Sun | Apr 5, 2020

Densil A. Williams | Beyond the numbers: Budgeting for Jamaica’s future

Published:Sunday | February 23, 2020 | 12:20 AM

As Jamaica prepares to present budget 2020-2021, it is critical that our policymakers, commentators and journalists who shape public opinion move beyond the pedestrian analyses of absolute versus relative size of the budget and focus more on the transformative power of the numbers.

Already, we have seen the clever move by analysts to downplay the increase in the budget. A headline saying: ‘2020 budget increased by over J$50 billion compared to budget 2019’ seems to be an inconvenient truth for an election year.

However, it is a fact that cannot be hidden. For, the budget of over J$850 billion must be compared with the budget of circa J$800 billion that was presented at the corresponding time in March 2019, not the estimated spend of over J$859 billion for March 2020.

It is unwise to do the latter comparison as, by March 2021, we will have at least two supplementary budgets that will run beyond J$50 billion, thus making the spend in 2020-2021 much higher than that in 2019-2020.

It is unhelpful to engage in intellectual gymnastics to confuse people. Nothing is fundamentally wrong with the budget increasing by over six per cent in an election year, once the increase is used to fund critical issues that have hindered our development over the last five decades, and not on some short-term, unsustainable projects that will only bring instant gratification and lead to greater levels of inequality in the system. Budgeting for the short term will no doubt widen the level of economic inequality which is already at troubling levels in our society.

Indeed, Opposition Spokesman on Finance Mark Golding captured this troubling situation well when he noted in his contribution to the supplementary debate in parliament recently: “We are seeing the worsening of the division of Jamaican society into the relative few who are enjoying profits from investments in the stock market and real estate, who are seen at the salubrious restaurants and entertainment spots uptown, and the working poor, pensioners and unemployed who are increasingly left behind by a model of development that marginalises them.” Budget 2020 must be focused on dealing with this troubling problem.

The litmus test for Budget 2020

When the minister of finance presents budget 2020, the key takeaway must be on investment in projects and programmes that will reduce inequality and deliver strong and sustainable growth. The true test of this budget will be in how the minister handles critical structural issues that have impeded our growth and development over the last five decades. Now that fiscal space is opening up after the heavy lifting in the 2013-2015 economic reform programme, the space must be used to tackle some long-standing issues that received very little attention, hitherto.

The Ministry of Education normally takes the second or third largest chunk of the budget behind Finance. However, the largest portion of this investment in education goes towards paying salaries.

This time around, the budget needs to prioritise critical transformation in education with measurable outcomes. These should include: deepening access to the underserved communities, including specific focus on rural Jamaica, curriculum reform to focus on the development of skills that will be critical to function in the new global economy driven by smart automation, investment in information technology both hardware and software, infrastructure upgrade to ensure a comfortable teaching and learning environment.

Healthcare and Productivity

All studies have shown that Jamaica has a productivity problem which prevents it from achieving high and sustained levels of economic growth. However, productivity is the manifestation of deeper problems. An example is healthcare. A healthy population will have higher levels of productivity. Days lost due to illness is productivity lost. One of the biggest contributors to ill-health is non-communicable diseases (NCDs). Data shows that in CARICOM, 65-85 per cent of deaths are caused by NCDs. It is unsurprising, therefore, that Dr Tufton, minister of health for Jamaica, set out on a path to raise the nation’s consciousness about the dangers of NCDs.

This budget must pay more attention to issues of healthcare, including, but not limited to: the physical plant to ensure that citizens are not turned away for lack of space, pay and remuneration for healthcare workers, access to critical healthcare services in the public system, among others. A focus on improved health outcomes in order to lead to higher levels of productivity must be a signal that this budget sends to the population.

Corruption and citizen security

To say crime is out of control is an understatement. With almost 150 persons murdered since January 1, 2020 is very frightening. The fear of crime is having a crippling effect on economic activities, social life and overall well-being of all Jamaicans. This budget must provide a clear indication that the resources pledged for citizen security will be used judiciously to deal with corruption and its progeny, crime and lawlessness.

There is no doubt that there is a symbiotic relationship between corruption, crime and economic inequality. If Jamaica is to see real prosperity then there must be zero tolerance to corruption. This budget must have clear identifiable targets for dealing with corruption and a time frame within which these will be achieved.

Announcing that more resources will be given to the Ministry of National Security to purchase vehicles and invest in technology will not be enough. We want to hear more on the root causes of crime, one of which is the high levels of corruption in the society.

Enabling export-led growth

Budget 2020 must focus on growth. We need to see clear initiatives that will lead to higher levels of growth beyond the anaemic levels we have become accustomed to over the last 40 years.

A big signal this budget must send is the focus on export-led growth. The government launched the economic growth team co-chaired by action-oriented business mogul, Butch Hendrickson. I am optimistic that with its focus on export-led growth we will see results, as the players at the table are result-oriented persons.

The budget must give us an indication of the level of resources that will be allocated to this important activity. Merely putting the team together and not providing the required resources and enabling support to make increased exports a reality will be bad for the growth agenda.

If budget 2020 does not pay close attention to the four non-mutually exclusive areas above it will not add much value to the national discourse on growth and development.

Merely dishing out goodies that are not informed by deep analyses of the intractable things that have held us back will be an exercise in futility. Analysts and commentators must now move beyond the basic commentaries about debt, interest rates, exchange rate, fiscal surplus, etc., and focus more of the transformative power of the budget.

The budget must lead us towards dealing with the structural problems that have hindered high and inclusive growth over the last 57 years. The fiscal space is becoming more conducive for this direction. Let us use it wisely.

- Densil A. Williams is professor of international business at the UWI. He may be contacted at densilw@yahoo.com