Robert Buddan Robert Buddan
PRODUCTIVITY IN the bauxite sector has increased by 23 per cent since the signing of a Memorandum of Understanding (MoU) between the bauxite companies, trade unions and Government in 1998. This MoU has been the basis for a social partnership in the bauxite sector. Developments since have shown that the social partnership is not merely a promise of mutual advantage, but that co-operation actually works. It is worth repeating what Kevin Lowery, director of corporate communications of Alcoa, said about the company's decision to include Jamaica in the global expansion of Alcoa's operations: "The unbelievable co-operation we have with the Government, as well as the fact that Jamalco has an outstanding workforce, puts us in an unbelievable low-cost position."
Co-operation gives Alcoa the confidence to expand in Jamaica. It could have ignored Jamaica and concentrated on the 37 other countries in which it operates. But it will invest US$690 million, which will boost the economy by $41 billion and allow us to earn an additional $18 billion in gross foreign exchange. Jamaica's refineries will increase production by over 100 per cent (from 1.25 million to 2.65 million tonnes per year). Jamaica could become one of the four leading alumina-producing countries in the world again. Furthermore, this amount of foreign investment will continue to improve Jamaica's share of foreign investments which, the Prime Minister said, increased by 8.6 per cent in 2003.
PROPELLING EXPANSION
Just as investments in the bauxite sector drove the expansion of the Jamaican economy in the 1950s and 1960s, this new investment promises to drive another round of expansion in the present period. This is possible because of strong demand in the world economy. However, the right conditions at home allow Jamaica to benefit from world demand. The social partnership has made those domestic conditions possible. The trade unions and workers in the bauxite-alumina sector have taken the lead in this expansion.
Liberal orthodoxy calls for the right macro-economic conditions for market expansion. However, trade unions and governments are held in great suspicion, regarded as hostile to the market and as non-market institutions. When liberals call for an active civil society they have in mind pro-market civil society organisations, like business organisations, rather than trade unions. When liberals call for a leading role for the private sector, they envision a limited role for the state.
Jamaica's bauxite sector is a good example of how workers and their trade unions, and states and leaders of government can play a positive role in establishing the right macro-economic conditions for market expansion. It was Government's 50 per cent ownership in the Halse Hall plant in Clarendon in the early 1980s that kept that plant open and operational after recession in the world market for bauxite threatened to obliterate the sector.
It is the social partnership since the 1990s that have established the conditions for stabilisation and expansion of that sector since. The confidence built around the co-operation between management, unions and Government, and the re-negotiation of the bauxite levy, have lowered costs and enhanced efficiency. The present expansion is the largest investment boom in the industry since the heyday of the 1950s and 1960s. The Jamaica Confederation of
Trade Unions (JCTU) has made the most positive contribution to economic growth since the start of the year. In early January, Danny Roberts, vice-president of the JCTU and the NWU, declared the new message of the confederation: "The confederation is firmly of the view that the way out for the country does not lie in entering a borrowing agreement with the IMF, but in a summoning of the collective wills of the social partners and other stakeholders in civil society, to place the common good of the country above and beyond narrow sectoral and partisan interests."
Roberts went on to say, "The confederation will continue to promote social dialogue and tripartite discussions as valuable and democratic means of addressing social concerns (and) building consensus and (to) examine a wide range of economic and social issues." Its aim is to achieve "greater productivity, efficiency and competitiveness as the means through which we must earn our way out of this untenable economic situation." This does not sound like an anti-market institution, as the free marketers would have us believe it is.
At the time, dialogue towards a social contract was already in progress. Trade union leaders from the NWU, the BITU and the UAWU, among others, were already on board in principle. The unions have even more progressive ideas. They want labour market reforms that provide adequate social protection and improved workplace governance. JLP senator and BITU vice president, Dwight Nelson, explained that the unions want greater transparency at the workplace to reduce the distance between the managers who own and control companies and the workers who provide creative skills.
These are some of the new and not-so-new ideas that have been accepted in the European Union. The enlargement of market space in Europe has proceeded within the framework of Europe's social democratic tradition, one in which unions and states have played a strong role in building and reforming welfare states. The European Social Charter calls for new corporate governance that places more emphasis on social protection and workplace democracy. However, European companies do not have any obligation to practice social responsibility among workers in countries outside of Europe. It is important, therefore, for countries like Jamaica to develop their own framework of corporate social responsibility, under a social partnership.
POLITICAL MATURITY
Jamaica's trade union movement has shown good business sense and political maturity too. An American business scholar wrote in 2000 that the region's unions needed to abandon old adversarial, anti-management attitudes and take up an agenda of productivity and efficiency. The JCTU has done this. It is now left for businesses to abandon their old adversarial anti-worker attitudes and take up a new agenda of good corporate governance and social responsibility.
Trevor Munroe said that the main priority of the opposition must be to avoid using the economic and social difficulties to promote partisan gain and to make the national interest the priority. This is what the member unions of the JCTU have done. The unions that are, or were, affiliated with the PNP, JLP and Workers Party of Jamaica (WPJ) have come together to establish an agenda for a broad-based social contract.
The unions have moved ahead of the private sector in agreeing to a social partnership agenda of governance and have moved ahead of the political parties in this regard as well. The JLP has refused to endorse the social contract and even the plan of the PSOJ's Partnership for Progress to reduce the national debt. It continues to insist that the Government enters a structural adjustment agreement with the IMF even as the JCTU and its cross-party affiliates reject this.
The ability of Government and unions to negotiate a social contract in the public sector and to establish objectives to address fiscal problems mean that government can go to the IMF to establish a new confidence-building monitoring programme. If this is achieved, and signs are favourable that it will be, it should restore Jamaica's position in international credit markets. This is what co-operation and political maturity can do.
PARTNERSHIP ECONOMY
The gains of social partnership can now lay the basis for a new period of strong growth. Carl Stone's surveys had shown that Jamaicans regarded the parties, the unions and the church as the organisations that had made the greatest contributions to Jamaica's development. They have also had reasons to be severely critical of these institutions. The opportunity now exists for them to win back support from the public. Government and opposition reached a landmark agreement last year to increase the education budget over the next five years. The unions have reached a landmark agreement on public sector employment. The private sector has organised a Partnership for Progress.
We must now support Beverly Lopez of the PSOJ as she tries to find ways for the private sector to contribute to the expansion of the economy expected from the new bauxite investment. We must support businessman Richard Byles on his insistence that a social contract is necessary for the business community. We must back Trevor Munroe's call for the private sector to recognise that it too must be willing to give up something. We must support Prime Minister Patterson's call for small and medium-size businesses to take advantage of new opportunities and go to the Government agencies that can help them. After all, the same partnership that calls for some sacrifice from all sectors must ensure that all sectors benefit from growth as well.
Robert Buddan lectures in the Department of Government, UWI, Mona.
E-mail: Robert.Buddan@
uwimona.edu.jm.
