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Published: Sunday | December 21, 2008
Ian Boyne, Contributor
The Opposition People's National Party (PNP) had taunted him and his ministers for weeks about living in fantasyland and not facing up to Jamaica's crisis in light of the global economic meltdown. Last week Sunday night, Bruce Golding answered and on Monday morning the PNP did not know quite how to respond.
Golding responded with a set of goodies which, if not a "stimulus" to the economy, was certainly a stimulus to his party, which had been battered by criticisms from all sides that it had been failing on its election promises. Golding calmed many in the manufacturing and small-business sectors by giving them concessions for which they had long fought and lobbied - from the time of the former 18-year-old PNP administration.
The Small Business Association president Edward Chin Mook told CVM's Garfield Burford on Direct Wednesday night that he remembered being brought near to tears at one meeting with PNP Industry Minister Philip Paulwell some years ago when he was told firmly by bureaucrats that "there is no way" that the proposal to allocate 15 per cent of government procurement to small business and micro-enterprises could be accommodated. On Sunday night Golding flew the gate for the small-business and micro sectors.
Also, Golding has instructed that government procurement officers now provide a 10 per cent margin of preference for Jamaican-owned companies so that once the bid is not more than 10 per cent above foreign competition, Jamaican workers would be given preference over foreign workers.
Entrepreneurial dynamism
He was not through with the goodies for the small business sector, which many acknowledge holds the key to entrepreneurial dynamism in the Jamaican economy. Some $350 million will be provided by the Development Bank of Jamaica through Jamaica National Small Business Loans Ltd to provide additional funding for small and micro-business. In addition, $150 million will be provided to the Jamaica Business Development Centre for on-lending at 10 per cent to micro-enterprises unable to meet full collateral requirements for conventional loans.
This is one of the most fundamental and far-reaching moves ever made by any government for the small-business sector. Another $150 million will be provided through credit unions. All businesses with annual sales above $1 million are required to register under GCT and submit monthly returns. That upper limit has been pushed to $3 million, freeing up an estimated 2,800 small businesses operators.
The Small Business Association president could not conceal his joy in interviews with the media the next day and onwards.
The larger manufacturers were happy, too. The president of the Jamaica Manufacturers Association (JMA) was happy about the fact that as of January 1 customs user fees payable on capital goods were being removed. On that date, too, the time allowed for depreciating the cost of capital equipment will be reduced from two years to one year. The tax on dividends for all locally owned companies will be abolished "to help them to keep going, to protect the jobs of the workers and to encourage them to invest in even difficult times".
The presidency of the JMA which can be quite strident and can be a pain in the neck for any government will not be making a lot of noise this Christmas. Some of the big hoteliers wanted more - as they usually do - but smaller hoteliers seem generally happy over the concessions given in terms of GCT reductions and the injection of a special loan facility of $500 million for working capital at an interest rate of just 10 per cent.
Then there were goodies for citizens who wanted to transfer their property and those many Jamaicans getting Christmas packages. Bruce Golding apparently heard that Santa had got stuck in the global economic slump and would not be passing through Jamaica so he volunteered to be the shoe-in. He seems to be a highly appreciated Santa. Except by the PNP, of course, which would be doubly concerned about the $2.4 billion road works announcement.
Last Monday, the PNP issued its release, for in politics, as in religion, certain rituals have to be followed, such as obligatory responses to statements by the Government, even when there is not much to criticise. The Opposition charged that the PM's statement came belatedly. Then it said it was struck by "the absence of a central focus to the measures particularly in terms of the sectors over which we have the greatest control". You can sense when someone is grasping for something coherent to say. Then the Opposition said the package of measures merely represented an effort to appease "those sectoral interests who have shouted the loudest and enjoy ready access to the prime minister". I find these political games rather interesting, in a perverse way.
If the prime minister had not responded to the interests of the manufacturers, the PNP would have drawn attention to that and point to "the legitimate claims of our manufacturing sector", no doubt pointing out how many jobs of Jamaican workers would be jeopardised if their calls were ignored. Besides, the PNP failed to take into consideration the substantial announcements with regard to small business people and the micro sector.
The Opposition complained that the package provided "little for the vulnerable and voiceless in the society". The PNP scoffed at the two-week window of relief for Christmas packages, but the many small people who will pay less and hence have some money for January school fees would not sniff at the relief. (You should hear PNP activist Dunstan Whittingham of the Vendors Association on the Breakfast Club in absolute elation over the robustness of the Christmas season as a result of Golding's relief measures).
Useful suggestion
The Opposition did raise one issue worth putting again on the table and that is the rollback in National Housing Trust mortgage rates. The prime minister presented arguments to show the insolvency of the NHT and we have to reckon with the financials in assessing the merits of the PNP's recommendation, but it was a useful suggestion and should be debated.
The PNP would certainly have wished that the prime minister had not scored as well as he did in his broadcast on Sunday night. (Even Mark Wignall in his Thursday column seems to have been appeased!)
In that initial PNP statement, apparently searching for things to say, they raised the issue of the financing of the package, but by the next day the finance minister had put that to trust by giving the figure.
The response of the PNP showed why our politics is so infantile and insipid. It manifested our political culture's inability to make rationality trump expedience, surrendering to the notion that it is the unpardonable sin to commend the opponent in any significant way.
But make no mistake about it, Golding's "stimulus" package - which is more like a mitigation package in my view - is no panacea. Indeed, it is a set of stop-gap measures to deal with the country's fundamental problems. It is, regrettably, a "faith-based" package.
Like previous administrations in doling out concessions and incentives to the private sector, the Government has no set of performance criteria attached.
It gives out these concessions and incentives with the faith that the private sector will make the investment in plant and machinery to keep workers in their jobs, employ new workers and exercise creativity, etc.
Capitalists>
This was not what was done in the Far East. There, the capitalists had to meet targets and had performance criteria attached to their benefits received. Our capitalists bawl and we give them what they want without asking anything concrete and measurable in return. This is because of their enormous class influence on all governments in Jamaica, with Michael Manley making a gallant effort to be exceptional.
The private sector has received incentives and concession in the past and the country has not had much to show for it. This country - and its governments - must start making demands on the private sector, not just responding to its demands.
We can't continue to accept this trickle-down theory that once the private sector is okay, the Jamaican workers and consumers will be okay. We have enough experience to prove otherwise. It is these kinds of criticisms that a progressive PNP should be making rather than the superficial and trite statement which came from Omar Davies (surprisingly) and Mark Golding. But then perhaps they are not on the progressive wing of the party.
In my view, for Jamaica to advance economically we need more capitalists with the kind of creative and transformational thinking like Michael Lee Chin. (Just a pity he is not channelling some of that energy into the real goods economy) He is not alone, but we don't have enough.
Karl Marx talked about the necessity of a creative and revolutionary capitalist class. Our capitalist class is backward, timid and parasitic. Business people should read an article published on Lee Chin in the Jamaica Observer of Friday December 12("Crisis Presents Opportunities for Jamaican Businesses - Lee Chin")
In that interview with Al Edwards, Lee Chin says, "In Jamaica we need to have a transformation goal. Therefore, we must have self-imposed voluntary strictures so that we don don't pay the consequences for being indisciplined."
Apparently, Lee Chin understands what's happening for rather than howling about the interest rate hike, as others, he notes perceptively, "Today we are in the situation because we have denuded ourselves of options. That's the reason why the Bank of Jamaica had to jack up interest rates when they should be moving them down". They should be moving them down if we had not done such a good job of exhausting viable alternatives, I take him to be saying.
Don Robotham put it well in his intervention on the Caribbean Dialogues forum run by some Marxists (Yes that species still exists!): "Don't analyse our situation too politically, in terms of what the PNP did or what the JLP did not do. Both have merits and our problems do not care about election cycles and Jammy (Jamaican) party politics".
As I said last week, our economic problems are deeply structural and are impatient of the kind of shallow analysis and political theatrics to which we are given.
Ian Boyne is a veteran journalist who may be contacted at ianboyne1@yahoo.com or columns@gleanerjm.com
http://www.jamaica-gleaner.com/glean...us/focus1.html
Ian Boyne, Contributor
The Opposition People's National Party (PNP) had taunted him and his ministers for weeks about living in fantasyland and not facing up to Jamaica's crisis in light of the global economic meltdown. Last week Sunday night, Bruce Golding answered and on Monday morning the PNP did not know quite how to respond.
Golding responded with a set of goodies which, if not a "stimulus" to the economy, was certainly a stimulus to his party, which had been battered by criticisms from all sides that it had been failing on its election promises. Golding calmed many in the manufacturing and small-business sectors by giving them concessions for which they had long fought and lobbied - from the time of the former 18-year-old PNP administration.
The Small Business Association president Edward Chin Mook told CVM's Garfield Burford on Direct Wednesday night that he remembered being brought near to tears at one meeting with PNP Industry Minister Philip Paulwell some years ago when he was told firmly by bureaucrats that "there is no way" that the proposal to allocate 15 per cent of government procurement to small business and micro-enterprises could be accommodated. On Sunday night Golding flew the gate for the small-business and micro sectors.
Also, Golding has instructed that government procurement officers now provide a 10 per cent margin of preference for Jamaican-owned companies so that once the bid is not more than 10 per cent above foreign competition, Jamaican workers would be given preference over foreign workers.
Entrepreneurial dynamism
He was not through with the goodies for the small business sector, which many acknowledge holds the key to entrepreneurial dynamism in the Jamaican economy. Some $350 million will be provided by the Development Bank of Jamaica through Jamaica National Small Business Loans Ltd to provide additional funding for small and micro-business. In addition, $150 million will be provided to the Jamaica Business Development Centre for on-lending at 10 per cent to micro-enterprises unable to meet full collateral requirements for conventional loans.
This is one of the most fundamental and far-reaching moves ever made by any government for the small-business sector. Another $150 million will be provided through credit unions. All businesses with annual sales above $1 million are required to register under GCT and submit monthly returns. That upper limit has been pushed to $3 million, freeing up an estimated 2,800 small businesses operators.
The Small Business Association president could not conceal his joy in interviews with the media the next day and onwards.
The larger manufacturers were happy, too. The president of the Jamaica Manufacturers Association (JMA) was happy about the fact that as of January 1 customs user fees payable on capital goods were being removed. On that date, too, the time allowed for depreciating the cost of capital equipment will be reduced from two years to one year. The tax on dividends for all locally owned companies will be abolished "to help them to keep going, to protect the jobs of the workers and to encourage them to invest in even difficult times".
The presidency of the JMA which can be quite strident and can be a pain in the neck for any government will not be making a lot of noise this Christmas. Some of the big hoteliers wanted more - as they usually do - but smaller hoteliers seem generally happy over the concessions given in terms of GCT reductions and the injection of a special loan facility of $500 million for working capital at an interest rate of just 10 per cent.
Then there were goodies for citizens who wanted to transfer their property and those many Jamaicans getting Christmas packages. Bruce Golding apparently heard that Santa had got stuck in the global economic slump and would not be passing through Jamaica so he volunteered to be the shoe-in. He seems to be a highly appreciated Santa. Except by the PNP, of course, which would be doubly concerned about the $2.4 billion road works announcement.
Last Monday, the PNP issued its release, for in politics, as in religion, certain rituals have to be followed, such as obligatory responses to statements by the Government, even when there is not much to criticise. The Opposition charged that the PM's statement came belatedly. Then it said it was struck by "the absence of a central focus to the measures particularly in terms of the sectors over which we have the greatest control". You can sense when someone is grasping for something coherent to say. Then the Opposition said the package of measures merely represented an effort to appease "those sectoral interests who have shouted the loudest and enjoy ready access to the prime minister". I find these political games rather interesting, in a perverse way.
If the prime minister had not responded to the interests of the manufacturers, the PNP would have drawn attention to that and point to "the legitimate claims of our manufacturing sector", no doubt pointing out how many jobs of Jamaican workers would be jeopardised if their calls were ignored. Besides, the PNP failed to take into consideration the substantial announcements with regard to small business people and the micro sector.
The Opposition complained that the package provided "little for the vulnerable and voiceless in the society". The PNP scoffed at the two-week window of relief for Christmas packages, but the many small people who will pay less and hence have some money for January school fees would not sniff at the relief. (You should hear PNP activist Dunstan Whittingham of the Vendors Association on the Breakfast Club in absolute elation over the robustness of the Christmas season as a result of Golding's relief measures).
Useful suggestion
The Opposition did raise one issue worth putting again on the table and that is the rollback in National Housing Trust mortgage rates. The prime minister presented arguments to show the insolvency of the NHT and we have to reckon with the financials in assessing the merits of the PNP's recommendation, but it was a useful suggestion and should be debated.
The PNP would certainly have wished that the prime minister had not scored as well as he did in his broadcast on Sunday night. (Even Mark Wignall in his Thursday column seems to have been appeased!)
In that initial PNP statement, apparently searching for things to say, they raised the issue of the financing of the package, but by the next day the finance minister had put that to trust by giving the figure.
The response of the PNP showed why our politics is so infantile and insipid. It manifested our political culture's inability to make rationality trump expedience, surrendering to the notion that it is the unpardonable sin to commend the opponent in any significant way.
But make no mistake about it, Golding's "stimulus" package - which is more like a mitigation package in my view - is no panacea. Indeed, it is a set of stop-gap measures to deal with the country's fundamental problems. It is, regrettably, a "faith-based" package.
Like previous administrations in doling out concessions and incentives to the private sector, the Government has no set of performance criteria attached.
It gives out these concessions and incentives with the faith that the private sector will make the investment in plant and machinery to keep workers in their jobs, employ new workers and exercise creativity, etc.
Capitalists>
This was not what was done in the Far East. There, the capitalists had to meet targets and had performance criteria attached to their benefits received. Our capitalists bawl and we give them what they want without asking anything concrete and measurable in return. This is because of their enormous class influence on all governments in Jamaica, with Michael Manley making a gallant effort to be exceptional.
The private sector has received incentives and concession in the past and the country has not had much to show for it. This country - and its governments - must start making demands on the private sector, not just responding to its demands.
We can't continue to accept this trickle-down theory that once the private sector is okay, the Jamaican workers and consumers will be okay. We have enough experience to prove otherwise. It is these kinds of criticisms that a progressive PNP should be making rather than the superficial and trite statement which came from Omar Davies (surprisingly) and Mark Golding. But then perhaps they are not on the progressive wing of the party.
In my view, for Jamaica to advance economically we need more capitalists with the kind of creative and transformational thinking like Michael Lee Chin. (Just a pity he is not channelling some of that energy into the real goods economy) He is not alone, but we don't have enough.
Karl Marx talked about the necessity of a creative and revolutionary capitalist class. Our capitalist class is backward, timid and parasitic. Business people should read an article published on Lee Chin in the Jamaica Observer of Friday December 12("Crisis Presents Opportunities for Jamaican Businesses - Lee Chin")
In that interview with Al Edwards, Lee Chin says, "In Jamaica we need to have a transformation goal. Therefore, we must have self-imposed voluntary strictures so that we don don't pay the consequences for being indisciplined."
Apparently, Lee Chin understands what's happening for rather than howling about the interest rate hike, as others, he notes perceptively, "Today we are in the situation because we have denuded ourselves of options. That's the reason why the Bank of Jamaica had to jack up interest rates when they should be moving them down". They should be moving them down if we had not done such a good job of exhausting viable alternatives, I take him to be saying.
Don Robotham put it well in his intervention on the Caribbean Dialogues forum run by some Marxists (Yes that species still exists!): "Don't analyse our situation too politically, in terms of what the PNP did or what the JLP did not do. Both have merits and our problems do not care about election cycles and Jammy (Jamaican) party politics".
As I said last week, our economic problems are deeply structural and are impatient of the kind of shallow analysis and political theatrics to which we are given.
Ian Boyne is a veteran journalist who may be contacted at ianboyne1@yahoo.com or columns@gleanerjm.com
http://www.jamaica-gleaner.com/glean...us/focus1.html
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