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Bridging the gap between economic education and expectation

BY SHALMAN SCOTT

Sunday, April 15, 2018

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The gnawing and widening gap between the economic education of the Jamaican people and their economic expectations must be closed poste-haste.

There is indeed the clear and growing need for this to happen in order that greater clarity in respect to the discussions and choices surrounding the economic struggles of our people, particularly in their households, can be attended to with a view to increasing understanding of the various economic and political issues directly and indirectly impacting our lives.

The barrage of political promises in the 2016 election campaign, the expectations that these promises generated, and now the uncertainty about their fulfilment underscores, the need for more public, political and economic education reminiscent of the cold war period, particularly during the 1960s and 70s.

In addition to some political tricksters intent on deception, interpreters and messengers of our collective economic circumstances are particularly those graduates of universities with doctorates and other certification, and whose voice are usually heard in the media, telling us how individually and collectively we can get rich. While there exist few notable impressive exceptions, a closer look at the track record of most of these “economic and business” demagogues is that they have never owned or run a successful business.

Despite their brilliance in economic theories, their destinations are to be found in low-risk teaching or some other cushy government jobs where the taxpayers give them a fortnightly or monthly cheque, or in the private sector where the real owners of business find the money to pay them at agreed intervals. So the divide in our country between “talking business” and doing business is clear, based the evidence of the lives of the “business and economic experts” who, while they appear and sound very bright, are very broke.

It is an understatement to remark that this, our country Jamaica, has many deficits other than financial. There is a tendency to glamorise and glorify mediocrity and foolishness; to elevate brinksmanship masquerading as seriousness of thought.

Fifty-six years after political independence in 1962 we are among the most indebted countries in the world. We have seen anaemic growth in the economy and a description of which the World Bank called “the paradox of growth”. Rising levels of poverty, income inequality, reduction in labour force participation rates, and an unmanageable debt overhang that the increased chattering within the echo chamber has not been able to solve. So the more the theoretical economic messengers and business advisers appear on newspaper pages, radio and television, the more our economic problems worsen. But it is not all their fault. We have to accept blame for the choice we make about managing our personal money and other assets; alternatively, our poverty and our politics.

But even more than that, we must accept blame for listening to the advice of those who might sound good but have no personal success story to which they can point or tell.

At the same time, we fail to pay sufficient attention to the doers of business and their formula for success. And these are not necessarily the mega companies within the private sector. It could be our next door neighbour or just an operator of a successful small enterprise on the corner. I salute the thousands who have made a success of their lives through the dint of hard work, sacrifice and discipline, even as they were not the beneficiary of any organised or sophisticated schooling. These ordinary people have proved that the phrase 'common sense' is really the sophistication in reasoning among the common unlettered folks.

However, there are differing levels of business and economic interactions within the domestic environment and externally due to the increasing networking and integration of a globalised economy.

New and different skill sets are required to cope with economic challenges occasioned by internal and external shocks, trade policies, geopolitical shifts and tensions and their impact on the business environment. Economic education that is underlined by application and pragmatism must lock step in our march towards collective economic progress so that the present divide between education and economic expectation is reduced to a thin line.

In that posture, we will increasingly discover that all economic outcomes has at its foundation behaviour. That Jamaica's gross domestic product (GDP) is simply the arithmetical measurement of how we are behaving or how we have behaved. Consequently, our justifiable yearnings for economic growth and development GDP/GNI numbers will not change in any impactful way until there is a change in our behaviour, and by a change in the quality of our thought.

The genius Albert Einstein reminds us that: Problems cannot be solved at the same level of thought which existed when the problems were first created. It requires a higher level of thought. We expect the successive ministers of finance to stop the slide of the Jamaican dollar, but fail to see the connection between the number of motor vehicles crashes on the road and how that situation prevents the minister from doing what we wanted him/her to do in the first place. Because of the lack of economic education, we work against our own best interest many times without even being aware, since we fail to make essential connections in the cause and effects relationships operating in our economic space.

In economics, the 'Wasteful Output Gap' is the difference the present economic performance and its capacity for optimal performance. Praedial larceny, the impact of crime which presently is 6.8 per cent of the GDP of the country, corruption and the funneling of the country's resources into wasteful non-productive activities result in suboptimal economic performance.

And since economic objectives, fundamentally, is to promote the highest level of employment, price stability and social peace, we cannot remain architects of our own misfortune by this sustained and continuing lack of economic education resulting in our failure to stop our own self-sabotage.

We must turn things around collectively and get real — divesting ourselves of the new gig of public relations gimmickry masquerading as reality. It is not. This political bubble with which we are being manipulated by public relations strategists to hug up is nothing more than a fleeting illusion, and we just need to look at our macroeconomic indicators: The debt as a percentage of GDP; balance of trade deficits; the labour force participation rate with an eye on underemployment and disguised unemployment as job transfers in restaurants, BPO and domestics are different from those lost, with more to come, from government workers. And accept that with all the political theatrics: deception, deflection and distraction — this make belief — we are sliding backwards into a society that, as citizens of this country, we had long passed.

And so the disconnect between what we are hearing and what we are experiencing is real. It is called in the discipline of psychology cognitive dissonance (disharmony). It is left to us, therefore, to chart a new course attitudinally, as we embrace a new vision by eschewing this reality of a dark vision, even as we desist from fighting to 'promise more' instead of fixing more in this society.

Jamaica is one of the most highly indebted countries in the world and tourism, which is touted as one of our saviours and contributes a minimum of 80 per cent of the earnings from that industry, does not come into Jamaica.

In an article published by the Sunday Observer on February 18, 2018, and written by Minister of Tourism Edmund Bartlett, he had this to say: “Developing countries including Jamaica experience a higher rate of tourism leakage than the rest of the world. It has been estimated that the rate of leakage among developing regions range from 70 per cent in Thailand to 80 per cent for the Caribbean to 40 per cent for India.

Continuing, the tourism minister wrote: “A study conducted by the United Nation Environment Program (UNEP) found that only $5 out of every $100 spent on a vacation package by an overseas traveller from a developed country stays in the developing country's economy.”

The clear inference from what the minister of tourism has stated is that economic linkages, with all the talk, pronouncements and announcements, is dismal at best and deceptive at worst, setting the country on a path where our illiquidity problems are slowly but surely moving on a trajectory toward insolvency. The minister of tourism's revelations in that February 18, 2018 article is a must-read I humbly suggest. It consists of a litany of what must be done and are going to be done. In other words, nothing new that we have not heard a million times before in the last 40 years of the country's indebtedness and in the face of its tepid and anemic growth. The prescriptive and serious Mr Howard Mitchell, president of the Private Sector Organisation of Jamaica (PSOJ), has not been mincing his words about the state of negative play within the Jamaican economy.

The agriculture sector is one of the industries that is a sure bet for Jamaica to rise like a phoenix from its economic quagmire. It is also true that our behaviour in agriculture will affect the slide of the Jamaican dollar. If enough is not produced for local consumption and export to earn foreign exchange, pressure is put on the countries reserve to purchase imports, including machinery and technology, that will in turn cause the local currency to slide, unless there are alternative areas that can compensate for the shortfall in income from agriculture.

When our behaviour in the sector is that because of praedial larceny farmers cannot reap what they sow, frustration in the sector will ensue which negatively reduce production, which impacts similarly on the slide or devaluation of the currency.

I believe that this gap between economic education and economic expectations can substantially be reduced by business persons with a proven track record of success guiding the public discourse in respect to a collective strategy to bring our people up to speed on how to approach business both domestic and commercial in a pragmatic world.

The larger part of the population has done away with school attendance, but still needs information to make weighty and strategic decisions that collectively impact on all of us. The private sector must step up its direct involvement in meeting the needs of public economic and business education: The route to our material salvation.

Political historian Shalman Scott served as the first Mayor of the city of Montego Bay

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