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.... misses the real deal.
Jamaica is not Ireland... so expecting results by replicating an Irish strategy is a non-starter. We need an education-led and community development-focused social partnership strategy.
This is a self-serving business only plan... too unbalanced in favour of the power elite.
Zacca supports J'can social partnership
Sunday, November 23, 2008
Arguing that Jamaica was at a similar crossroads to Ireland in 1987 when the European country's economy made a major turnaround and entered a period of high growth, PSOJ President Christopher Zacca last Thursday said that Jamaica needs a shared vision, and the political will to implement difficult reforms.
In his view, this required all Jamaica's social partners - Government, Opposition, civil society, union movement and private sector - to agree to keep Jamaica's corporate and other taxes low, simple and transparent, balance the budget, and build a true consensus between labour and management.
"Jamaica requires a time horizon of a minimum of between 10 and 20 years to fix its many problems, far longer than a typical politician's time horizon of several years, or even the life of the parliament. " Zacca said while making a presentation last Thursday at a seminar held by local independent think tank the Caribbean Policy Research Institute (CAPRI), in conjunction with the Caribbean Council, hosted a seminar entitled "Social Partnership in Jamaica - Elements of Success". "Business as usual is not an option, as it will just leave us to fall further behind," he declared. "Decades of no growth have denuded Jamaica's social capital, creating an everyman for himself, dog eat dog type of society."
"Instead of worrying how bad everything is, and how many mistakes we made in the past, let us look forward towards the opportunities that await us if we get things right," added the PSOJ president.
Arguing that the lack of economic growth was at the root of the problems facing Jamaica, he observed that "If we could organise the economy to grow at eight per cent per year, we could halve the debt-to-GDP ratio and double our standard of living in just under ten years."
Zacca observed that "Lower tax rates increase compliance. A flat rate of tax of 10 per cent at the wharf, for GCT and income tax would go a long way to reduce evasion, and more importantly, encourage both local and foreign businessmen to invest in Jamaica."
Zacca's call for lower tax rates was supported by CAPRI's Dr Damien King who said that it was a myth that Jamaicans will not pay taxes, as if they "see where the tax system is fair and equitable - they will pay their taxes".
As proof of his assertion, King noted that the last time there was a major tax reform in Jamaica in the 1980's, there was greatly increased compliance from citizens. He summed up by noting that he agreed with Haran "in positing that enforcement changes behaviour and Jamaicans as a people can collectively solve their problems if they adopt the "yes we can" philosophy".
An even greater priority was the issue of crime, and Zacca called for the groups represented at the seminar "particularly the Government and Opposition, to stop bickering amongst yourselves, and agree the legislative and other measures to deal with the problem" to allow Jamaica's people to dream of a better future.
The seminar included speeches from Opposition Spokesperson on Foreign Affairs and Trade Anthony Hylton, Minister Dwight Nelson, Minister without Portfolio, Ministry of Finance & Public Service, Chris Zacca, President of the Private Sector Organisation of Jamaica and Vincent Morrison, representing the Jamaica Confederation of Trade Unions.
The key presentation of the seminar, entitled "Ireland's Transformation - An Insight" was made by Irishman Paul Haran. Haran had retired as the Secretary General of Ireland's Department of Enterprise, Trade and Employment (the equivalent of having the Ministry of Industry and Commerce, Labour as well as Trade all under one roof) and was currently the Principal of the College
of Business & Law of Ireland's famous University College, Dublin.
Haran noted that after its independence in 1921, the Irish Government tried a policy of economic isolation and self sufficiency for many years which nearly destroyed the Irish economy.
The best metric of Ireland's economic failure was that their society couldn't provide its children with jobs that met their skill sets despite the very low participation of women in the labour force. As a result, despite Ireland's unusually high birth rates, there was a continuous fall in the population from 1841 into the 1980's as a result of massive net migration, creating a huge Irish diaspora overseas.
This very high rate of migration was driven by the sense of hopelessness of the Irish population, characterised by the common 1970's phrase "will the last one to leave please turn out the lights".
In 1987, Ireland had a debt to GDP ratio of 130 per cent (approximately the same as Jamaica's now), and despite massive emigration 17 per cent of the population was unemployed, of which 12 per cent were long term unemployed.
According to Haran, the Irish acted because the "platform was burning with the IMF at the door waiting to come in". The Irish Social Partnership came about "not from virtue, not from intellect" but because of the fiscal crisis and ever increasing debt to GDP ratio, with every cent Ireland earned in income tax used to pay debt. Up to 1987, Ireland had experienced "strikes and more strikes", with Trade Unions winning huge increases in nominal wages of 20 per cent which were then completely eroded through massive inflation eg 25 per cent and the increasing taxes required to pay for the debt.
As part of a social partnership agreement entitled the Programme for National Recovery between the Government, unions, private sector and other groups such as the farmers, Irish society accepted a massive reduction in public spending, including a two-year wage freeze and a reduction in hiring. For every three persons who retired in the public sector, only one position was filled. Employees were also offered career breaks, whereby they could leave the public service for up to five years, and their jobs would still be guaranteed after they returned.
Income tax was reduced, with corporate taxes being eventually lowered to a flat rate of 12.5 per cent leading to greater compliance and increased foreign direct investment inflows.
The new economic policy was so successful, that by 2007, the debt to GDP ratio had fallen to twenty-five percent and the long-term unemployment rate had dropped to 1.4 per cent.
Jamaica is not Ireland... so expecting results by replicating an Irish strategy is a non-starter. We need an education-led and community development-focused social partnership strategy.
This is a self-serving business only plan... too unbalanced in favour of the power elite.
Zacca supports J'can social partnership
Sunday, November 23, 2008
Arguing that Jamaica was at a similar crossroads to Ireland in 1987 when the European country's economy made a major turnaround and entered a period of high growth, PSOJ President Christopher Zacca last Thursday said that Jamaica needs a shared vision, and the political will to implement difficult reforms.
In his view, this required all Jamaica's social partners - Government, Opposition, civil society, union movement and private sector - to agree to keep Jamaica's corporate and other taxes low, simple and transparent, balance the budget, and build a true consensus between labour and management.
"Jamaica requires a time horizon of a minimum of between 10 and 20 years to fix its many problems, far longer than a typical politician's time horizon of several years, or even the life of the parliament. " Zacca said while making a presentation last Thursday at a seminar held by local independent think tank the Caribbean Policy Research Institute (CAPRI), in conjunction with the Caribbean Council, hosted a seminar entitled "Social Partnership in Jamaica - Elements of Success". "Business as usual is not an option, as it will just leave us to fall further behind," he declared. "Decades of no growth have denuded Jamaica's social capital, creating an everyman for himself, dog eat dog type of society."
"Instead of worrying how bad everything is, and how many mistakes we made in the past, let us look forward towards the opportunities that await us if we get things right," added the PSOJ president.
Arguing that the lack of economic growth was at the root of the problems facing Jamaica, he observed that "If we could organise the economy to grow at eight per cent per year, we could halve the debt-to-GDP ratio and double our standard of living in just under ten years."
Zacca observed that "Lower tax rates increase compliance. A flat rate of tax of 10 per cent at the wharf, for GCT and income tax would go a long way to reduce evasion, and more importantly, encourage both local and foreign businessmen to invest in Jamaica."
Zacca's call for lower tax rates was supported by CAPRI's Dr Damien King who said that it was a myth that Jamaicans will not pay taxes, as if they "see where the tax system is fair and equitable - they will pay their taxes".
As proof of his assertion, King noted that the last time there was a major tax reform in Jamaica in the 1980's, there was greatly increased compliance from citizens. He summed up by noting that he agreed with Haran "in positing that enforcement changes behaviour and Jamaicans as a people can collectively solve their problems if they adopt the "yes we can" philosophy".
An even greater priority was the issue of crime, and Zacca called for the groups represented at the seminar "particularly the Government and Opposition, to stop bickering amongst yourselves, and agree the legislative and other measures to deal with the problem" to allow Jamaica's people to dream of a better future.
The seminar included speeches from Opposition Spokesperson on Foreign Affairs and Trade Anthony Hylton, Minister Dwight Nelson, Minister without Portfolio, Ministry of Finance & Public Service, Chris Zacca, President of the Private Sector Organisation of Jamaica and Vincent Morrison, representing the Jamaica Confederation of Trade Unions.
The key presentation of the seminar, entitled "Ireland's Transformation - An Insight" was made by Irishman Paul Haran. Haran had retired as the Secretary General of Ireland's Department of Enterprise, Trade and Employment (the equivalent of having the Ministry of Industry and Commerce, Labour as well as Trade all under one roof) and was currently the Principal of the College
of Business & Law of Ireland's famous University College, Dublin.
Haran noted that after its independence in 1921, the Irish Government tried a policy of economic isolation and self sufficiency for many years which nearly destroyed the Irish economy.
The best metric of Ireland's economic failure was that their society couldn't provide its children with jobs that met their skill sets despite the very low participation of women in the labour force. As a result, despite Ireland's unusually high birth rates, there was a continuous fall in the population from 1841 into the 1980's as a result of massive net migration, creating a huge Irish diaspora overseas.
This very high rate of migration was driven by the sense of hopelessness of the Irish population, characterised by the common 1970's phrase "will the last one to leave please turn out the lights".
In 1987, Ireland had a debt to GDP ratio of 130 per cent (approximately the same as Jamaica's now), and despite massive emigration 17 per cent of the population was unemployed, of which 12 per cent were long term unemployed.
According to Haran, the Irish acted because the "platform was burning with the IMF at the door waiting to come in". The Irish Social Partnership came about "not from virtue, not from intellect" but because of the fiscal crisis and ever increasing debt to GDP ratio, with every cent Ireland earned in income tax used to pay debt. Up to 1987, Ireland had experienced "strikes and more strikes", with Trade Unions winning huge increases in nominal wages of 20 per cent which were then completely eroded through massive inflation eg 25 per cent and the increasing taxes required to pay for the debt.
As part of a social partnership agreement entitled the Programme for National Recovery between the Government, unions, private sector and other groups such as the farmers, Irish society accepted a massive reduction in public spending, including a two-year wage freeze and a reduction in hiring. For every three persons who retired in the public sector, only one position was filled. Employees were also offered career breaks, whereby they could leave the public service for up to five years, and their jobs would still be guaranteed after they returned.
Income tax was reduced, with corporate taxes being eventually lowered to a flat rate of 12.5 per cent leading to greater compliance and increased foreign direct investment inflows.
The new economic policy was so successful, that by 2007, the debt to GDP ratio had fallen to twenty-five percent and the long-term unemployment rate had dropped to 1.4 per cent.
