They still ask: Why doesn't Jamaica grow?....

[ReggaeMike]

Small disagreement. The PNP hit a wall in 1996...long before 2002.

To me PJ messed up what Manley laid down.

Yes, the graph on page 15 did show the standard of living levelling off around the mid-1990s, but the rise in the standard of living between 1987 and the mid-90s probably had little, if anything, to do with what Seaga or Manley did. Just as with the rise in the standard of living from 1962 to 1972 it isn't hard to imagine that the 1987-1995 rise in living standards had much more to do with external factors such as falling oil prices (the Iran-Iraq war was dying down, the Gulf War was short and there was no more Arab oil embargo); US economic recovery following Black Monday in 1987 (leading to increased demand for some of Jamaica's exports as well as boosting the spending power of tourists); CaribCan and CBI II.

The wall experienced in the standard of living in the mid-90s might also have a lot to do with external factors (Mexico joining NAFTA in 1994 and thus nullifying the effects of CaribCan and CBI II; the free zones becoming uncompetitive due to foreign competition; lessened US interest in the region following the end of the Cold War and the steady rise in oil prices after the mid-1990s) as well as the traditional government negligence. So just as the JLP government of 1962-1972 basically ignored the problems in bauxite and rising unemployment (which reached over 20% by the end of their stint and most likely directly contributed to later problems as high unemployment always has the potential to generate more crime and problems), the PNP government from the mid-1990s onwards followed the PNP and JLP governments (or the "JLPNP" as I've seen them called on some creative graffiti) of the 1970s and 1980s and early 1990s in basically ignored the problems of uncompetitiveness and crime which just strangled the economy.

To me that is the saddest part of the study. It basically summarizes in 15 pages what commentators and pundits and regular folks have been pouring out volumes of work to describe: the fact that our politicians don't really do anything positive but just let things happen while encourage negative things (garrisons, corruption, uncompetitiveness).

It wouldn't surprise me if further study indicated that the high unemployment by the early 1970s contributed to the acceptance of the argument that "better mus' come" (as opposed to "better mus' be earned"). When you have 1 in 5 people unemployed that represents a large pool of discontented people. The fact that the PNP in the 1970s then implemented ruinous policies only made matters worse.

The study also indicates that a lot of the debate surrounding institutions is almost a waste of time. With the set of politicians we have had since independence it wouldn't have mattered whether we used the Westminster model or the American model. We would still be in trouble. That is because it is the people who are operating the model which is the problem not the model itself. So Mr. Burke can wax on about faults in our electoral system, but it is really faults in ourselves. Britain, Canada, Australia, New Zealand, Bahamas and Barbados use the same model but they don't have the supposed problem of scheduling polls (a by-election and a local election) two days apart. That is because their politicians are mature enough to realize that elections shouldn't be played around with that way (certainly they do still play around with elections, but within sensible limits). All that needed to be done in the case Mr. Burke cited in his article was for the 1969 local and by-election to be rescheduled (as was entirely within the powers of the government) so that they would be maybe 10 days apart. Corrupt politicians intent on subverting the system for themselves first and for their parties second (with the country as an after-thought to an after-thought) will invariably find ways to pervert the system. So there are numerous examples of corrupt politicians in Africa, Latin America and Asia who operated under both the Westminster/Parliamentary style of government and the American/Presidential style of government. The most prominent examples I can think of who were corrupt under the American style system are Nixon, Marcos (the Philippines) and Batista (Cuba). I'm sure those 3 "gentlemen" would have been corrupt under the Westminster system too. On the flip side Singapore under the almost one-party rule of Lee Kwan Yew has been a much better place to live than other similar quasi- or full blown one party dictatorships like Laos, PRI run Mexico or Diem's South Vietnam. I won't even bother to go into the example of the bunch of folks in the 1930s who subverted one of the most progressive constitutions of the day..

So now we find ourselves debating our system of government instead of debating who governs us and end up falling hook, line and sinker for the platitudes of politicians like Seaga, Patterson, Simpson-Miller and Golding who wax lyrically on about "real sovereignty" and "term limits" and "republic" and other such nice sounding words which won't make damned bit of difference if the same buch of people are running the show (and note, term limits and separate elections for Prime Minister do NOT work well with a Westminster system as can be seen when Israel basically had a non-function government in the mid-1990s when they introduced the idea - they actually abandoned it and went back to the old system). As long as our politicians put self and party before the greater good of the island and continue to maintain links with dons, then no system of governance (except maybe foreign occupation) will help Jamaica.

Basically real change won't happen as long as the JLPNP runs the show and gets fat and lazy off closed-minded thinking by the electorate (which has now been lead to believe that they only have 2 choices (or in some cases forced/pressured into making only 1 choice)). More people should thus probably vote independent or failing that beg Britain to take us back for 6 or so years under trusteeship until we learn how to run the system properly. As a society we have become so focused on party "politrics" that many pundits, commentators and the average man seems to forget that the constitution mentions nothing of parties (the Westminster and American Congress systems are all originally geared towards independent candidates in theory) and many now worry about a "tie" (as if it were a bad thing) and as a result call for uneven numbers of seats (as though we still couldn't get a tie if say JLP won 31, PNP won 31 and some lucky independent won 1 seat).

[Assasin]

So basically you are saying the external factors and not the policies of our government is responsible for the rise in the standard of living? The external factors alone don't do it. How is it others prepare better to meet these external crisis than we do?

[ReggaeMike]

So basically you are saying the external factors and not the policies of our government is responsible for the rise in the standard of living? The external factors alone don't do it. How is it others prepare better to meet these external crisis than we do?

Well how else would you explain the unusual nature of the economy since 1962?

Which other countries do you know which experienced a rising standard of living alongside rising unemployment?

How else do you explain why Barbados' standard of living has more less always been on the increase no matter what was going on in the world whilst our standard of living seems to mirror events? Plus what policies can be cited as being in common between Seaga in 1987 to 1989, Manley in 1989 to 1992 and PJ Patterson between 1992 and 1996? Note the graph shows a definite upward trend in the standard of living over 1987 to 1996 with basically nothing to indicate changes in administration which might indicate changes in policy being responsible for this upward trend.

On the other hand there were definitely external events which more or less coincide with these time periods - the recovery after Black Monday in 1987, CBI II, CaribCan, falling oil prices, Mexican accession to NAFTA, the drop in interest by the US and rising oil prices in the mid-1990s. Nothing that Seaga did between 1980 and 1987 seemed to do anything and the free zones established between 1976 and 1985 certainly don't show any effect on the chart, so what did our leaders do between 1987 and 1996 to cause a rise in living standards?


How is it that others prepare better to meet these external crisis than we do? Simple: They prepare; we don't. Mauritius or one of those islands in the Indian Ocean prepared itself for the end of sugar by diversifying it's agriculture to include ornamental flowers, fruit trees and various vegetables. We just sat around believing that Lome would continue forever and then bawled when the EU brought about changes. Tell you what to answer your own question, name 5 ways in which Seaga, Manley or Patterson prepared the country for any external crisis of note. I'm drawing blank (maybe you can think of something). I can't consider the CBI or CBI II to be the work of Seaga or Manley because it was a US initiative and involved more than just Jamaica and the USA (Seaga can trumpet it all he wants, the fact is the US was aiming to do something like CBI in order to weaken leftists movements in the region and I don't consider hanging on to someone else's coattails to be "preparation" - in any case the first CBI in 1984 had no noticeable effect on the graph). Similarly CaribCan is a Canadian government initiative. In fact I can't think of anything that Jamaica has done over 1985 to 1996 that even approached the scale of Barbados' 1993 Wage and Price Protocol (and this in a country with the land area of Hanover and the population of St. James).

[Willi]

Some good points there.

Our polytrixians really are running a caricature of the Westminster moggle.

[ReggaeMike]

Some good points there.

Our polytrixians really are running a caricature of the Westminster moggle.

And they will run a caricature of ANY model if we let them.

[Willi]

Nah man...oil price started trending up from about 2003.

See graph...

http://www.wtrg.com/oil_graphs/oilprice1947.gif

Stuff we did..structurally adjust the economy, 807 push resulting at one time having Jam. supplying 14% of all underwear sold in the US, Heart retraining, liberalize the dollar, Agro21/Winter veggies, etc.

I agree that far more should have been done, such as diversify into cultural tourism (all now Pt Royal nuh fix up), lure amusement parks like Disney to Jamdown, increase trade with Europe, partner with countries like Chile and Costa Rica that actively courted us and we ignored them, expanded the stock market by introducing junior listing, diversify into niche agro sectors, introduce Casino diversification to tourism etc, etc.

[Willi]

Yow, where were you all this time??

I like the tone of your discussion. You are into serious solution oriented meaty arguments. Unfortunately, sometimes we descend into the cass cass. Funny stuff, but distracting to serious arguments at other times.

[Assasin]

How do you explain when the world was growing an average of 4 percent and places like China, Ireland etc was growing we didn't enjoy such favors especially in the 1990s to 2006?

The fact is our leader threw us under the bus. Wasn't Barbados also with the CBI? The fact is others prepare while we idle. We could have done much better. The fact is we need to use whatever advantages we do have because even in a world crisis right some countries are growing but it takes good leadership.

[ReggaeMike]

Nah man...oil price started trending up from about 2003.

See graph...

http://www.wtrg.com/oil_graphs/oilprice1947.gif

Stuff we did..structurally adjust the economy, 807 push resulting at one time having Jam. supplying 14% of all underwear sold in the US, Heart retraining, liberalize the dollar, Agro21/Winter veggies, etc.

I agree that far more should have been done, such as diversify into cultural tourism (all now Pt Royal nuh fix up), lure amusement parks like Disney to Jamdown, increase trade with Europe, partner with countries like Chile and Costa Rica that actively courted us and we ignored them, expanded the stock market by introducing junior listing, diversify into niche agro sectors, introduce Casino diversification to tourism etc, etc.

The graph shows oil starting to rise in price around the time of the Asian Financial Crisis which was in 1997. The lowest price (after the First Gulf War/Iran-Iraq War) was in 1995/1996. Since then it has been on an upward trajectory. In 2003 it really took off, but the upward trend started long before that. So couple that with our devaluation policy (which is flawed in a major way because Jamaican businesses tend not to adjust the equivalent price of their goods and services in US dollars to reflect the devaluation) and uncompetitive businesses are only a matter of time.

[Assasin]

what is the reason for our devaluation policy?

In Jamaica is devaluation really a policy? or it is just the after effect of our uncompetitiveness and bad policies.

[ReggaeMike]

How do you explain when the world was growing an average of 4 percent and places like China, Ireland etc was growing we didn't enjoy such favors especially in the 1990s to 2006?

China has economy of scales and is a major trading partner of the USA, Europe and Russia. We delude ourselves into thinking that the US values us as a trading partner - the US doesn't need us, but we need them. The US does need China however and China needs the US. Even Singapore (6 million people) and the UAE (6 million of which 80% aren't even citizens) make it on one of the 3 lists of the US top 10 trading partners (the surplus list).

Ireland benefits from the EU and their single market (which was launched in the 1960s and strengthened considerably in......1993!). Ireland also has economy of scales aiding it since it has about 4-5 million in the republic and 6 million on the island (where there has been freedom of movement ever since partition) and access to a market (labour and capital) of over 200 million. We on the other hand have 2 million, mostly undereducated and poor souls and question the wisdom of Caricom because of trade deficits even though Caricom doesn't cause those deficits (basically we like to find scapegoats).

Most importantly, China and Ireland had leaders who were committed to growth-policies but for different reasons. China's communist leadership since Deng Xiaoping has been committed to making the average Chinese citizen richer so that they will be loyal to the Party and the State (which is almost one and the same where China is concerned). Ireland's leaders just want growth and education because they see it as the right thing to do.

The fact is our leader threw us under the bus. Wasn't Barbados also with the CBI? The fact is others prepare while we idle. We could have done much better. The fact is we need to use whatever advantages we do have because even in a world crisis right some countries are growing but it takes good leadership.

Yeah Barbados was in the CBI. Pretty much all of the Caribbean was. If Seaga attempts to take credit for the CBI he will have to share it with Adams from Bim and Reagan from America and we all know that Reagan could rightfully claim most (if not all) of the credit since the CBI was basically a handout by the US to the region and Seaga and Adams can't handout what they don't have. As you said though other countries (like Bim) take advantage of whatever they have (resources - so educating their people) and whatever comes their way (external factors like the CBI) to grow. We only wait for external factors to be favourable.

[ReggaeMike]

what is the reason for our devaluation policy?

In Jamaica is devaluation really a policy? or it is just the after effect of our uncompetitiveness and bad policies.

Basically we threw away a good dollar in order to follow the idea of "competitive devaluation".

Have you ever used Caymanian currency? Well Caymanian currency is basically a time capsule of what the Jamaican dollar used to be worth. No joke. When Jamaica moved from the Jamaican pound (J£1 = US$2.40) to the Jamaican dollar (originally half a Jamaican pound so J$1 = US$1.20), Cayman kept using Jamaican currency until....1972 (hmm...that date seems to crop up often, no? I guess Cayman even then could see that the JLPNP were a bunch of jokers and about to wreck di place). Cayman then introduced the Cayman dollar on par (so KY$1 = J$1 = US$1.20) and they fixed it to the US dollar at that same rate in 1974. Since then our politicians have just played around with our dollar. Seaga did various fixed devaluations in the 1980s and at some point the JLPNP geniuses introduced a dual regime (one rate for everybody else and imports and one rate for exports and the government) which more reflected their fantasies than realistic policy. Then Manley in the 1990s decided to do away with the mirage of fixed devaluations and just let the dollar float.

We followed the devaluation policy because that is what the IMF recommended in the 1980s. Unsurprising because that is the default IMF policy. It isn't a bad policy but it only works if it is followed properly, but like a rebellious patient we refuse to follow the prescription and only take the medicine when we feel like and how we feel like.

With devaluation it is supposed to make a country's goods more competitive by decreasing the price of those goods for the consumer.

So say we had Mauritian dollars being devalued from 2:1 to 4:1. Mauritius sells bananas to the US, originally at M$5 (originally US$2.50). With devaluation Mauritian bananas should now cost US$1.25 (which would still be equal to M$5). That way the US consumers get cheaper Mauritian bananas and the Mauritian producers get back the same amount of money in their local currency as before. So everyone wins.

However, what has happened with Jamaica is this - we devalue from say 2:1 to 4:1, BUT the exporters and service providers do NOT decrease their prices in the settlement currency (be it US dollars, British pounds, French francs, German marks, European euros, Japanese yen, etc). So where we might have had Jamaican bananas costing J$5 and US$2.50 before devaluation, after devaluation they still cost US$2.50 (for whatever reason/excuse the merchants may choose, be it inflation or just plain ol' greed). So the merchants in question get back double the amount they used to get in terms of local currency (J$10 instead of J$5), however the price for the consumer hasn't changed so there isn't any incentive for new customers to want Jamaican products or services and we lose out to competition. Have you ever seen the price of hotel rooms in Jamaica or Jamaican products abroad decrease?

Essentially the devaluation exacerbates rather than causes our uncompetitiveness.

[Assasin]

"Most importantly, China and Ireland had leaders who were committed to growth-policies but for different reasons. China's communist leadership since Deng Xiaoping has been committed to making the average Chinese citizen richer so that they will be loyal to the Party and the State (which is almost one and the same where China is concerned). Ireland's leaders just want growth and education because they see it as the right thing to do."

This is key.

We may not have the economies of scale but there is a huge market in the disapora to take advantage of. Look at Jamaica Producers, You think they would die with the EU not taking our banana but what they did is chips with St.Mary chips and others and now their profit is bigger than ever. Ackee is selling for 12 dollar a can in the US. I could go on and on. We have unique products but we don't take advantage and as they say we are a nation of samples.

"We only wait for external factors to be favourable." Even when it is favorable we don't take advantage. Even in best of times the small caribbean countries with even small base, no famous names or status, are doing better than us growth wise.

[ReggaeMike]

"Most importantly, China and Ireland had leaders who were committed to growth-policies but for different reasons. China's communist leadership since Deng Xiaoping has been committed to making the average Chinese citizen richer so that they will be loyal to the Party and the State (which is almost one and the same where China is concerned). Ireland's leaders just want growth and education because they see it as the right thing to do."

This is key.

We may not have the economies of scale but there is a huge market in the disapora to take advantage of.

The diaspora market is too scattered and subject to too many unfavourable regulations (you can't access it separately from the rest of the US, Canadian and UK markets) for it to be the primary focus of our attempt at success. It is rather like FIFA's unending quest to make China and India the next big markets in football - it is a pipe dream that can only be realized with vastly more sums of money than even FIFA has.

Note that many small caribbean countries are doing better than us and do not even have the diaspora market as their primary focus (what is the diaspora market of a place like St. Kitts?). Mauritius as a pointed out early focused on using what they have at hand (workforce, land) to increase their productivity and competitiveness. The diaspora market's potential will only naturally follow upon our competitiveness in providing goods and services to the broader markets where the diaspora is located, not the other way around. So if the average American, Canadian and British tourist finds Jamaica an attractive place in terms of price, the diaspora Jamaicans from those countries will do likewise. If the average American, Canadian or Briton finds our agricultural and industrial and textile products to be attractive then the diaspora Jamaicans will probably find them to be moreso.

Not even Ireland attempted to focus on the diaspora first (and they arguably have even stronger links with their diaspora than we do) - they made sure that Irish products and Irish tourism was generally appealing and attractive to Americans, Canadians, Britons, Europeans, etc and then made use of their diaspora populations in the USA, Canada, the UK and Australia to ensure that their products and tourism became even more widely known and spread.

Whereas some diaspora Jamaicans may put up with some things when they come back home on tourist visits because "it's just how Jamaica is" or put up with some products because "it's from Jamaica", the other 90+% of people living in the same country as them will not because they have no sentimental attachment to Jamaica and are looking out for what is best for themselves.

[Assasin]

the fact is we are living in the info age as mi brethren Jawge say which make it easier. What I am advocating is if you can conquer the disaspora market as Royal Caribbean did, As VP record did then you can go mainstream. Look at Royal caribbean now the biggest supplier to Walmart and other supermarket chain, also now have the contract with the military to supply the US military. They started out concentrating on the diaspora. so many other companies out of Jamaica has been able to carve out a decent living doing this, such as Grace Kennedy, Red Stripe etc. and then they go mainstream.

The first move for a company is survival then to move into niche market that has disposable income and that the disaspora have, then go mainstream. We have some of the world best Coffee which is not even sold on the open market, Cocoa, Ginger, Yam, If the haitians and the mexican can be supplier of fluxy mangoes why we can't export our Julie and East Indians and I bet you the demand wouldn't just there for only Jamaicans.

Again there are many niche market which we fail to capitalise on.