Ian Boyne, Contributor

Prime Minister Bruce Golding and his senior ministers are today meeting with private sector high flyers and top guns at the upscale Ritz-Carlton hotel in Montego Bay in what has been dubbed a national planning summit. Will it be more symbolic than significant?

Presented under the theme 'Jamaica Tomorrow', the summit, which will also include non-governmental organisations and international representation, is expected to chart a course for Jamaica's sustainable future, following on the heels of Wednesday's launch of the 2030 Vision which is supposed to see Jamaica's attaining developed country status by that year. Ambitious thinking, ambitious forecasting. Whether anything substantial will come out of these two initiatives will be dependent on whether certain problematic issues are dealt with.

Good signal

First, it is important to state that the fact that this summit with key private sector leadership is taking place so shortly after the new Government has taken office is commendable. I believe it sends a good signal that very early, the Government is determined to get the key players in the economy on board. I hope the voice of the trade unions will be represented at the summit too.

No Government can move this country forward without private sector support and emotional capital. Michael Manley learned that the hard way in the 1970s and Portia Simpson Miller's alienation from significant elements in the private sector is a major factor why she is not in Government now. This Government had private sector endorsement even before it was elected - if you understand what I mean.

It is crucial, however, that the Government has more than just support. It must have a consensus with the private sector as to what is needed in moving the country towards sustainable development. An academic who has done some work in the area of sustainable development is at the summit and, therefore, the country's leaders will benefit from international expertise and will not be mired in the usual parochialism. I am happy when hard-nosed, pragmatic business people get a chance to sit down with academics to gain a broader perspective. I hope there will not only be transmission of information, but a transference of meaning in Montego Bay today. The Ritzy environment should help!

One of the things the private sector will have to be made to understand is that while it does have a central role to play in economic development and while it is the engine of growth, the State is more than just a passenger.

Before the election, I had written several times that the Jamaica Labour Party's thinking on economic development was more interventionist and state developmentalist and, therefore, closer to mine than the neo-liberal, Washington Consensus model favoured by some. The JLP's manifesto shows clearly that the party believes that the State has some definite things to do and should not just take a minimalist role.

I disagree with the Director General of the Planning Institute of Jamaica Dr. Wesley Hughes, a bright man, who said in his presentation at the 2030 launch on Wednesday that "the state should merely play the role of facilitator by creating the enabling environment". This was the thinking which mitigated the success of his former boss, Dr. Omar Davies, who did a generally good job of macroeconomic management. Omar did a good job in steering the economic ship in the right direction, doing some critically necessary things and being generally fiscally responsible and prudent. But more state-directed action could have enhanced economic policy.

I recommend to Wesley Hughes and others who think like him to read two books which have been published in the last two months. Dani Rodrik's One Economics, Many Recipes: Globalisation, Institutions and Economic Growth, and Erik Reinert's How Rich Countries Got Rich ... and Why Poor Counties Stay Poor. Rodrik teaches at Harvard and is one of the most reputable political economists writing today and Reinert, who studied at Harvard, is one of the leading development economists today.

Drawing on a wealth of data, Rodrik shows that the countries, which have been models of economic development in East Asia - the only region to have consistently done well since the 1960s - have not followed the neo-liberal, Washington Consensus model being pushed by the Bretton Woods institutions.

Says Rodrik: "South Korea's and Taiwan's growth policies, to take two important illustrations, exhibit significant departures from the mainstream consensus. Neither country undertook significant deregulation or liberalisation of its trade and financial systems until well into the 1980s.

Far from privatising, they both relied heavily on public enterprises. And both countries developed an extensive set of industrial policies that took the form of direct credit, trade protection, export subsidisation, tax incentives and other non-uniform interventions".

The East Asian states were developmentalist, not minimalist, Dr. Hughes. Sure, much of what they practised would be now proscribed or taboo in this WTO-governed world, so our options are more restricted. Granted, the ladder has been 'kicked away' in that famous phrase from another well-known development economist. Yet, it must be acknowledged that, "Countries such as Mexico, Argentina, Brazil, Colombia and Bolivia and Peru did more liberalisation, deregulation and privatisation in the course of a few years than East Asian countries did in four decades," as Rodrik says. Yet, their growth rates have been anaemic and the 1980s has been called "the Lost Decade" for Latin America. If the private sector and the PricewaterhouseCoopers people gathered at the posh Ritz hotel are merely there to rehash a set of inadequate policy prescriptions, then we would be planning to fail.

What has worked

Let us look at what has worked, however much conventional wisdom might have turned against it. Rodrik mentions that South Korea and Taiwan, for example, "Rejected the standard advice that they take an arm's length approach to their enterprises and actively sought to coordinate private investments in targeted areas."

One of the major inhibitors of innovation and productivity in Jamaica is the lack of financing for new projects from people who have an abundance of ideas but no capital. We cannot simply wait on the market - the traditional banks - to come to the aid of these persons. The visible hand of the state has to intervene.

I was happy to see in the JLP manifesto that the party pledged that if elected it would "provide the appropriate fiscal and regulatory mechanisms to facilitate the growth of venture capital financing to encourage start-ups and enable the expansion of existing businesses hobbled by lack of capital and high cost of debt financing". The Government must live up to that commitment. It must live up to the commitment to "provide appropriate incentive and access to special concessionary financing to small and medium-size enterprises". It must, as promised, "establish enterprise zones in major urban centres with appropriate incentives and shared facilities" to facilitate start-ups in agro-processing and other manufacturing enterprises.

There state must be activist, developmentalist and interventionist. Not statist or even socialist. Says Reinert in his book: "Impressive growth in China, India and South Korea is being held up as an example of the success of globalisation. The question that is not being asked, however, is: Do or did China, India and South Korea take the recommended medicine? The answer is clearly no. Countries that have not taken the recommended medicine are constantly being used as proof of the excellence of globalisation." Which is not an argument against globalisation, but a cautionary note for the fundamentalists of globalisation and liberalisation. One hopes that is not the sermon being given at the Ritz this Sunday morning!

The country must also seriously resist the myopic inflation-targeting approach to economic policy being pushed by neo-liberals. Inflation targeting narrowly focuses on inflation to the detriment of employment expansion and growth. The empirical evidence has been that inflation targeting militates against the creation of "jobs, jobs, jobs", as Mr. Golding has put it and, therefore, there has to be some rethinking in the Ministry of Finance.

We must contain inflation, and Omar Davies must be commended for his achievements in that area, with his low inflation model, but there was not a corresponding concern with employment targeting. The summit today has to come away with some concrete recommendations for employment expansion, and that cannot come largely through capital-intensive foreign investment. The World Investment Report demonstrates every year that foreign direct investments (FDIs) do not create huge numbers of jobs. That has to come from SMEs and a private sector that is empowered to innovate and expand.

The issue of social capital will be critical. If this country does not learn to build alliances, broker compromises, resolve conflicts, forge partnerships across classes and ethnic divides, then forget about a prosperous Jamaica tomorrow. If our people don't develop a love affair with excellence; with First-World performance; with giving the very best, then all the talk about Brand Jamaica will be just myth-making. Lifelong learning must be a part of our culture.

'Ratings'

If we don't find a way to build a culture where status and 'ratings' are given to people who produce rather than people who consume; if we don't deincentivise the 'bling-bling' culture - which is rampant among all the classes - then we can forget about developed country status and look to competing with Haiti and Guyana.

If we want to create a Jamaica where people will want to live, work and raise their families, then our legendary corruption, bigotry, intolerance and fractiousness have to go. We have to stop making excuses for crudeness and vulgarity.

Bruce Golding has been making the right moves and saying the right words. I am convinced Industry and Investment Minister Karl Samuda wants to make a difference. They will simply have to remain open-minded and consultative - not being hostage to any sectional interests - if they would turn their vision into reality.

Ian Boyne is a veteran journalist who may be reached at ianboyne1@yahoo.com.