David Salmon | Did Andrew Holness just launch a national industrial policy?

Prime Minister Andrew Holness touched on all the right notes in his economic policy address on Tuesday, aptly titled, 'The Next Chapter: Pivot to Inclusive Growth'.

While on the surface, this address might seem similar to previous statements he has made, this message was something different. The prime minister basically did a soft launch for a national industrial policy.

The focus was on growth. He highlighted the need to ensure that skills closely align with the private sector’s needs and he argued for new industries to be built. He spoke about upgrading existing sectors such as expanding medical tourism and the building out of our logistics capabilities. If it looks like a duck, swims like a duck and quacks like a duck, chances are it is a duck. While he did not explicitly state it, this essentially amounted to an industrial strategy announcement.

Setting the Context

The prime minister situated his announcement in the historical context that Jamaica finds itself in. It is remarkable that we have continued to maintain economic stability for such a long period. Plus, it is always a useful reminder knowing that Jamaica has finally finished paying off debt incurred before I was born, that very dark time known as the 1990s. The history lesson was appropriate, the stage was set, and the prime minister presented on a lot, and I mean a lot of points.

While The Gleaner won’t give me the word count to go through this 90-minute presentation, some points stood out. For one, this is perhaps the first time I have heard the prime minister outline such a comprehensive vision for what he wants to see Jamaica achieve in the future. Gasp! I know, but hear me out.

For the past seven years, the administration’s posture has been that of a stern school teacher, stressing the importance of fiscal prudence. Then, they morphed into a firefighter dealing with a tsunami of crises – COVID, Beryl, US travel advisories, you name it. The only thing they probably haven’t dealt with was an actual tsunami and we don’t need that. Now, the prime minister has set the stage for being more visionary.

The Missing Tools

However, the challenge that most visionaries face is the inadequacy of the tools at their disposal. I don’t mean the individuals in the bureaucracy, but we will get to that in a moment. I mean the agencies that government relies on. They either do not have the resources, the reach or the capacity to write the next chapter in this country’s history. The implementation of a growth-oriented strategy needs the development of public bodies that can achieve that goal.

JAMPRO is one such agency that will be pivotal. Although, this would require the agency being reorganised as a bully pulpit with the authority to cut through multiple departments and regulations to achieve growth. Currently, the body does not have that authority or resources to carry out this mandate as its responsibility lies mainly with investment promotion.

The Port Authority of Jamaica (PAJ) may have the resources to carry out this mandate, but it does not have the reach. Currently, the organisation has taken on the role as the institution entrusted with accomplishing impossible tasks. This could be developing the Port Royal Cruise Ship Pier in one year or being the lead driver for the execution of the long awaited Caymanas Special Economic Zone. The organisation has done a commendable job, but it does not have the reach to execute a whole-of-government approach.

The Planning Institute of Jamaica (PIOJ) could be that driver, but it would need to be able to move beyond quarterly economic forecasts to create 10- and 20-year plans. This requires the build-up of its capacity. On paper, the tools exist even though they either need to be retooled, reforged or repurposed to achieve this growth-oriented mission.

Avoid Duplicating Efforts

On Tuesday, Prime Minister Holness referred to the formation of a Jamaica Institute of Technology that will be done through a partnership with the Government of India. In pursuit of developing new institutions, it is important to examine how these entities interact with the existing context.

For example, what will be the relationship between the Jamaica Institute of Technology and the University of Technology, Jamaica (UTech)? Will they be the same or different from UTech? Will the institute be fed by students from the STEM schools, that were previously announced? What would their relationship be with the wider school system?

These are lovely ideas, and they can work but these institutions need to be coordinated so we don’t get duplication of efforts or parallel systems of education. This kind of institutional build out is possible as the HEART/NSTA Trust has shown. However, the prime minister needs to seriously look at building out other tools if he wants to be an effective visionary and not become a prophet.

Everything, Everywhere All at Once

A major element missing from Tuesday’s presentation was the coordinating mechanism needed for this effort. And yes, Prime Minister Holness spoke about revamping EPOC into the Efficiency Programme Oversight Committee, an agency tasked with cutting regulations. Be that as it may, coordination must go beyond that, and the prime minister cannot be everything, everywhere all at once.

Turkish economist Dani Rodrik has consistently highlighted that the success of any industrial policy requires someone at a senior level coordinating said policy. I have seen where Prime Minister Holness is committed to that mission. Nevertheless, the challenge, as he has highlighted, is the “muscles” needed to execute these policies.

The bureaucracy is rightfully those muscles. Yet, if they are as “self-seeking” as he has identified, then an overall coordinating mechanism is needed to achieve these results. One reform that should be considered to ensure bureaucratic accountability is the introduction of performance-based compensation to guarantee that this growth-oriented strategy is effectively implemented.

Cutting regulations is also no easy task and other muscles that need to be built out is the capacity of the bureaucracy to create sound legislation quickly. Parliament has a limited number of legal drafters. Given that the prime minister spoke about aligning industry needs with skills employment, maybe we can take some of the excess lawyers we produce and start there.

Who knows? If we give them training in drafting legislation and set them to work, that should solve the underemployment problem, among attorneys at least. But outside of upsetting my legal friends, it is important to seriously consider what bureaucratic muscles need strengthening and what aberrations need to be cut off.

This requires a Herculean effort and the challenge that exists is that there are always incentives for an opposing party to renege on that collaboration. Therefore, the prime minister was right in identifying that one factor that contributed to Jamaica’s economic turnaround was the achievement of a bi-partisan consensus.

Notwithstanding that, it is easy to be bi-partisan when you have the threat of financial ruin staring you in the eye. Jamaica achieved a fixity of purpose like a nation mobilising for war. The challenge now is to achieve progress in peace times with the added fiscal space and lower debt. Successive governments have won the war, but can they win the peace? But I digress.

Prime Minister Holness is right about the need to pivot towards growth. In terms of this policy announcement, it’s not quite an industrial strategy but it’s a good start. Let’s hope that he has the stamina, the team and the will to see this mission through because God knows, he needs it.

- David R. Salmon is a public commentator, development specialist and a Rhodes Scholar. Send feedback to columns@gleanerjm.com and davidsalmon@live.com or on X @DavidSalmonJA.