic elite, and made it impossible for the creators of wealth to blow their own trumpet.
However, while the racial exclusiveness of the ruling elite contributed to social instability, the partial implementation of the economic model was far more fundamental. Neither the radical land reform programme nor the modernisation of agriculture prescribed by Lewis had been implemented, and the manufacturing sector, despite its spectacular growth, was unable to absorb the excess labour from a rapidly contracting agricultural sector.
The sustained investments in education and training by the state and the private sector required to improve the productivity of the labour force never materialised. The record shows that the private sector during slavery made a far more substantial contribution to education than the private sector in independent Jamaica has made so far. The resistance of the private sector to firm measures aimed at reducing tax evasion and increasing revenues showed a lack of vision.
EMERGENCE OF MICHAEL MANLEY
In 1969 Michael Manley was elected president of the People's National Party (PNP) and it was to him that the nation, hopelessly divided by class and race and on the verge of implosion, turned for social stability. Such was Manley's power of articulation that even as he called on the Jamaican people "to assault the economic system that perpetuates disadvantages", he simultaneously wooed the national capitalist class, by pointing them to the benefits of economic nationalism which was to be achieved by "wresting the commanding heights of the economy from foreign control".
Between 1969 and 1972 Manley engaged the more nationalist stratum within the private sector, organising them in a number of task forces to develop a plan for specific areas of the economy, and enlisted their support for a radical break with the economic model pursued up to 1972, and to develop in its place a more nationalist and self-reliant approach.
The results of the elections of 1972 showed Manley winning an unprecedented 56 per cent of the popular vote and 37 of the 53 seats in Parliament, and as the Stone polls confirmed, Manley's electoral alliance included an amazing "75 per cent of the white-collar workers and other professionals, and 60 per cent of the capitalists and wealthy professionals". In the constituency of Northern St. Andrew where the economic and social elite lived, the PNP's candidate got 75.8 per cent of the popular vote.
FIRST MAJOR SETBACK
Manley's political project, based on an all-class alliance, received its first major setback in 1973. The economic crisis which unfolded that year saw the price of oil move from $3 to $11 per barrel, followed by a substantial devaluation of the Jamaican dollar. The manufacturing sector with its dependence on imported energy was the first casualty.
It was Manley's response to the economic crisis which alienated him from a large part of the private sector. Manley responded by expanding the role of the state in the economy and, to this end, the Government negotiated the acquisition of all foreign-owned sugar estates, public utilities, Barclays Bank, the cement factory and 51 per cent of the assets of the bauxite companies. The private sector wanted protection from an increasingly hostile international economic environment, not competition from a state sector.
Up to 1975 Manley still retained substantial support among the owners of capital. It was two leading members of the private sector, Mayer Matalon and Pat Rousseau, who had negotiated the levy on behalf of the Government against the bauxite companies, and when a New York Times editorial called for the developed countries to respond against what they termed a 'Third World cartel', The Daily Gleaner responded with a stirring defence of Jamaica's sovereignty.
By the elections of 1976, however, the polarisation of the society was evident and a parting of the ways had become inevitable. The masses came together to give Michael Manley and the PNP 47 of the 60 parliamentary seats, even as the private sector defected in significant numbers. This defection was particularly evident in the constituency of North St. Andrew, which the PNP lost after winning with 78 per cent of the popular vote in 1972.
RELATIONSHIP SOURED
That same year the Jamaica Manufacturers' Association and the Chamber of Commerce came together to form the Private Sector Organisation of Jamaica to defend the interests of capital against Manley's perceived communism. In the context of the Cold War, Manley's strident anti-imperialism soured his relationship with the United States and contributed to the emergence of an anti-Manley coalition between the local private sector and their U.S. counterparts.
Between 1977 and 1980, the relationship between the PNP and the private sector assumed hostile proportions with disastrous consequences for the economy. In 1980, Jamaica recorded its lowest levels of production in over a quarter century, and the PNP went down to its worst defeat in the elections of that year.
To this day, the private sector bitterly blames Michael Manley and the radical intelligentsia for the 'debacle' of the 1970s and the exodus of much of Jamaica's entrepreneurial and professional talent. They spurn any claim by the radical intelligentsia of sincerity and personal sacrifices for the national good and a righteous cause. There has never been any healing between these two groups and, as a consequence, Jamaica has since remained divided and incapable of any sustained national effort.
MANLEY'S NEW COURSE
The complex nature of the developmental process in Jamaica became even more pronounced as, within two years, the private sector became disenchanted with the authoritarianism of the new Prime Minister, Edward Seaga, and turned again to Michael Manley, who had used his years in opposition to rethink his economic policy and begin improving his relationship with the private sector, as well as the United States of America. In 1989 the PNP won a resounding victory and within a year, Manley took the critical step of building a new bridge with the private sector by deregulating and liberalising the Jamaican economy.
P.J. Patterson, who succeeded Manley, continued the economic programme and carried the relationship with the private sector to another level, and brokered a social partnership which brought the private sector, the Government and the labour unions together in a working alliance which brought inflation down to single-digit levels.
As the polls during the last general elections confirmed, a major defection of the private sector from the PNP to the Jamaica Labor Party has taken place. The present focus of the PNP leadership on poverty alleviation, rather than wealth creation, neither offers an attractive vision of the future nor the means of eliminating poverty. For while economic expansion does not automatically lead to a reduction in poverty, an expanding economy is more likely to help eliminate the condition of poverty, than one which is stagnating or contracting.
SUSTAINED WEAK PERFORMANCE
The urgency of a new and dynamic relationship between a party hoping to form the government and the private sector is underlined by the sustained weak performance of the Jamaican economy. "An examination of the available data shows that, for the period 1972-1996, Jamaica's GDP grew by only 8.8 per cent or an average annual rate of 0.3 per cent per annum, and that per capital GDP fell by 17.5 per cent or an average annual rate of 0.7 per cent per annum." (Jefferson)
The PNP could be in the political wilderness for as long as the present veil of suspicion separates the party from the private sector. This veil will only be lifted by leadership which articulates a vision of the new Jamaica in which the wealth creation process is led by private enterprise and anchored on the tenets of civility, decency and integrity; a Jamaica in which the development process increases the size and influence of the productive classes, creates the basis for eliminating poverty and limits the influence of the 'lumpen'.
It was Norman Manley who demonstrated the importance of using the period in opposition to prepare for government. Even before he led the PNP to power in 1955, he had convinced the government of the day of the relevance of his economic policies for Jamaica. He had also built consensus around his programme for economic development with critical stakeholders, including the private sector, and shown a willingness to recruit the best talent regardless of partisan affiliation, race or nationality. Nothing less is expected of the leadership of the PNP as the party prepares itself for the next time.
Arnold Bertram, a historian and former minister of government, is currently chairman and CEO of Research and Project Development Ltd. Email: redev.atb@gmail.com.
published: Sunday | October 28, 2007
Arnold Bertram
Between 1952 and 1972 the Jamaican economy experienced 20 years of continuous unprecedented economic expansion. During that period, gross domestic product (GDP) growth averaged 6.5 per cent annually with a phenomenal 14.1 per cent recorded for the fiscal year 1956/57.
In 1970 Jamaica ranked first among all developing countries and 19th, just behind Spain, on a list of 79 industrial and developing countries for which the United Nations Development Programme (UNDP) calculated human development indicators (HDI). This index combines income per capita, life expectancy and educational attainment (Kari Levitt). For the record, Singapore was ranked at 26th.
FEW VOICES OF CELEBRATION
Unbelievably, very few voices were raised in celebration of Jamaica's most impressive economic performance since Emancipation; and even less for the Jamaican private sector which made it all possible by their investments, particularly in manufacturing and tourism. Prime Minister Hugh Shearer, who had presided over much of the progress, was denounced as an agent of oppression, and Arthur Lewis, whose ideas had guided the successful process of industrialisation, vilified as a tool of imperialism.
The backdrop to this deafening silence about Jamaica's economic success was the parallel social deterioration, primarily reflected in 26 per cent unemployment rate, and the obvious concentration of wealth in the hands of a racial minority. Despite racial protests in 1965 and 1968, the continued absence of successful black entrepreneurs from the boardrooms of corporate Jamaica validated public perception of the racial exclusiveness of Jamaica's economic elite, and made it impossible for the creators of wealth to blow their own trumpet.
However, while the racial exclusiveness of the ruling elite contributed to social instability, the partial implementation of the economic model was far more fundamental. Neither the radical land reform programme nor the modernisation of agriculture prescribed by Lewis had been implemented, and the manufacturing sector, despite its spectacular growth, was unable to absorb the excess labour from a rapidly contracting agricultural sector.
The sustained investments in education and training by the state and the private sector required to improve the productivity of the labour force never materialised. The record shows that the private sector during slavery made a far more substantial contribution to education than the private sector in independent Jamaica has made so far. The resistance of the private sector to firm measures aimed at reducing tax evasion and increasing revenues showed a lack of vision.
EMERGENCE OF MICHAEL MANLEY
In 1969 Michael Manley was elected president of the People's National Party (PNP) and it was to him that the nation, hopelessly divided by class and race and on the verge of implosion, turned for social stability. Such was Manley's power of articulation that even as he called on the Jamaican people "to assault the economic system that perpetuates disadvantages", he simultaneously wooed the national capitalist class, by pointing them to the benefits of economic nationalism which was to be achieved by "wresting the commanding heights of the economy from foreign control".
Between 1969 and 1972 Manley engaged the more nationalist stratum within the private sector, organising them in a number of task forces to develop a plan for specific areas of the economy, and enlisted their support for a radical break with the economic model pursued up to 1972, and to develop in its place a more nationalist and self-reliant approach.
The results of the elections of 1972 showed Manley winning an unprecedented 56 per cent of the popular vote and 37 of the 53 seats in Parliament, and as the Stone polls confirmed, Manley's electoral alliance included an amazing "75 per cent of the white-collar workers and other professionals, and 60 per cent of the capitalists and wealthy professionals". In the constituency of Northern St. Andrew where the economic and social elite lived, the PNP's candidate got 75.8 per cent of the popular vote.
FIRST MAJOR SETBACK
Manley's political project, based on an all-class alliance, received its first major setback in 1973. The economic crisis which unfolded that year saw the price of oil move from $3 to $11 per barrel, followed by a substantial devaluation of the Jamaican dollar. The manufacturing sector with its dependence on imported energy was the first casualty.
It was Manley's response to the economic crisis which alienated him from a large part of the private sector. Manley responded by expanding the role of the state in the economy and, to this end, the Government negotiated the acquisition of all foreign-owned sugar estates, public utilities, Barclays Bank, the cement factory and 51 per cent of the assets of the bauxite companies. The private sector wanted protection from an increasingly hostile international economic environment, not competition from a state sector.
Up to 1975 Manley still retained substantial support among the owners of capital. It was two leading members of the private sector, Mayer Matalon and Pat Rousseau, who had negotiated the levy on behalf of the Government against the bauxite companies, and when a New York Times editorial called for the developed countries to respond against what they termed a 'Third World cartel', The Daily Gleaner responded with a stirring defence of Jamaica's sovereignty.
By the elections of 1976, however, the polarisation of the society was evident and a parting of the ways had become inevitable. The masses came together to give Michael Manley and the PNP 47 of the 60 parliamentary seats, even as the private sector defected in significant numbers. This defection was particularly evident in the constituency of North St. Andrew, which the PNP lost after winning with 78 per cent of the popular vote in 1972.
RELATIONSHIP SOURED
That same year the Jamaica Manufacturers' Association and the Chamber of Commerce came together to form the Private Sector Organisation of Jamaica to defend the interests of capital against Manley's perceived communism. In the context of the Cold War, Manley's strident anti-imperialism soured his relationship with the United States and contributed to the emergence of an anti-Manley coalition between the local private sector and their U.S. counterparts.
Between 1977 and 1980, the relationship between the PNP and the private sector assumed hostile proportions with disastrous consequences for the economy. In 1980, Jamaica recorded its lowest levels of production in over a quarter century, and the PNP went down to its worst defeat in the elections of that year.
To this day, the private sector bitterly blames Michael Manley and the radical intelligentsia for the 'debacle' of the 1970s and the exodus of much of Jamaica's entrepreneurial and professional talent. They spurn any claim by the radical intelligentsia of sincerity and personal sacrifices for the national good and a righteous cause. There has never been any healing between these two groups and, as a consequence, Jamaica has since remained divided and incapable of any sustained national effort.
MANLEY'S NEW COURSE
The complex nature of the developmental process in Jamaica became even more pronounced as, within two years, the private sector became disenchanted with the authoritarianism of the new Prime Minister, Edward Seaga, and turned again to Michael Manley, who had used his years in opposition to rethink his economic policy and begin improving his relationship with the private sector, as well as the United States of America. In 1989 the PNP won a resounding victory and within a year, Manley took the critical step of building a new bridge with the private sector by deregulating and liberalising the Jamaican economy.
P.J. Patterson, who succeeded Manley, continued the economic programme and carried the relationship with the private sector to another level, and brokered a social partnership which brought the private sector, the Government and the labour unions together in a working alliance which brought inflation down to single-digit levels.
As the polls during the last general elections confirmed, a major defection of the private sector from the PNP to the Jamaica Labor Party has taken place. The present focus of the PNP leadership on poverty alleviation, rather than wealth creation, neither offers an attractive vision of the future nor the means of eliminating poverty. For while economic expansion does not automatically lead to a reduction in poverty, an expanding economy is more likely to help eliminate the condition of poverty, than one which is stagnating or contracting.
SUSTAINED WEAK PERFORMANCE
The urgency of a new and dynamic relationship between a party hoping to form the government and the private sector is underlined by the sustained weak performance of the Jamaican economy. "An examination of the available data shows that, for the period 1972-1996, Jamaica's GDP grew by only 8.8 per cent or an average annual rate of 0.3 per cent per annum, and that per capital GDP fell by 17.5 per cent or an average annual rate of 0.7 per cent per annum." (Jefferson)
The PNP could be in the political wilderness for as long as the present veil of suspicion separates the party from the private sector. This veil will only be lifted by leadership which articulates a vision of the new Jamaica in which the wealth creation process is led by private enterprise and anchored on the tenets of civility, decency and integrity; a Jamaica in which the development process increases the size and influence of the productive classes, creates the basis for eliminating poverty and limits the influence of the 'lumpen'.
It was Norman Manley who demonstrated the importance of using the period in opposition to prepare for government. Even before he led the PNP to power in 1955, he had convinced the government of the day of the relevance of his economic policies for Jamaica. He had also built consensus around his programme for economic development with critical stakeholders, including the private sector, and shown a willingness to recruit the best talent regardless of partisan affiliation, race or nationality. Nothing less is expected of the leadership of the PNP as the party prepares itself for the next time.
Arnold Bertram, a historian and former minister of government, is currently chairman and CEO of Research and Project Development Ltd. Email: redev.atb@gmail.com.
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