A man of his word: Mayer Matalon, 1922 - 2012 By Keith Colli

[Sir X]

A man of his word: Mayer Matalon, 1922 - 2012
By Keith Collister
Wednesday, February 08, 2012

Mayer Matalon was well known for his success as a private businessman. With his brothers, Zackie, Aaron, Moses, Eli, Owen, and Vernon, he changed the face of Jamaican business through a massive expansion of the ICD group and its housing company, WIHCON, inside and outside Jamaica, in the 1960s through to the 1990s. The mass production of housing units that the brothers pioneered helped thousands of Jamaicans to afford their own homes.

What is less well known, are his decades of public service, much of it behind the scenes, beginning as an adviser to prime minister Norman Manley in the 1950s, right up to the last decade with Omar Davies, the former minister of finance.



Pall-bearers carrying Mayer Matalon on his final journey on Monday.
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In his funeral tribute, Davies broke Matalon's public service down into four time periods, reflecting the personal experience he and his brother, Carlton Davies, had. Noting that Carlton was far better placed to talk about Matalon's public service contribution in the 1970s, Davies reminded his large audience that businessman had headed the team which negotiated to increase the country's take from the bauxite and alumina sector. In the foreword to his brother's book detailing the bauxite levy negotiations Jamaica in the World Aluminium Industry - Volume II - 1974 to 1988, Matalon is described as "the financial wizard handling numbers with an artistry that I had met in no one before or since".

This blow-by-blow account of the negotiations with the major bauxite companies is important not just as a historical record, but as an enormously detailed case study in public policy and business, in effect, it is a negotiating manual for a small developing country in its dealings with powerful multinationals and large states. In the latter case, history does not just rhyme but repeats. The issues facing Matalon as head of the negotiating team (and his partner Patrick Rousseau), namely the sanctity of contract (or how they can be changed), and particularly the ability to pay of an industry set against its need for competitiveness in an international marketplace, have echoes in the present day. Indeed, it could be argued that Jamaica now needs a similar high-level negotiating team, aided by real world private sector experience, to assist in at least six current or planned negotiations, starting with the issues facing Mining, Energy and ICT Minister Phillip Paulwell. Davies puts it best when he says: "The work of the team did much to increase national self-confidence, by demonstrating that a group of Jamaicans was capable of matching negotiating skills with high-priced financial and legal experts assembled by the companies".

Just as relevant, according to Davies, was Matalon's role in helping then PNP leader Michael Manley to reassess the policies and programmes of the 1970s after the party's massive defeat in 1980. Importantly, Manley sought Matalon's view, not just because they were personal friends, or because of his fine business mind, but "more so because he felt that he would present to him an honest appraisal free from the window dressing which often characterises views being presented by a political leader." As Davies notes, "rather than simply seeking to defend the PNP's record in the 1970s, Manley genuinely sought to identify what went wrong and thereby prepare the party to avoid repeating the same mistakes in its next turn at government."

In the period 1989 to 1992, Davies reveals, Manley announced the establishment of a Council of Economic Advisors, chaired by the late Honourable Arthur Brown, with the other members including Owen Jefferson, the late Barclay Ewart, and himself. The council had many discussions concerning the liberalisation of the foreign exchange system, which Davies correctly describes as "the most significant economic decision taken in Jamaica's 50-year history as an independent country".

Finally, Davies covers the period of his own 14-year period as minister of finance, starting in 1993, when he met with Matalon on a regular basis. While noting that he did not have time to discuss all the issues, where he sought and received advice from Matalon, Davies shares two very important and still very relevant examples with the mourners.

Matalon was one of the first people to point out to Davies the practice of "ever greening" of bad loans within some financial groups during Jamaica's financial crisis, where a bad loan was moved around within a group to evade the probing eyes of the Bank of Jamaica.

Davies then refers to a Tuesday afternoon in December 2003 when the Government's revenues for the fiscal year fell dramatically below projections, making it challenging for it to meet its pay obligations that Christmas. As he put it, domestic creditors, being aware of the crisis, "had shown no inclination to acquire new [Government] paper." Late that evening, his then financial secretary, Shirley Tyndall, suggested: "Why don't you call Mayer". After reviewing the situation next morning, Matalon arranged an appointment for him with the "chairman of a major North American bank" on Friday after he had been, in Matalon's own words, "softened up". The US$100 million loan from the Bank of Nova Scotia, authorised by the chairman against the advice of his own deputies, was a critical part of Jamaica's financial turnaround in 2004. Davies observes that he cannot think of any other person at that stage, with the international contacts and influence to facilitate a meeting with just one day's notice.

Finally, the words of his son, Joseph Matalon, describing his father as his closest friend with whom he worked for 25 years, are well worth noting. The two most important principles taught to him by his father were "a man's word is his bond", and the need to deal "firmly on principle no matter the consequences".


Read more: http://www.jamaicaobserver.com/busin...#ixzz1ln8baeJm

[Sir X]

The unenviable task facing Dr Peter Phillips
Wednesday, February 08, 2012

Most of us now know that a stable macroeconomic policy, sustained over the medium term, is an essential component of an economic environment conducive to investment and growth.

The value of stability in economic policy is that it provides a predictable economic environment allowing for private sector planning of investment and production. Stable macroeconomic policies also contribute to economic growth by reducing uncertainty and risk in the business environment and can reduce vulnerability to external contagion by removing destabilising expectations.

Moreover, stable macroeconomic policy means that policy measures and instruments such as fiscal policy, monetary policy and exchange rate policy must be applied in a consistent manner and be complemented by institutions that facilitate market-driven growth.

This does not imply an immutable policy, but a regime where policy change is orderly so that economic actors, be they consumers or producers, understand the market forces and underlying rationale for the policy changes.
A general society-wide consensus on the goals, direction and pace is the foundation on which stable macroeconomic policy is based.

Fortunately, both major political parties seem to agree on the goals and direction of economic policy. Where the Opposition Jamaica Labour Party and the ruling People's National Party differ is on the pace and sequencing of policy actions. This is important because Jamaica's history reveals a direct relationship between economic growth and the public perception of differences of economic philosophies between the governing and the opposition parties.

The extent to which macroeconomic policy can be stable depends on exogenous factors, eg hurricanes and economic events such as escalation in oil prices. Not much can be done to prevent the adverse impact of external forces in a small, highly open developing economy such as Jamaica.

Another important external factor is the type and extent of support
from the international financial institutions (IFIs), in particular, the International Monetary Fund (IMF), World Bank and the Inter-American Development Bank.

This is a particularly pertinent factor at this time. The IFIs generously support the economic reform of the Bruce Golding Administration which imploded without finishing the course.

The Portia Simpson Miller Administration is committed to the same broad economic policy direction, but has inherited the same economic mess evident in the budget deficit and the national debt. The result is a hiatus, though Dr Peter Phillips is moving, with alacrity we are pleased to see, to maintain the flow of external funding.

The continued stability of macroeconomic policy depends on the IFIs maintaining a steady and consistent presence and continuation of financing. More than this, the IFIs must move quickly, and with flexibility, to help the new Government, as they helped the previous one, to maintain stable macroeconomic policy.

To achieve this objective, the IFIs must be active in providing resources in the next three to six months. Central to accomplishing this goal is the conclusion of an IMF agreement before the tabling of the 2012/13 budget in April/May of this year.

We believe that Dr Phillips has a solid understanding of this imperative.


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[Don1]

The value of Political Connections: Useful (If yuh nuh mek Tician grant yuh favor)

The impact of Good Schooling: Priceless