Government is the problem

Martin Henry, Contributor

When government fails to properly fulfil its core responsibilities, it becomes more the problem than the solution. All over the world, governments have mainly become minders of the economy and providers of welfare services, and people have come to believe that this is the main business of government, while making more and more demands upon the state.

Ironically, most of the 'successful' governments in the developed world are now buried deeply in debt, contracted to satisfy escalating demands and are operating welfare systems that are doomed to collapse under their own actuarial deadweight. They simply cannot be paid for without bankrupting other areas of operations of the state.

The Jamaican Government is a big part of our problem - the biggest part. And we need not start with the economy. The most basic duty of government is the security of citizens, the maintenance of law and order, and ensuring public safety. With murders peaking at more than 1,600 per year in the recent past in a population of just 2.7 million people, the Government of the Jamaican state has been a disastrous failure.

bigger failure

When the reasons behind this high murder rate are examined, the Government comes up as an even bigger failure. Some 80 per cent of these murders occur in zones of political exclusion which the government has allowed to be constructed by the political parties which themselves have alternated in forming the government. The abuse of state resources, especially housing and government contracts, has greatly contributed to the construction of the garrisons.

Poverty has always been a fact of Jamaican life. But until guns were politically added to urban poverty, beginning in the mid-1960s, violence was not a particular characteristic of poor urban communities. The failure of Government to nip the problem in the bud, or, subsequently, to bring violence with its strong roots in tribal politics, under control has imposed heavy social and economic costs upon the country.

The World Bank has estimated that crime could be costing us some seven per cent of GDP. Security concerns have imposed a heavy burden upon investments and business operations. Extortion operating largely out of the same zones of political exclusion, with the lesson being learned elsewhere, imposes its own burden upon business.

And the crime impact upon the economy is not just about big and formal operations. Strife and the fear it engenders, and the lack of security of person and property, have deeply affected small-business activity. Added to normal business risks are these law and order risks which discourage business investments.

improve public safety

One of the most important things Government could do for the economy is simply to improve public safety and law enforcement.

A core function of government is the delivery of justice. Government is the defender of the fundamental rights and freedoms of citizens and the arbitrator of disputes between citizens. The 400,000-plus backlog cases in the courts are sufficient evidence of the failure of the Jamaican Government to deliver justice effectively. Government itself, particularly through its security forces and judicial operations, has abused the rights of citizens. People are locked up, sometimes arbitrarily, and often for long periods without bail or trial.

And Government, through laxness in law enforcement, has allowed wholesale trespass upon the rights of citizens by other citizens. Everything from noise abatement to zoning laws, from littering to vending, has been let loose in law enforcement so that the country is very much a jungle in which every person's hand is against his neighbor. The rule of law in a peaceful and orderly society is an absolute necessity for the growth and development which government is everlastingly promising.

A core function of government is to erect and maintain public infrastructure which private enterprise cannot undertake at profit. The decay of the road network, left as a colonial legacy, is a powerfully visible evidence of the failure of government in this core duty. Courthouses and police stations are falling down. A couple of years ago, I viewed with shock and dismay the decay of the Falmouth courthouse, a fine Georgian structure neglected and falling apart even as justice is dispensed from it.

While it is true that highways have been built, new public buildings erected, and so on, too much has been left to rot and to fall apart, imposing additional burdens upon the people.

Government has a sacred responsibility to maintain a stable currency in a low-inflation environment to protect the value of people's property and labour in the domestic currency. The prime minister and leader of the Jamaica Labour Party now forming the Government may have got his particulars on the devaluation of the Jamaican dollar wrong when he spoke at the ellection-date meeting in Mandeville last Sunday. But the general trend is quite clear: The Jamaican dollar has declined in value from parity with the US dollar at currency conversion in 1969 to as low as nearly 90:1. Jamaican citizens have been ravished by devaluation and inflation caused by Government's management of the economy and not by anything that people do in their private capacities.

the damocles of debt

The debt burden, as this newspaper now regularly reminds us, stands at $1.6 trillion and is about 130 per cent of GDP. The debt was contracted to bring 'benefits' to the people by a caring government faster than the growth of the economy could provide them. Then the debt itself became one of the biggest inhibitors to economic growth and of the provision of services to the population.

As the demands of debt servicing grow, more revenue has to be collected and diverted to debt payments. And money has to be borrowed to pay down on money already owed! At one point, two-thirds of the annual Budget was devoted to debt servicing! And from what is left, Government spends the biggest slice on the public-sector wage bill, covering nearly 10 per cent of the country's labour force and offering state-paid pension benefits which cannot be sustained without bankrupting the country.

Government has progressively created a complex and oppressive tax system, punishing some and letting others off. The burden resting on the shoulders of PAYE payers of income tax, and the 200,000 waivers in the system, speak loudly to the tax problem created by Government. Meanwhile, 50 per cent of property tax simply goes uncollected, the self-employed pay precious little income or profit tax, and most of the company taxes are paid by only a handful of companies.

Government has chosen to exempt many items from GCT, ostensibly for the benefit of the poor, rather than doing the sensible thing of setting a low and universal GCT rate and providing targeted assistance to the needy.

The country needs a government which clearly understands that the best thing it can do for citizens in general, and for the beloved poor in particular, is to carry out the core functions of government in a disciplined and efficient fashion, calling upon all citizens to bear their fair share of a moderate tax burden. Then Government will be the solution.

Martin Henry is a communication specialist. Email feedback to columns@gleanerjm.com and medhen@gmail.com.