25 May 2008

Political & Economic Illiteracy

Political & Economic Illiteracy
John Maxwell
What do Hillary Clinton, the US Republican party and Jamaican political and societal leadership have in common?
All have decided over the last twenty years or so that thinking is for peasants and that slogans are the stuff of political genius.
Fifty two years ago, when I was an assistant to Robert Lightbourne, then head of the Industrial Development Corporation,(IDC) – later JAMPRO and now Jamaica Trade and Invest – I was writing the lyrics to the songs of development now sung by Lightbourne’s political grandchildren, the latest dub versions of Globalisation’s greatest hits.
Over four of the last five decades we have single-mindedly pursued the discredited idea that Foreign Direct Investment means Deliverance from poverty, while domestic production has dropped, unemployment has risen, real wages have fallen and poverty has metastasised, external debt has almost bankrupted us and crime threatens to strangle and paralyse the entire society.
In the fifties, driven by the piteous entreaties of people like the Ashenheims, the Jamaican government passed laws to attract foreign investment: the Industrial Incentives Act and the International Business Companies Act among them Our job at the IDC was to use these as tools to sell Jamaica as the place to invest. The real attraction, though no one ever mentioned it, was that our wages were lower than Puerto Rico’s whose programme of investor attraction we had in fact copied. Carroll daCosta, David de Pass, the late Henry Miller and I among others, enticed people to invest in the Morant Bay Button factory, the Lucea Knitting Mill and the brassiere factory in Port Maria. Manley, wanting to spread employment outside Kingston, insisted on distributing the new factories far and wide.
What was more important, however, were the incentives and backing given to Jamaican manufacturers, taken up by people like the Matalons, Hannas and others who were soon producing shoes, clothing, metal windows, paint and a host of other industrial productions to serve the Jamaican and the Caribbean markets.
At the same time Manley produced legislation such as the Facilities for Titles Law, which enabled small farmers to get finance; established the Small Business Loan Board the Agricultural Development Bank and strengthened the Peoples Cooperative Banks to inject capital into the food-producing base of the society.
Production took off. The advance was led by small farmers.
Investment in agriculture and agricultural production grew rapidly, climaxing two years after Manley was deposed and falling ever since. There was a brief interregnum in the seventies, when government initiatives such as the Agricultural Marketing Corporation and the Landlease Act began to restore domestic production until derailed by the anti-Communist propaganda of the late seventies.
In the 1980s the new government – not satisfied with the destruction it had wrought in Opposition, dismantled LandLease, disbanded the reforestation programmes, shut down the Emergency Employment programme, sold off the government’s experimental agricultural stations, destroyed the agricultural extension services, closed the vocational training institutes and destroyed the Farm School (Jamaica School of Agriculture), turning its campus over to the police.
When I read the self-serving epistles of Edward Seaga in the Sunday Gleaner I laugh. His version of history should be published as a comic book. It is ironic that UTECH, the brainchild of Norman Manley, has managed to celebrate its half-century without mentioning its founder’s name. And Mr Seaga is now that University’s pro-Vice Chancellor. Savage irony.
Carrying Capacity
One of the people at the IDC when I was there was a big, rawboned American named David(?) Lukens. He was lent to Jamaica by the International Cooperation Administration, now known as USAID.
They also gave us some books, which Mr Lukens tried to get us to read, one of them being a blue covered stenciled volume called if I remember, A Manual of Industrial Development. Mr Lukens and that book were two of the best things the Americans have ever done for us. Tragically, both are now forgotten.
The book in simple, direct language, instructed people how to design what would now be called, sustainable development projects. It explained what real cost benefit analysis was and how to decide whether any project, no matter how well funded, would be good for the country and its people. It was a manual for self reliance and people-directed development, dealing with such matters as carrying capacity and whether an industry was likely to serve the long- term interest of the country or would,like bauxite, help to pauperise us.
When I returned from my five year exile in Britain in 1971 I picked up somewhere another blue covered book, by a white Jamaican called Ted Tatham, who related how peasant farmers on 3-acre plots of restored land leased from Alcan, had managed to out-produce ALCAN, even in dairy production using Dr Lecky’s Jamaica Hope cows fed on grass. I gave the pamphlet to Michael Manley who called Tatham with a day or two and, within a short time, they had designed Project Land Lease and Manley had persuaded Tatham to run it. That too was shut down in the 80s to be replaced effectively with food stamps, liberalisation, deregulation, privatisation, retrenchment and a new army of entrepreneurs selling safety matches, shoe polish and doughnuts on the roadsides. Free education was no longer a right.
The assaults on small farmers, on education on the civil service and on institutions such as the Jamaica Agricultural Society and the Jamaica Social Welfare Commission effectively dissolved much of the glue of the civil society which had been laboriously inventing itself since 1865.
Simultaneously thousands had been driven from their homes and scattered on remote hillsides and left to fend for themselves. The communities had ben abandoned by the state and its agents and since human nature abhors a vacuum of authority it didn’t require politicians to form new self defence groups aka gangs, in defiance of the civil power.
It is therefore extremely poignant to read of the great expectation of the Press and other learned authorities who believe that a new Commissioner of Police and a new Minister of Justice can “curb” or “control” crime – allowing the private sector to fulfill its long heralded pipe-dream as the ‘Engine of Development’.
Inequality is Injustice
Common sense tells us and even the World Bank agrees, that poverty and inequality sabotage development: Inequality in Latin America & the Caribbean: Breaking with History? is the World Bank's annual research study on Latin America and Caribbean for 2003.
“The richest one-tenth of the population of Latin America and the Caribbean earn 48 percent of total income, while the poorest tenth earn only 1.6 percent…”
“This inequality slows the pace of poverty reduction, and undermines the development process itself."
The report singles out race and ethnicity as enduring determinants of one's opportunities and welfare in Latin America. Indigenous and Afro-descended people are "at a considerable disadvantage with respect to whites," the report says
“…patterns of influence remain highly unequal, with traditions of clientelism and patronage often continuing despite national and local elections.
“In a global economy, where "human capital" is critical to competitiveness, inequalities which result in a failure to develop people's skills and knowledge to optimum levels, among other factors, can actually slow down the rate of economic growth, and weaken the poverty-reducing “impact of the growth that does occur.”
So saith the World Bank. Selah.
The Jamaican society is rooted in the inequity institutionalised after slavery by the total disinheritance of the former slaves. They were thrown off the plantations which they had spent 300 years developing, landless and liable to be prosecuted if found wandering abroad without lawful excuse. It was only in the 1970s that the Vagrancy Law, the Masters and Servants Law and the Unlawful Possession of Property Law were abolished – despite the anguished howls of “Communism” from the ruling classes.
The monopoly of land ownership by the rich hobbles both rich and poor. It pauperises the poor and locks the rich into gated mentalities within which they cannot be productive and are logically almost forced to be hostile to the public interest.
Norman Manley offered them not one but two solutions fifty years ago. One was the Land Bonds Law which would have allowed the rich to transform their property into tradable securities; the other was the Land Development Duty Law, which would have facilitated state investment in infrastructure by guaranteeing that there would be some return to the public purse from such investments. Both were indignantly rejected by the private sector who insisted that the Independence constitution should force the government to pay cash if it wanted to acquire property in the public interest. It is, as a constitutional provision, unique in the world. As a result, the private sector are increasingly confined to the dangerous prison of speculation and the temptations of dual citizenship. And the only way to get rid of agricultural property is to sell it for construction and desertification, to take it out of food production – as at Caymanas.
The Jamaican elite mostly have one foot (and their wallets) outside of Jamaica. They feel an instinctive motivation to protect foreign private invasive interests against the Jamaican public interest and to deny, as vehemently as possible, any cultural knowledge, connection or duty to their native land.
The elite are split between those the communists would call the ‘national bourgeoisie’ – mostly loyal to Jamaica and relishing Jamaican food and music – and a substantial cohort who sponsor dancehall, fast food and noise and are ready to take flight at the slightest hint of change.
Haiti and Zimbabwe, please welcome us to the club.
Copyright© 2008 John Maxwell

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