Delroy Chuck
"THE COUNTRY'S current economic model," Michael Fairbanks believes, "is a systematic approach to creating poverty." This statement is an apt description of our country's economic path, as it sinks into deeper poverty, and prosperity is like gold at the end of the rainbow. Keith Collister's article, 'Jamaica is failing itself' in Friday's Financial Gleaner is worth reading. Mr. Fairbanks has correctly identified some of Jamaica's underlying problems that keep it in poverty and deny prosperity to the majority of our people.
Michael Fairbanks, like many others, is aware that prosperity is a choice and any nation can achieve higher standards of living if only it chooses the right economic path. "Prosperity," he notes in his excellent article - 'Changing the Mind of a Nation: How Values Shape Human Progress' - "helps create space in people's hearts and minds so that they may develop a healthy emotional and spiritual life, according to their preferences, unfettered by the everyday concern of the material they require to survive." At the same time, Fairbanks observes: "Poverty destroys aspirations, hope, and happiness."
PRESENT MODEL A FARCE
I am happy that someone, like Fairbanks, with the expertise and experience of developing nations, has diagnosed Jamaica's economic model as a failure. In these columns, I have long contended that the present model is destined to impoverish the vast majority of Jamaicans, even while it further enriches the few who are already wealthy. My abiding interest is for Jamaica to become productive and wealthy, which it can, but it needs alternative economic policies and prescriptions.
As more and more Jamaicans find it increasingly difficult to make ends meet, it is now obvious that the present model is a farce. An economic model that depends on increasing national indebtedness for budgetary support and consumption is bound to fail. In essence, the overall economic picture is one of stagnation and regression.
Jamaica did not have to choose this downward slide. I remember well how Minister of Finance, Dr. Omar Davies, in his annual budget contributions, urged everyone to buy into his economic model. I disagreed because I knew it couldn't work and would only create a mountain of debt, which I warned in these columns would be the outcome. Now, with a national indebtedness of over $800 billion and climbing, the economic model's main preoccu-pation is to pay debt.
Is it any wonder that the Prime Minister is at the United Nations lamenting how Third World countries are sacrificing their economic viability by transferring more money to pay debt than they are getting in aid? Where was the foresight to anticipate that debt repayment would threaten economic viability?
CREATING AN ENVIRONMENT FOR POVERTY
The economic model that Dr. Davies pursued sought to defend the dollar by the use of monetary tools, mainly high interest rate, which savaged commerce and economic development. The effect was easily foreseeable. Factories, businesses, farms and commercial entities downsized and capsized, which was the inevitable effect of the monetary policies of the nineties. Tens of thousand of jobs were lost and created an environment of poverty for most rural and inner-city communities.
To maintain the high interest rate policies meant government had to borrow, which it did and the country is now fully enmeshed in a debt trap from which there is no foreseeable escape. Yes, debt has to be repaid, but if it were borrowed to create productive enterprises the payments could easily have been made. Thus, with more revenue going to debt repayment, it means less money becomes available for social and developmental purposes.
The hospitals, schools, roads, fire service, and virtually every area of national life are starved of the needed budgetary resources to properly and effectively deliver a decent quality of service. Is it not obvious, as Michael Fairbanks has diagnosed, that we are creating poverty, increasing hardships and sinking Jamaica into deeper economic chaos?
The alternative economic model must be a total reversal of the present one, which would more likely steer Jamaica towards prosperity instead of increasing poverty. A new economic model must shift the emphasis from the perennial paper chase to productive ventures. To create prosperity, we need huge and small investments, which demand the enlightened encouragement of the entrepreneurial spirit and the economic environment to attract local and foreign investors to put money into productive enterprises. It is a sound economic model, fiscal constraints and astute monetary emphasis that will determine if entrepreneurs risk their money wisely in productive enterprises, job-creating businesses and nation-building.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by email at delchuck@hotmail.com.
