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Putting the budget in perspective
Henley Morgan
Thursday, May 10, 2007
Which Jamaican parent, having a gifted child and looking at the meagre resources available for education and other aspects of the child's development, does not feel discouraged to the point of giving up? We have each learned that for children to achieve their potential, it is necessary to look beyond the resources coming into our hands weekly or monthly through a pay cheque. We must have a vision, set goals, identify priorities and alternative strategies, and doggedly pursue actions that will bring success. That's planning with more than a measure of faith included.
I tend to look at a budget, particularly an austerity budget, as a vice; something that although necessary can imprison the mind and keep one from achieving one's goal. Even if everyone does not share this point of view, we should at least all agree that there are some purposes to which a budget is not well suited. One of these is predicting and planning for the future. Financial measures best tell the story of past, not future events.
Historically, the management system for business has been financial. In the 1920s the budgeting process evolved into a sort of high science for managing costs and cash flows. It took decades for corporate leaders to recognise that budgets were not just being used to keep score but to dictate and limit their every action. Often trapped in the bad choices and experiences of the past, budgets are useful until they become an end in themselves.
Contrast this thinking with what obtains in Jamaica where almost every discussion about the economy begins and ends with the budget. Such preoccupation disempowers the nation for we always end at the same place; trying to balance income and expenditure, but without advancing. Would it not be better if in addition to the numbers there were a clear plan pointing to the future and showing us our options for making it a reality?
Jamaica has a problem - a big problem. Until someone can convince me otherwise, I will maintain that the country is without a comprehensive and detailed vision or a plan to guide our actions in a deliberately chosen direction. In the absence of a vision or a plan, the budget has become the key instrument of planning.
Breaking free from the budget vice is achievable in part by transitioning to strategic planning. Simply put, this process requires one to begin with a detailed and comprehensive vision of what the individual, company or country hopes to achieve in the future; then identifying strategies and actions to achieve the stated goals. Obviously, one must give consideration to the resources that will be needed, some of which will be financial; and the measures that will be used to monitor progress, some of which will also be financial. But with this approach, the budget is made subservient to future aspirations and not the other way around.
The Owen Arthur-led government in tiny Barbados has adopted a strategic approach to planning for the country's future. Dr Ralph Gonsalves, prime minister of St Vincent and the Grenadines, holds public fora around the country to elicit participation of citizens in setting some priorities for the budget. The government in Port of Spain, Trinidad, has for a long time adopted a corporate business approach to planning the economy.
Jamaica used to be ahead of its Caribbean sister nations in how we planned the business of the country. In the 1950s Norman Manley ran an election campaign in which he presented himself as "the man with the plan". Over-reacting to the setbacks resulting from the socialist posturing of the 1970s, successive PNP governments abandoned central planning which some see as the great evil of socialist regimes. The Planning Institute of Jamaica is just now returning to serious macro planning, which will give the country a clear development path to at least the year 2030. For this we should be thankful.
I regularly watch and listen to the State of the Union address delivered by the president of the United States. It's the best example of how a country's chief executive officer visualises the future and signals to the different players the direction of economic and social policy. Who can forget the declaration by the late President JF Kennedy when in one of these addresses he said, "Our mission is to land a man on the moon and return him safely to earth by the end of this decade". Our local throne speech at the opening of Parliament is a poor parallel. It smacks more of wishful thinking, fanciful ideas and partisan policies than it does prudent thought about the future prospects for the nation's advancement.
Budgets will hurt far less if the sacrifices they inevitably call for are accompanied by a sense that there is a light at the end of the tunnel. Only by looking to the future and planning for it can one get the motivation to go on. To quote the management author Joel Barker, "Countries with vision are powerfully enabled. Countries without vision are at risk."
- hmorgan@cwjamaica.com
Henley Morgan
Thursday, May 10, 2007
Which Jamaican parent, having a gifted child and looking at the meagre resources available for education and other aspects of the child's development, does not feel discouraged to the point of giving up? We have each learned that for children to achieve their potential, it is necessary to look beyond the resources coming into our hands weekly or monthly through a pay cheque. We must have a vision, set goals, identify priorities and alternative strategies, and doggedly pursue actions that will bring success. That's planning with more than a measure of faith included.
I tend to look at a budget, particularly an austerity budget, as a vice; something that although necessary can imprison the mind and keep one from achieving one's goal. Even if everyone does not share this point of view, we should at least all agree that there are some purposes to which a budget is not well suited. One of these is predicting and planning for the future. Financial measures best tell the story of past, not future events.
Historically, the management system for business has been financial. In the 1920s the budgeting process evolved into a sort of high science for managing costs and cash flows. It took decades for corporate leaders to recognise that budgets were not just being used to keep score but to dictate and limit their every action. Often trapped in the bad choices and experiences of the past, budgets are useful until they become an end in themselves.
Contrast this thinking with what obtains in Jamaica where almost every discussion about the economy begins and ends with the budget. Such preoccupation disempowers the nation for we always end at the same place; trying to balance income and expenditure, but without advancing. Would it not be better if in addition to the numbers there were a clear plan pointing to the future and showing us our options for making it a reality?
Jamaica has a problem - a big problem. Until someone can convince me otherwise, I will maintain that the country is without a comprehensive and detailed vision or a plan to guide our actions in a deliberately chosen direction. In the absence of a vision or a plan, the budget has become the key instrument of planning.
Breaking free from the budget vice is achievable in part by transitioning to strategic planning. Simply put, this process requires one to begin with a detailed and comprehensive vision of what the individual, company or country hopes to achieve in the future; then identifying strategies and actions to achieve the stated goals. Obviously, one must give consideration to the resources that will be needed, some of which will be financial; and the measures that will be used to monitor progress, some of which will also be financial. But with this approach, the budget is made subservient to future aspirations and not the other way around.
The Owen Arthur-led government in tiny Barbados has adopted a strategic approach to planning for the country's future. Dr Ralph Gonsalves, prime minister of St Vincent and the Grenadines, holds public fora around the country to elicit participation of citizens in setting some priorities for the budget. The government in Port of Spain, Trinidad, has for a long time adopted a corporate business approach to planning the economy.
Jamaica used to be ahead of its Caribbean sister nations in how we planned the business of the country. In the 1950s Norman Manley ran an election campaign in which he presented himself as "the man with the plan". Over-reacting to the setbacks resulting from the socialist posturing of the 1970s, successive PNP governments abandoned central planning which some see as the great evil of socialist regimes. The Planning Institute of Jamaica is just now returning to serious macro planning, which will give the country a clear development path to at least the year 2030. For this we should be thankful.
I regularly watch and listen to the State of the Union address delivered by the president of the United States. It's the best example of how a country's chief executive officer visualises the future and signals to the different players the direction of economic and social policy. Who can forget the declaration by the late President JF Kennedy when in one of these addresses he said, "Our mission is to land a man on the moon and return him safely to earth by the end of this decade". Our local throne speech at the opening of Parliament is a poor parallel. It smacks more of wishful thinking, fanciful ideas and partisan policies than it does prudent thought about the future prospects for the nation's advancement.
Budgets will hurt far less if the sacrifices they inevitably call for are accompanied by a sense that there is a light at the end of the tunnel. Only by looking to the future and planning for it can one get the motivation to go on. To quote the management author Joel Barker, "Countries with vision are powerfully enabled. Countries without vision are at risk."
- hmorgan@cwjamaica.com
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