Douglas Orane, the chairman and chief executive officer of GraceKennedy, the Jamaican conglomerate, is to be commended for edging back onto the national agenda the vexed matter of the country's stagnant, if not declining productivity.
He should be helped in keeping it there. For the issues addressed by Mr Orane, during an address as part of National Productivity Week organised by the Ministry of Labour, goes to the heart of much of what ails Jamaica: poverty, urban degradation, inadequate educational outcomes, criminal violence. The economy, though, is not growing fast enough to create the jobs and to allow the necessary social investment.
When economies do not grow, or do not grow fast enough, mostly what gets distributed is poverty. Which, at the bottom line, was Mr. Orane's warning, utilising data provided by a Jamaican academic, Charles Douglas.
According to these figures, in terms of value of output per worker, Jamaica has been marking time for the better part of half a century. Not since the 1950s, when the country's output per worker grew at 8.4 per cent, have we made significant gains.
For instance, in the 1960s, according to Dr. Douglas' work, labour productivity grew at four per cent per annum, or half the rate of the previous decade.
During the 1970s when the economy came close to collapse, productivity turned negative and the performance followed us into the next two decades. Even now, we are hardly making headway: anaemic growth, averaging at little over one per cent per annum, is cancelled by an equivalent growth in population. That is, we are being kept at first base.
Of course, there are those who, with some justification, argue that the measures may not be particularly accurate. With an informal economy that accounts for 40 per cent of gross domestic product (GDP) and an expanding services sector, the International Monetary Fund and the World Bank, and others, suggest that we may be undercounting growth, which may be nearly twice the official figure.
Even if that is so, there is still a problem, one that is obvious in firms, in government agencies and in the unemployment and the underemployment in the economy. It is obvious in our standard of living. It is obvious in our per capita GDP.
The question is: what are we going to do about it? This newspaper has answered that in the past, in great congruence to the position adopted by Mr Orane.
In the first instance, we have to begin to link people's pay to performance and output. It can't be overly difficult, for instance, to link the salaries of teachers to educational outcomes. But performance-based pay can't be only for those on the shop floor and to the exclusion of those at the top or in the boardrooms.
But there are other issues to be addressed, which will require some serious eyeballing and frank talking, such as in the process of drafting a social partnership agreement. For instance, there has to be an overhaul of the labour market to make it more flexible and greater investment in R&D at the level of firms. Such shifts will require hard policy decisions and the incentives required to induce the shift.
It also requires a labour ministry that understands that it is a front-line economic department and not just a labour mediation agency.
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