What are taxes for? Some thoughts on Dr. Phillips’ proposed bank tax and some possible unforseen consequences

Jamaica’s Finance Minister, Dr. Peter Phillips, has done something rare in Jamaica: he’s managed to get a lot of people to agree on something.

Dr. Peter Phillips thinking back to easier days, when he was a dreadlocked Jamaican, not a deadlocked one?
Dr. Peter Phillips thinking back to easier days, when he was a dreadlocked Jamaican, not a deadlocked one?

Unfortunately, for him, they tend to agree that the bank transaction tax he’s proposing is not a good thing. Many civil society groups have formally commented unfavourably on the proposal. We need to see how the conversations go in coming days, including as the Opposition make their budget responses. But, the Minister also gives us an opportunity to think about some basic elements of economic policy.

Some people have applauded the Minister’s choice of taxing bank transactions because it’s almost universal (at least for all those who are using the banking system), simple, and easy to collect.

Why do governments impose taxes? In a simple sense, taxes are mainly used to finance government expenses. But, taxes can be used to modify social behaviour. They can discourage ‘bad’ behaviour, eg polluting, consuming goods or services that governments think are bad for citizens, but which tend to be consumed notwithstanding that, e.g. a tax on cigarettes or on some or all alcoholic beverages. Taxes can also be used to protect local and infant industries, by taxing imports. Taxes also allow governments to try to achieve greater equality of wealth and income. To improve the balance of payments by increasing the duties charged on imported goods. To control spending in an economy.

Dr. Phillips has not explained what is his reasoning behind the new tax proposal, but we know that the budget had a hole of J$6.7 billion to fill and the other taxes imposed still left a gap of J$2.3 billion. Naturally, if a finance minister can find an almost dead cert for a tax then he’d have to be quite wanton to ignore it. But, taxes will have other effects once they are in operation, so some of the other effects that could be behind a tax measure can still come into play.

The bank tax will have some impact on social behaviour, not necessarily in terms of goods and services bought, but in how people go about their transactions. Economic agents will try to find ways the make the fewest withdrawals possible for any set of expected transactions. At its simplest, people may withdraw cash in a lump sum and then use that for transactions, trying to steer as much as possible outside the banking system. In other ways, those who can, will resist putting their incomes into banks so that they do not have to incur costs from withdrawing it again. In economics terms, people and businesses will tend to disintermediate from the financial sector. This will have another effect, longer term, in that the ability to use the banking system’s operations as part of the government’s monetary policies will start to diminish. That may, at least, complicate matters for the government and central bank later down the road.

Jamaica already has a low saving rate, and this wont help, at least in terms of money kept in banks. People are already sizing up their mattresses as a place to keep their money. Is this really the future that the Jamaican government foresees for a country that is supposedly primed to start growing after decades of stagnation?

Because both businesses and persons will be affected by the bank tax, we will need to see how each arranges its affairs. It’s quite feasible, that once domestic enterprises have figured out what the costs are and how it may affect their profitability, they may be inclined to move away from financial transactions with each other, but trade through barter. This may not be simple, but necessity is the mother of invention. Companies can easily find out the value of their goods in terms of other products, so rather than letting money remain the medium of exchange, companies may see if they can exchange products, 100 tins of ackee for 500 boxes of paper clips. There may be accounting issues to resolve, but to the extent that no legal constraints exist, barter may well be the order of the day for some, if not most enterprises. That may be good, in that brokering of barter deals may be new work in the economy.

Persons could do the same, but maybe without the same ease. Self-employed persons would be better placed, and more so vis-à-vis enterprises rather than other persons: one lawn cutting for 10 tins of orange juice, let’s say.

Dr. Damien King, a UWI professor of economics has spoken about how the bank tax is ‘progressive’: it affects the wealthier segments of society and those who are banked, versus those who have lower incomes and are unbanked. Well, I wont argue that. He has also talked about the efficiency and effectiveness of the bank tax, and its ease of collection. I see that, too, but that is not a good reason enough for a tax. If it were, we’d have governments devising ways in which tax could be assessed and collected for almost everything. We could get a compnay to devise a breathing monitor and levy an ‘inhalation tax’, and set up systems that forced all persons to have bank accounts and tag the ‘inhaler’ to their accounts and get automatic payments to the Treasury.

The government has also done something that I see as perverse. Over the years, citizens have been encouraged to make changes in their financial behaviour, notably to use banks more (for receiving pay and making payments). Having complied to a large degree, the government can now use this more-banked society to impose a near-unavoidable tax. Well, try to get people to change other behaviours and see whether the suspicion exists that this will be the first step toward penalising those who have agreed to the new way of doing business.

Former contractor general Greg Christie says the impending tax on withdrawals from deposit-taking institutions sends the wrong signal to foreign investors. He sees tax moves like putting a levy on banking withdrawals as signalling high risk for investor.

Finally, for now, the proposed tax sends a bad message regarding tax evasion.

Tax evaders in Jamaica have an easy time. (Courtesy of The Gleaner.)
Tax evaders in Jamaica have an easy time. (Courtesy of The Gleaner.)

The government has more than enough revenue due but unpaid to cover its residual gap, but seems to have no intention of going after those payments. If that seems to be the approach, then what is to stop economic agents taking the calculated risk of not paying other taxes, given that the government seems less concerned about arrears.

The US financial sector is sharpening its swords for a battle with the Obama Administration over a possible bank tax. In that case, its aim is to recoup expenses incurred in taxpayer bail-outs of financial institutions.

Perhaps, the Minister and his band of advisers have thought through the tax measure and see no problems ahead. Somehow, I think they have a few surprises lurking ahead for them.

Jamaican governments have a low rating for credibility and this new measure does not enhance that reputation. Dr. Phillips has gone the hakuna matata route, looking for low-hanging fruit. Many would love to see either that banks profits were taxed directly. Others would love to see the government making real sacrifices. As someone pointed out, if government officials are allocated J$50,000 a month for cell phone calls, could that not be reduced, to say $10,000? Jeepers, many can survive on much less, why must the public pay for what seems like excessive usage? Without tackling the other side of the ledger well, the government again gives the impression that it is not ready to suffer along with the rest of us.

The good, the bad, and the ugly (April 20, 2014)–Easter bun and cheese edition

Jamaica is awash with Easter festiveness. That means partying and music and kites and bun and cheese and fish.

Homemade bun with real Cheddar cheese. Joy to the world.
Homemade bun with real Cheddar cheese. Joy to the world.

Most of all, it means a four-day holiday, since Good Friday though Easter Monday. I had a discussion during the week about whether Jamaica is secular. The reason for Easter is religious in the minds of Christians and Jamaica celebrates this holiday with much religious fervour–churches are full for services since Good Friday, through ‘Night Watch’ vigils, up to Easter Sunday, when Christians can again sing “Hallelujah!” That’s not what secular countries do. Anyway, let me not walk into that garden now. Let’s look at of what the bun and cheese may remind us. That’s it for the good.

Well, onto the badness. In Jamaica, we had a Budget speech from our very eloquent, hardworking, deep-thinking Finance Minister, Dr. Peter Phillips. For me, the low light had two beams. First, his move to close his budget financing gap with J$6.7 billion of tax measures. Wait a minute! Holy week! This same man had told the country in January that there would be no tax increases this year. Have we moved to another calendar? His fellow Parliamentarians, at least, should haul him back and say, “Varlet! Thou didst speakest unto the people that nary a tax penny would be added to their already heavy fiscal burden. Prithee! Doest thou not remembereth that?” The second beam is a proposal to tax banks on all withdrawals by customers. ALL! Jumping Jehozafat! Trying to sweeten this gall-laden sponge by saying the rate is likkle bit, is not the kind of vinegar given to Jesus and many people are not swallowing it. I have not heard or read or seen one major group come out in favour of this.Tax burden Some have called it ‘ridiculous’ and ‘pernicious’. Fighting words. A petition against the measure is already circulating on the Internet. I see money leaving banks and what’s called disintermediation. Not what Jamaica needs. I also struggle to think what rationale is behind the measure.

Ugliness is written all over the recent developments at the Alpha Boys’ School. Minister of Youth and Culture, Lisa Hanna, essentially branded boys there as a band of uncontrollable sexual deviants. The Observer cartoonist Clovis stuck in the stilletto with a drawing of a boy escaping the school yelling “Rape!” That was really tasteless. In one fell swoop, the school that has a rich music program and has produced many of Jamaica’s famous musicians, an image was tarnished.

Play music for us, boys
Play music for us, boys

Beyond retrieval? The school feels damaged by all this and some of the boys too, and the Sisters of Mercy issued a statement about “untruths”, not naming anyone. The Minister, feeling that the hat fit, rebutted and said that she’d told the world (and maybe that’s the problem) what she had been told about the school by the Sisters. In a war of statements that is now on, who will walk back? Politicians don’t usually do that and rarely with speed. Maybe Alpha’s problems should never have been publicised as they were was during a press conference. Too late. A lawyer wrote to the press citing knowledge of abused boys at the school and of adults, including clergy, systematically importuning boys into inappropriate relationships. If so, I wondered why that lawyer has not sought to get police involved on behalf of the abused.


Jamaica’s electoral problems are not about voters, but about voting…and politicians

Everald Warmington, MP, would have us believe that the 48 percent of Jamaica’s electorate who do not vote are a source of problems in our political system. I say, on the contrary: they are a symptom. If those non-voters were to cast ballots we could end up with a situation that, in my mind is worse than what results from their not voting. It could seem as if they had not voted.

Jamaica has a first-past-the-post (FPTP) voting system, which gives to victor in elections all of the representative power. In other words, just being ahead of your opponents means that all of the spoils are yours and your party’s. So, we could have the 48 percent voting, and they call cast their ballots for one party evenly across the country, and the remaining 52 percent vote for another party in similar fashion, and that party would take all of the parliamentary seats.

In many countries that would not be terrible. But, in Jamaica, it is the tip of a major disaster. Our system of politics is so tribal—JLP or PNP—and vindictive that when ‘it’s our time’ the winners make sure the losers know what they have lost—power. So, the 52 percent ‘make life hell’ for the rest. That’s perhaps an extreme portrayal, but it’s what’s at the bottom of our system. If our politicians were more prepared to represent the nation then we would be less worried. But, they want to take care of their own. So, the 48 percent lose big time.

The system would be at its most obviously ridiculous if the 63 parliamentary seats were each decided by a single vote in each case in favour of one party. Then, we would have all 63 seats going to PNP or JLP and all because of 63 people, out of a total electorate of just over 1.7 million. Imagine that.

I don’t know if the non-voters have made that analysis, but it would not be difficult to do and not unlikely to have been done.

If we had a proportional representation system, we would end up with a legislative body that reflected the 52:48 split in votes, and that would be near parity. Depending on how we let the legislature work, the 52 percent could still railroad the rest, but it’s less likely.

The UK has wrestled with this problem for decades. It was mainly a two-party system, but a third party started to get a large proportion of popular votes. However, the geographical shape of electoral seats meant that this party hardly won any seats in Parliament. The unfairness was clear. But, things reached a point where that party managed to get enough seats to start to matter. The larger parties needed to get their support to be able to win elections overall. They did not get proportional representation, but they started to matter more. The last set of UK elections resulted in a situation where one of the two major parties needed to get the support of the third party to be able to form a government–a deal had to be brokered.

The Liberal Democrats became 'king makers' in UK elections
The Liberal Democrats became ‘king makers’ in UK elections

The Tories had got the sweetheart and their ‘marriage of convenience’ with the Liberal-Democrats has now gone down in history.

I think that Jamaicans have acted rationally in many ways over the past 50-odd years since Independence. They have seen that votes matter less and have decided to vote less. That is the clear trend. Look at the voting data. Votes don’t count that much when seats are skewed in favour of one or other party. That withdrawal has been one of the signs of a lack of faith in the political system. That could change if all votes counted equally. That, of course, would not meet the approval of many politicians who depend on being able to boss and bully because they have the margin of votes to hold a seat, even though that margin may be slim in some places. It also means that holding onto that seat become much more important. The FPTP system is one reason why Jamaican politicians do not get held to account in a way that they should.

Some politicians like to label voters as the problem and do not see that they are as big a problem. Not only do we have a screwy system of voting, we also have a set of candidates offered to voters that clearly do not appeal. That’s also what non-voting shows. Dud 1 or Dud 2? Neither, thank you. It may be hard on the ego of would be national leaders and builders of legacies, but like when children dislike okra or spinach, it’s just the truth.

So, will Jamaica do anything about this? The basic problem was aired soon after the last general elections in Jamaica, in a clear article by Ken Jones (not related 🙂 ). The issues have not changed.

Most nations use some forms of proportional representation. However, former British Empire countries tend to hold onto FPTP. It’s time to let go of this relic of our colonial past. 

You dropped a bomb on me! Dr. Peter Phillips sings with the budget Gap band. Time to burn rubber.

I distinctly recall Finance Minister Peter Phillips being reported as stating last January, “We don’t have plans for taxation. We have plans for tax reform, generally. But we will have to maintain our deficit targets.” It was in The Gleaner of January 8, 2014. So, I must be dreaming then, when I heard the same Minister announce yesterday that the Government will be seeking to raise $6.7 billion in additional taxes this fiscal year. You can hear him make the statement, in case there’s a doubt that he said it. He doesn’t like doing it. He’s not alone. Nor do we, Mr. Phillips, nor do we. Not at all. In fact, when we look at where the money will come from, it’s not pleasant at all.

  • Unification of the tax on alcoholic beverages – $844 million
  • Levy on withdrawal from deposit-taking institution and encashment from securities dealers – $2.3 billion
  • Increase in the age limit in the sale of second-hand vehicles – $26 million
  • Asset tax increase – $1.78 billion
  • Change in the tax regime for insurance companies – $1 billion
  • Modification of the duty regime for specified vehicles $1.2 billion

My eyes, and those of most whom I have heard comment, fall on that levy on banks of withdrawals and encashments. We know the banks are not going to let that levy be a charge on their profits, and will seek to ‘pass it on’–like a hot potato–to customers. Easter is around the corner and Dr. Phillips has just put the nail into whatever may be good about Good Friday. Bun and cheese were nice, but now that the people are going to ‘get bun up’ with this imposition, I feel that those who understand ‘Who moved my cheese?‘ will start to get nervous. Change does that.

Many people were howling recently about the level of bank fees, but a recent CaPRi study showed that for a sample of countries, Jamaica’s banks’ fees ‘compared favourably’. I’m not going to question the sample, but many will. So, people will find that the money that they were encouraged to place in the banking system now becomes more expensive to take out of the banks because of fees AND because the Government wants a slice of the transactions. So, in addition to losing money through tax on pay, persons, will lose money on taking out money to pay bills. Stay with me here. You start with a $100 and give $25 to the government, and now you have to lose more to the government to pay for phone, water, electricity, groceries, every blessed living thing, as my grandmother used to say.

The PM has been saying often that she understands and feels the pain the people are going through. It sounded hollow before, and now it sounds like a huge doughnut.

Dr. Phillips is clearly a lover of The Gap Band and their brand of funk. Read their lyrics:

You took my money, you took my time
Made me think everything was fine
Then you upped and ran away
And made me just go crazy

What options will that leave many people? At a quick guess, at least one very obvious one. Force persons to withdraw large sums and pay for whatever they can in cash, because all forms of electronic banking are covered. There is usually only so much that people will take calmly. Only so much.

I do not drink alcohol, but I may be interested in getting a slug of that overproof white rum that is not going to be taxed further.

Get out of my kitchen!

There’s a part of me that ought have been dancing a jig yesterday. I read that the Minister of Finance may be stripped of certain powers related to the banking system. Yipee! In particular, the post holder has lost responsibility for appointing the Governor of the Bank of Jamaica (BOJ) and will also lose the power of having direct responsibility for the monitoring of banks and other regulated financial institutions on the island. In addition, the BOJ Governor to now get the power to grant or revoke licences to deposit-taking institutions. This would bring the BOJ in line with the Financial Services Commission, which is empowered to grant and revoke licences for the institutions it supervises.

One man and his pot
One man and his pot (courtesy of The Gleaner, Las May)

Bills tabled in the House of Representatives recently make these proposals. They propose that the BOJ Act be amended to allow for the governor to be appointed by the governor-general for a period not less than seven years–recommended by Cabinet, we can presume (so, it may not really matter that much).

But, there are a few wrinkles that make one a little uneasy. The minister with responsibility for finance may recommend to the governor-general that the governor may be removed for, among other things, failing to adequately discharge the functions of his office or failing to ensure that the bank achieves its targets. Also, at present, the governor, the senior deputy governor, and deputy governors are appointed by the minister for a period not exceeding five years. Despite a change in the way the governor is appointed, the minister will still be responsible for the appointment of the senior deputy governor and the deputy governors, who will be appointed for a period not longer than five years. I don’t understand that and hope that some consistency in appointments gets inserted when the bill is debated. Under the IMF programme, the bills must be passed by May.

Alpha to Omega

I am now beginning to understand a certain personal discomfort. I try hard to take in what I see, read, hear, and experience. In Jamaica, as anywhere, one has no chance of being everywhere all the time, so it’s always a challenge to know how what passes you fits into a bigger picture. Put simply, when I follow Jamaicans in action, how much of it is just those Jamaicans involved or Jamaica as a whole? I get some idea of the answer when I share my experiences, but have to accept that I cannot connect to everyone at the same time and get at least a complete snapshot. Because Jamaica is a relatively small place with a population that is large by the standards of other island but one that tends to be close, we often think that what we notice in one place is reflective of the whole. We used to have some clear distinctions between ‘town’ and ‘country’ ways, but that is now much less we are led to believe. Let me keep wrestling with how the pieces fit in general, but try to deal with it in a specific way.

I think that most Jamaicans are caring people, and when it comes to children, the care is often very clear to see. Yet, we also know of and see examples of a disregard for children and their welfare that is really frightening. We are witnessing the unfolding of such an instance, and it has political ramifications, so can seem much larger for that reason.

Many of us will have read about the coming closure of the residential facility at the Alpha Boys School in Kingston.alpha boys school I do not know the school, but just the other day was told by an acquaintance that he had gone there as a boy. (I may talk more to him about the school in coming days.) I know that many of Jamaica’s famous musicians got a great start from going there.

The reasons for the closure seemed to be a combination of financial problems and behavioural problems with boys at the school. The news release by the Jamaica Information Service of the remarks by Minister of Youth and Culture, Lisa Hanna indicated closure would come in June. The Minister outlined the financial problems, but also put heavy emphasis on child abuse in general (most of the 6 page release), talking of a ‘national crisis’ regarding depraved behaviour and ‘behavioural problems’ at the school‘The Sisters of Mercy cited the grave anti-social behaviour of children in the care system, the sexual predatory nature of the boys on one another, children who are witnesses of serious crimes or are victims of heinous acts‘ [my stresses]. The release thus gave the clear impression that this abuse was the MAIN reason for closure. Media interest latched onto that aspect, being more sensational, and perhaps suggesting that there was the tip of an iceberg that would generate more news interest. More stories and comments started to fly around–and I have only heard and read some of them–but, it became an uncontrolled ‘firestorm’ for the school. So much so that the Sisters needed to issue a statement yesterday. A friend wrote this on her blog post yesterday.

That action especially saddening because earlier in the day a cartoon depicting a boy running from the school, without his underwear, crying “Rape!” had featured in the Jamaica Observer. I found the cartoon distasteful but did not take ‘Clovis’ or the paper to task, preferring to just ignore it; there’s a fine line in humour between acceptable and unacceptable, and personal views often draw that line differently. I don’t know if many complaints flowed to the paper and it may feel the need to apologise. I read the online comments attached to the cartoon: some thought it was neither tasteful nor funny; many thought that the topic of abuse was something that had been going on for a while and needed exposure; some thought the depiction was fine. The comments are moderated, so we cannot be sure about what was culled. But, let’s take the evidence as it stands–mixed views.

The Observer today ran a front story entitled Untruths hurt Alpha, relating to the statement issued yesterday by the Sisters of Mercy and featuring pictures of the Minister. That Sisters’ statement, however, never mentioned the Minister, but mentioned “untruths and half-truths” in the press. As is often the way, we are now in a murky world of statements and counter-statements, and the matter may not rest there, but let’s see.

Now, here’s one set of problems. Was the Minister misinformed about what was going on at the school, and to a degree that led her to think it was appropriate to put the school’s action in the context of what she termed a ‘national crisis’? If so, how so misinformed, having met with the school’s officials? If she was not misinformed, are the Sisters hiding something? If so, for what reason? Both the Minister and the Sisters say that the care of children is uppermost in their concerns. How much of that concern is really on display?

PM Portia Simpson-Miller launched a blistering attack on child abusers at the start of the week: “I condemn every attack on any child in this country”. She also laid into those who have children for whom they cannot care or will abuse. 

Collateral damage?
Collateral damage?

Politicians are often working with an election calculus when they act and speak. It’s not clear who the hat fits that the PM is tossing out. It’s not clear who is really the target for the Minister’s position of Alpha in the midst of what she sees as a ‘national crisis’. I hope that child welfare really is the driving force and that the children are not just going to become ‘collateral damage‘.


Power to the people?

Jamaica Public Service, known affectionately by its acronym, JPS, is between a rock and a hard place. It tries to produce electricity and distribute it to a population that wants to use lots of it but too few want to pay. Yesterday, the Office of Utilities Regulation (OUR) began public consultations on a proposed rate hike for the Jamaica Public Service Company Limited (JPS). could see Jamaicans paying an average of 21 per cent increase in electricity bills. The OUR has 90 days from April 7 to respond to the request from the JPS. This will be the first comprehensive review of pricing for JPS since 2009.

JPS said in a media release it is never a good time to ask for an increase, particularly given current economic challenges. You don’t say! The exchange rate depreciation most have experienced in the past 15 months is about the size of the rate increase. President and Chief Executive Officer of the JPS, Kelly Tomblin says the company is using the periodic five-year review to have its pricing structure adjusted to reflect what it has invested to improve its systems, service and reliability. The increase will also enable further investments in building a better company to serve Jamaica’s needs.

JPS is seeking an average 21 percent increase in the price of electricity for residential customers. That’s you and me, buddy. We get stung badly. Why? Small businesses using under 7500 kilowatt-hour of electricity per month will face a 15 percent increase in rates, while it is proposed that the other small businesses receive a reduction of 8 percent in electricity bills. Not fair? Wait on. Large commercial and industrial companies will get a 1.5 percent cut in electricity rates.

JPS is hoping to introduce a lower tariff for low-income customers. “JPS is of the view that charging lower tariffs can increase collection rates and overall revenues from these communities. It also allows communities to establish the habit of paying utility bills, which they will continue as tariffs rise,” said the company. According to the JPS, the programme would also offer improved payment options and “transitional community-upliftment tariffs”–someone really needs to take that phrase out to the woodshed. I get the point, but would ask whether the chances of getting money and lessening theft are really going to be increased. Most people operate on the basis of incentives and risks and rewards. What is the risk of being caught, sentenced, or deprived of power if caught stealing it? If those have not changed, it’s a hard sell to think that somehow people are going to get moral and righteous and dig into pockets that supposedly have little money already and shell out for electricity that they were getting for free.

It’s ironic that we are just passing through a full moon eclipse and could see a red moon. Moonlight is often a good alternative to electricity.

The UK’s Guardian newspaper also published an article today about living off the grid, using renewable sources such as wind and solar power. Not a viable option for Jamaicans, but we all need to think about how to use alternatives.

Off-the-grid living, with solar and wind power
Off-the-grid living, with solar and wind power

Many in Jamaica should wonder why they do not have such options more available. Good question. How about lack of vision? You have 12 hours of sunlight here every day and most of it is used to power precious little. The cost of installation has come down but is still too high for many. Barbados dealt with decades ago, and made tax-breaks part of the change needed.

Some still use the sun and wind to dry their clothes–that’s all I knew most of my life. But, we ‘developed’. In my household, I have a hard time convincing people to not use a clothes drier. Crazy! We need some heads knocking—of politicians for being their usual craven selves, and for people who have not figured out that producing energy with fossil fuels is expensive as well as dirty, and also not using natural solutions that are free and wanting to pay for man-made ones is about a crackpot as it comes.

Basically, we have never been made to face the real costs of our choices. We pay high rates but do not understand how we can get them lower. JPS could be more efficient, and if plans go ahead, Jamaicans will get cheaper electricity in about two years time, if Energy World International’s 381 MW (natural gas) power plant comes up to snuff.

People and businesses who stole electricity were allowed to do so with relative impunity.JPS-ops That’s changed in recent times, but habits die hard, especially when they involve what Jamaicans so love, a bit of freeness. Our informal society thinks nothing of rigging up wires to ‘capture’ the current, and it may be that it involves tapping the lines of another paying customer, who cannot figure out how all efforts to reduce use lead to no change in monthly bills.

JPS have come into our lives a few times for non-payment and were ready to cut us off quick o’clock. That’s odd. You ought to try to keep regular paying customers connected, because they are regular payers; non-payment is an aberration (accidental, usually). Cutting them off quickly while allowing persons to steal without equally fast threat of disconnection is a perverse reaction. I told the contractor to have a think and leave the current alone. He had his orders and was getting ready to cut us off. “My good man,” I said. “What part of ‘leave it alone’ was unclear?” I asked. He muttered. I suggested he call head office. He told me to do it. I did. I told a lady that the bills had been paid regularly each month; I saw the money go out of the bank account. She said she could not see payments. I told her that someone else at JPS must be getting the credit, because the payments to them were not being returned. Silence. Pause. She said she’d look into it.

Bottom line was my wife had set up the payment details but had not changed the account number associated with the previous tenants at the house. (You’d think JPS would have a system that toggled payments to a residence, whatever, rather than to an account number that somehow has to then be ‘reconnected’ to its residential location. But, I’m a bit dense.) After several more calls by She-who-must-be-obeyed and some exchange of emails, the JPS contractor came back to try to disconnect again. “My good man…” More calls. More emails. At last. Cue music. Thanks to the lady who mans the gate to our complex, JPS were not going to get in and cut off anyone just because they had a work order. We have brains and can talk well. So, people listened long enough to allow a simple bureaucratic mistake to get sorted out, and JPS did not have to kneel and pray for payment.

I like to conserve energy, I’m an athlete. I turn off lights. People turn them back on. I cannot understand why the room needs to be lit if it’s empty. Ambiance is too expensive, especially if no one is there. I disconnect phone chargers from outlets when no devices are connected to them. They get replugged. Cheesh! The real problem with saving energy is that most people cannot visualise the costs. If every device had a counter that spun whenever current was passing through it, then you see those iPads, TV, phones, fridges and freezers left open, used better. I cannot blame children who have not had to deal with bills and often do not know how stuff works. But, many adults are as clueless.

JPS has its problem with aging infrastructure. Over the weekend, I read about a Kingston community, Mona, that had buried power cables but these had been laid without insulation and were corroding and causing regular power cuts. Expensive to replace. But, some bright button had a field day in the ‘out to lunch’ thinking that went into that little scheme.

I was driving along just a few days ago and noticing the way that electricity cables are strung across roads, like spun cotton candy in the wind, with most residences having a concrete pillar to ‘catch’ the cable. What a mess! Jamaica probably took its lead from the US, which seems to love this spaghetti arrangement of power supply. There, tree limbs, ice and snow regularly cause trouble and people lose power. In Jamaica, we have hurricanes, but little else seems to bother the wires. Putting them underground is more expensive and so less popular. Our house is supplied with underground cabling, but the development is relatively new.

People understandably wonder how they will bear the higher cost of electricity, when budgets are already straining. The options are simple, though not nice sounding. They curb use and/or make choices about on what else they can spend, or they don’t pay. Not easy, but that’s the choice set. Many people are facing a wage freeze. Freeze prices, too, some yell. Well, grocery prices are not being held constant, other public service costs have also gone up sharply. The plight of the economy is biting every butt hard.

What to do? I will keep walking around my home with my ‘placard’ stating ‘Turn it off!’, and will keep disconnecting when I can. I may have to get a bit rough and switch off a few fuses so that some heavy use appliances stop working. I heard that some people are getting ready to get candles and oil lamps. That’s fine for a lot of people who are more ascetic in their habits. “Oh, the children, wont take that!” kind of cries may come up. Well, you better get your kids wised up about what it takes to run all the stuff they use. Better still, set up a tread mill and get them running to help generate some electricity.

The solar water heater we have is good, and we have all the hot water we need thanks to Brother Sun. We’ve some light-sensitive bulbs in the yard. We have AC, and re-educating some of the household to live without that and use breezes and open windows was not easy, but I think we can check that box. Unlike the US, not all Jamaicans think they need to live in ice boxes. Offices are a problem, as are some stores, but the thermostats are going to have to shift, or some space needs to be made in the wage bills. You know what that means.

Jamaica is in an IMF programme that is about austerity. It does not make JPS raise its tariffs; that’s part of JPS’s own need to raise revenue and survive. But, ‘belt tightening’ is the order of the day in the broadest sense. Yes, it’s not the same when you’ve lived beyond your means and now you have to trim off fat (to mix metaphors) and need to pony up to keep a near-essential service in business. But, the mentality is about the same. You have to save where and when you can. You also need to tackle the waste when and where you can. Your thieving friend is your enemy, and if he happens to be a businessperson, he or she is not less taking food out of your mouth than people in so-called ‘distressed’ communities. It’s about needing to change behaviour. It’s not fun, but it’s also not impossible.












Testimony in honour of the victims of the Rwandan genocide

A very dear friend, Marcel Rudasingwa (head of the UNICEF office in Nairobi, Kenya), posted this testimonial on Facebook yesterday. He has given me permission to reproduce it here. It is powerful and stands on its own merits. Much love goes to Marcel, Monica, and their two new children, Rose and Mico.


A personal testimony in honor of all the victims of the Rwandan genocide against the Tutsi

I survived the Rwandese genocide through luck. I left Rwanda on official mission on April 5th 1994. Twenty-four hours later the killings started. My family was trapped in the genocide. My wife survived but our five children did not. They were killed together with their grandmother, three cousins, an uncle an aunt and over 60 other people.

We learned from eyewitnesses that the carnage occurred on May 20th 1994. Our children: Paul, Edna, Christa, Emmanuella and Benjamin were 12, 10, 8, 6, and 4 when their lives were cut short. My wife and I have heard shocking accounts of what happened. We will never get to know the whole truth of what happened. Our main source of information was from people suspected of complicity or ashamed of doing nothing to avert the slaughter.

It all started in mid April when, more out of desperation than faith, some people gathered for sanctuary at the Central Rwanda Adventist Mission. On 20th May, the mission Treasurer called these people out of their hiding places to allegedly receive rations. They were gathered in my late father-in-law’s backyard located at the entrance to the mission. As though on cue, a jeep full of armed gendarmes (police) sped into the compound as soon as all the people were gathered. To prevent the escape of the powerless group of children, women and mostly elderly men, some of the gendarmes brandished machine guns with bayonets menacingly clamped on them.

One aged Pastor sprung up from the crowd and tried to run. He was shot from the back. To frighten other escape attempts he was left to slowly die a few meters from the crowd.

At about three o’clock in the afternoon, the gendarmes commandeered a school truck from a college neighbouring the mission. About 70 people were huddled onto the truck and transported to their massacre 10 kilometres north of the mission. We are told that as the truck sped to the disastrous destination, meek and shaky voices sang church hymns until the truck stopped on the slopes of an isolated village called Gitovu.

The manner in which our children and the other people were killed was atrocious. One would have expected the gendarmes to shoot them, which would at least quickly end their commission and the victims’ anguish. On the contrary, we are told that the gendarmes incited the villagers gathered around the scene to strip the people and kill them with their machetes and clubs. The gendarmes supervised the butchery that followed. The people were then hastily buried in a shallow rift.

In July 1994 I went to the mission to try and find out what had happened. Ironically, it is the same Treasurer that drove me to the site where our children and the other people were killed. Strong evidence was later established and he was arrested in September 1994. He was later tried by the Gacaca court and freed. 20 years after, we are still waiting for some justice to be done. I say some justice because the mission Treasurer is only one of the suspects. Other suspects are on the run. We expected that through the case of the Treasurer we would know who else was involved.

I take this opportunity of the 20th commemoration of the genocide to share the story of my family. Telling their story is the most significant memorial for them and other victims. Memorials are so that people do not remain ignorant of a tragedy. When people know what happened, they will want to understand why it happened. Trying to understand why genocides happen may yield more questions than answers.

Despite the frustration of too many questions and not enough answers, the search for truth and justice remains for me an inspiration in life. Succumbing to the pangs of my tragedy would be the delight of the perpetrators of the Rwandan genocide against the Tutsi.

In search of the compassionate Jamaicans

I like to think that I am observant. I had a discussion yesterday about whether Jamaicans display compassion, in particular towards strangers and those in need. Put briefly, I said, I saw evidence of it each day. Someone else said “Frankly, I don’t see much of it in Jamaica… that is why our society is the way it is.” In response, I cited some random instances that I had witnessed the day before. My discussant was not convinced. We can both be right. I may see and she may not see. Maybe, for this week, I will go out and search for those random acts, which I think may be useful.

Several days ago, a newspaper reported on a disabled truck that was looted by residents in Mount Rosser.

Disabled truck in Mount Rosser, stripped of its contents and some tyres
Disabled truck in Mount Rosser, stripped of its contents and some tyres

According to the report, ‘By the time the driver could come to his senses, hoards of people descended on the truck and began stripping it of energy drinks, cornflakes and saltfish. When the police arrived on the scene, the truck was almost empty. The looters even removed two of the wheels and emptied the gas from the tank.’ Yesterday, Observer columnist, Mark Wignall, commented on the story, ‘we are, as a nation which ought to be seeking development of our people, facing doom instead’. He noted that we did not get to this point overnight and cited an incident in Kingston in the 1980s. He mentioned that there used to be two distinct Jamaicans–‘The ‘town’ people were more individualistic, while ‘country’ people were naturally prone to kindness and lending assistance to total strangers.’ I had made a similar point in my discussions. Now, Wignall argues, ‘the lines have become blurred and we have melded into worse than the worst’. He tried to retain hope: ‘I clutch at optimism because of the many unsung Jamaicans, many of whom in their quiet ways are giving us pause to see a small but shining light of the possibility of a better day.’ But, it does not last: ‘The reality which puts a brake on that optimism is, when these good people stand up for principle and doing what’s right, the numbers are stacked against them. The politics of the nation is stacked against them.’

I won’t argue against Mr. Wignall’s conclusions; they’re his. First, Mr. Wignall is like me: he sees good people (‘many unsung Jamaicans’ doing things in ‘their quiet ways’. That heartens me, because he’s been in the business of observing Jamaica much longer and more deeply than I have, and we’ve seen the same things. But, using his terms, are the numbers stacked against the good people? That I cannot answer, and it may not be possible to agree or disagree unless we go about counting. I am sure that I can find incidents of bad people to counter the incidents of good people.

Let me step sideways for a moment. When I was the IMF’s resident representative in Guinea, I remember many incidents of disabled or crashed trucks and even passengers killed in crashes being looted by citizens near the incident. My reaction was that this was an indication of the dire poverty that existed, but it was also something else that was about humans’ base instincts. Opportunity was there but was nothing without motive. I never understood what motivated the looting, especially in a society that appeared to have much respect for human life. Most people to whom I spoke were appalled.

But, we know that such incidents are quite widespread worldwide. Sometimes, they occur where a desperately poor population happens to be on the route used to convey much valued goods, often food–aid trucks are common victims, as are commercial food carriers. The operators may use various means to track their convoys and also have the truck secured with armed personnel. We know of places where bandits are operating, looking to rob, rather than loot. Good people turning bad? Were they really that good?

I’m not aware of a country that does not have instances of depraved behaviour. It may be more common in some than others. If I scan the news stream that is coming over my phone, I know I will be regaled with the latest stories of such acts. Voila! A Utah mother charged with the murder of her seven children as newborns, after bodies found in cardboard boxes in the garage of her former home. That’s not normal, and we dread such extremes. Ironically, Utah, home of the Mormon congregation, has a population of 2.9 million, about the same as Jamaica, though is vastly bigger in terms of area.

What triggered the looting in Jamaica? Life had become so desperate? Respect for others become so low? We can speculate. Maybe, someone should poll the residents of Mount Rosser. The problem we have is that, with Mount Rosser clearly in our minds, how would that weigh against something that was good?

The girl who was a good student, who did charity work, but fell foul of the school principal over her way of dressing, and was told to leave the school. Who then left her home to live with relatives far away, trying to earn some money. Who was sought by the school vice principal and urged to return so that she could at least get her graduation credits and qualify for university. Whose tuition had been paid for by friends for the past several years and is still being paid for. Who was somehow kept on track by a combination of good deeds by friends (not strangers, admitted).

I’m not going to demote that action because the girl was known to most of the persons who wanted to help. Giving assistance to complete strangers is one part of a spectrum of kindness; often, we can see a connection, if only in terms of passing or repeated acquaintance even if no direct close knowledge of people. The indigent man in the church graveyard, who’s there every week asking for money to buy food. Maybe, the verger knows his name, but maybe not. Do any of the parishioners? Does it count that I give him or someone else begging for food the soup and sandwich that was handed to me at the ‘fellowship morning’? I see those kind acts, and don’t want to implicate myself in the counting of good deeds.

We know of the windscreen washers on the streets. To some they are a major annoyance, to some they are just part of our urban scene. To some, money will never leave their hands, for others they will pay the $100 for the wash and give something else. I’m not getting into motivation, just acts.

Some see kindness often tinged with danger and mischief. Are people helping young girls and boys because they are sexual predators? Maybe, there are some. But, I can see the potential for an evil notion in everyone I meet, so I don’t know how far I can go if I cast that net over every action. It says something about my fears, not necessarily about the reality that is taking place. Why not see school teachers the same way? That would be awkward.

The economist in me sees the benefit of doing two things that seem to be opposites. One, is to try to catalogue for my own curiosity the random acts of kindness I see. The other, is to try to be structured about my ‘data collection’. I may be able to do both, by standing at the bus terminal at Half Way Tree and just monitoring what goes on for a few hours. My phone camera is often ready but I may have to do more stopping along the road to capture the events. Or, I will be doing some walking around. I may even have to ask some people why they did what I saw them do. I hope that no one takes offence, either at the pictures I may be taking or any questions I may pose.

Now, I’m in danger of tainting my own sample. I am going to head off for some dawn practice. I know I may see some workers at the junction of the main road who will beg for a ride. Sometimes, I give one if I recognize the face, but I also know of incidents where such acts of kindness were met with death. It’s a delicate balance between kindness and risk-taking.

The face of the world has gotten harder. Jamaica is no exception. Were we spoiled by thinking that our face was very soft in the past. All the stories of kindness were real and common. Did the good outnumber the bad? I remember stories of bad deeds being told when I was a young boy in the 1950s. Guns were fewer, knives and machetes were more common. People stole clothes from the line; that happens less today because people hang out clothes less. People stole chickens and fruit and vegetables. Praedial larceny is older than the country as an independent state. We’ve also had bad people around. The seed were there in the past. Were they growing but we did not notice? The 1970s might have been the turning point. Oh, what a decade! Have the bad seeds now grown into trees that outnumber the good plants? I’m going to close my eyes and visualize and say not yet.


The good, the bad, and the ugly (April 13, 2014)–The Thinking Jamaican Edition

Jamaica has some very sharp-witted people. We also have an inordinate number of those termed ‘not the brightest button on the jacket’. Some of our thinking is heavily constrained by certain moral and religious positions that make sense to some but little or no sense to others. We also have a bunch of people who, rather than fess up and acknowledge that they have done something really silly, will sit there and bluster and bluster and wait for the house to be blown over. The saddest part of that is it’s so awfully obvious. Add to it a bit of pomposity and you’ve got yourself the makings of a great interchange. Anyway, let’s have at it.


I will single out JUTC (Jamaica Urban Transport Company) for a series of moves trying to make its segment of the public bus transport market a saner place. Most welcome were the quick measures to stop people throwing stones at buses. The series of attacks on JUTC buses is suspected to be by people thought to be opposed to the reformed sub-franchise bus system introduced by the JUTC on April 1, 2014. JUTC recorded 18 other incidents over two days which left damage estimated at J$2.5 million to a number of the company’s buses. The police have arrested a number of people in connection with the attacks. However, the Joint Coalition of Transport Operators has sought to distance itself from the series of attacks.

The new system for sub-franchise operators took effect on April 1. Under the reformed system sub-franchisees are now required to abide by a new set of regulations which include painting their buses yellow, wear uniforms with clearly displayed identification cards and have route numbers and franchise stickers displayed on the back and front of their vehicles. Order! Accountability! They are also required to pay a fee. According to the operating groups, the sub-franchise fees in some cases have increased from J$280,000 to $756,000. They have been warned that licences will be revoked if the requirements are not adhered to.

JUTC is also going to get heavier with its existing ban on preaching/evangelising on its buses.

It takes all sorts...
It takes all sorts…

It may make for a colourful journey (though I should say that as I’ve not had to deal with it, though recall experiences on the train that used to run across the island, and know it from similar activities in other cities). Jamaica does not have the lock on that. The logic of some pastors/evangelists is that they must spread the word of the Lord wherever and whenever they can. Some of them say we must listen or remove ourselves.

An already tense atmosphere in the process of travelling by bus may get more tense.

For Jamaicans, problems are often obvious and speak for themselves
For Jamaicans, problems are often obvious and speak for themselves


Yesterday morning, I wrote about the strange way that Jamaicans think. I headed out to spend the day at the National Stadium complex, where my daughter was swimming in the Mayberry Investments Prep/Primary Schools Swim Meet. I go the complex each Thursday for my daughter’s swim training; I occasionally go there at the weekends for swim meets or sometimes for track and field events. A few things have struck me about the management of the complex, which is the responsibility of Independence Park Ltd, a government agency under the Office of the Prime Minister. IPL’s mission is ‘to manage the entities under its control as viable facilities ensuring that they are maintained at “world class” standards‘. I imagine that most patrons going to the complex don’t know that mission. I wont speak about the other places managed by IPL. But ‘world class standards’ are eluding them, if we’re talking about high standards.

On the many occasions that I have visited the complex over the past nine months, a few things have struck me.

The flow of people is poorly managed: Parking is provided at the complex, and available in three main areas, but I have never seen a sign indicating the parking areas. In somewhat typical Jamaican fashion, it seems that the notion is that if you’ve been before you’ll know where to go. Except that one area is ‘to the back’ of the Stadium near a community called ‘Nannyville’. Parking is for a fee, usually. I have never seen a posted fee structure. Instead, some ‘security personnel’ man the gates and inform parkers of the tariff. That’s a lot of interaction for each car, which tends to make things slower. It also invites negotiation of various forms: people who think they don’t have to pay (eg those in diplomatic vehicles); those who don’t want to pay; those who will pay but want something else, whether on offer or not. At least one guard spends a lot of time telling people that they cannot enter by the gate marked ‘Main Entrance’, to which many drivers flock, naturally.

When multiple events are being staged, such as yesterday with a major all-day swim meet and a major track event, the parking areas are designated for each event, except no one has bothered to make a sign to indicate that. Look, Jamaicans love to put up sign, and even in our sometimes bad English, it would be easy to write ‘UTech Classic Meet parking here’ or ‘Swim Meet parking via Nannyville entrance’. The result? Minor chaos yesterday morning–that, well before the track meet started at 4pm. People got angry as they found they had to turn away from entering near the main gates, or the front of the stadium, and circle around to Nannyville. Lines were forming at the front and the manoeuvering was getting harder as cars started to “bump up against each other” as one angry woman retold the tale. Probably, made worse because many visitors are not regulars at the complex. The guards seemed to lack a few basics in courtesy (and probably were met with similar by some), and “did not have any manners”, as the lady also retold. Lines to enter via Nannyville started to stretch back a long way: the gate had one guard, who in the absence of a sign that said anything other than ‘No entry’ on one side (closed) was having to handle each driver who had a simple query, “Where do I park?” I got there early and parked easily, but judging by announcements at the pool area for drivers to come to move their cars, which were blocking others, things got a bit tight.

I suggest that IPL review how a few excellent stadiums manage the people and car flows. I won’t tout the US, necessarily, but it’s close and has lots of venues of similar size and layout, albeit in a society that is much more car-oriented.

I don’t know how IPL interacts with other agencies and, therefore, which of these problems come from that interaction not working well. But, if that is part of the problem, I’d hope that the OPM would be able to knock heads together and get the matters sorted out. Funnily, for all the talk about Jamaicans and aggressiveness, there’s an amazingly high level of tolerance for the kind of nonsense that exists at the Stadium complex. That may be part of the problem: we know and accept “that’s how we do it”.


Pride of place has to go to Northern Caribbean University (NCU, for its banning of a student for her part in a cheerleading routine that ‘deviated’ from what was approved (though NCU never vetted the whole routine so it’s not clear what deviation there was from something incomplete–head shaking already). For the record, the team was disqualified and then the summons process began. The proximate problem was that the female student, playing the part of a male groom on top of a wedding cake-simulated pyramid, apparently kissed the hand of the female ‘bride’. She was called to a meeting (I simplify the bureaucratic language), during which she was asked some questions about her personal life (for reasons NCU have deemed no one need know) and handed a two-week suspension from NCU; to this was added a two-year ban from all extra-curricular activities at NCU as a ‘probationary’ measure. Well, some lawyers have had a field day. NCU is a private Seventh Day Adventist institution, but accredited by the University of the West Indies, so has to be consistent with UWI’s overall philosophy, not a law totally unto itself. NCU has also not been as open and clear as it should be. We heard that the student did not show enough ‘remorse’ and that weighed on the punishment. She also attended the meeting with a tongue piercing and without her student ID. Good grief! You’d think someone would either have told her to go get the ID, or given her a ‘temporary pass’. Likewise, if the tongue thingy was so offensive, she could have been told to go to the washroom and remove it before the meeting began in earnest. Too simple? I guess, if you are after pound of flesh.

Many have talked about ‘natural justice’ and punishment fitting the ‘crime’. NCU have not explained why they punished just one of the cheerleading team, and the girl who was on the top, not her supporters. This was not a solo performance, after all. NCU said that another student called to the meeting did not attend. She has not been ‘found’ and hauled before the ‘bailiffs’. They said, when pressed during a television discussion, that investigation are ‘ongoing’, except that no one has been scheduled to any more meetings. All of this coming over a month after the incident. The other students may be ‘in hiding?’, or have run home? NCU surely know who they are. The performance has now featured in videos circulating on YouTube. (Some wags have said the ban should have been for the performance being long and boring.)

People are talking about rules and abiding by them. NCU haven’t actually said what rules were broken, but give the impression that we all know and agree that what happened was terrible (presumably alluding to same-sex relations) and needed to have a student put out of circulation for the rest of her university life, somehow on a probation that is not for review. Sha-Shana James, the student, said on CVM TV that she has no intention of returning to NCU. I wonder why? The school seems to have been a bit knee-jerky and got itself into a least one pickle after another. Take a look at the video of the routine. If the university is about ‘ethos’ etc, you have to wonder why they are getting students to perform cheerleading routines, and ones that start with hip-swinging routines. In this case, they seem to want their (wedding) cake and eat it, too. The amount of onscreen dancing by Charles Evans, who was speaking for NCU on CVM the other night was a little disquieting. NCU has seen only one culprit and have not really sought anyone else. That’s discrimination and they know it and seem to want to play it as something else. But, given that NCU upset some students late last year with  a new policy that makes the absence from the twice weekly chapel assembly punishable by expulsion from the institution, we have to understand that the place is strict. But, strictness and sense are not substitutes. The routine was a depiction, not real. The rationale that a man was too heavy to play the role himself seems reasonable. The troupe did not suddenly collapse in disgust as the final move was played out, suggesting at least tacit approval by all in the troupe. Anyway, enough head shaking.

If NCU has a problem with student’s sexual orientation, then be upfront about that and put it on the table. In that sense, the ‘performance’ is irrelevant. If it’s the performance that is a problem, then deal with the performers in a way that makes sense. Look, I for one wont judge NCU for being consistent in applying its rules, but don’t do this cherry picking and dissembling.

Read Orville Taylor’s take on the incidents. Read also Carolyn Cooper’s accounts of the incidents.