Investment is a word that I’ve seen mentioned a lot today. It’s always good to think about what is being done to ‘build’ for the future.
Many people understand investment as projects–bridges, roads, buildings, etc. Some also understand investment as buying financial assets. Economists have a definition of investment (as opposed to consumption), which focuses on purchasing a good that creates wealth, or provides income in the future, or will increase in value and can be sold for a higher price.
Those are good investments; if the purchase doesn’t create wealth, or declines in value, then it’s a bad investment. This is always relevant when considering how to improve economic conditions, and has been at the heart of much of Jamaica’s problems. Simply put, we have made too many bad investments.
In a nutshell, our horrible debt ratios summarize a series of bad investments. We are not creating enough wealth out of the use of the money to pay back the loans taken. We have not been able to use the money to create enough income to boost the economy so that many more people can have jobs that pay well and help employ more people or buy more goods and services. That’s the cross we now bear. Debt relief would take away the burden of having to settle our account and fulfill our obligations. But, what would we learn about how to make good investment decisions in the future?
If we look around Kingston, we see some recent investment–in roads and beautification to try to impress President Obama. I have a hard time seeing those as good investments, just because they happen to have put smooth new surfaces on roads. Roads for whom, to go where, and do what? That’s the sort of question to ask before I can say it’s a good investment. Just because it’s shiny and new does not make it either useful or effective.
I took a drive through part of our parish that is known as Jamaica’s bread basket, St. Elizabeth. The road to Alligator Pond is not bad. Part of that reflects the interest that the bauxite companies have in keeping the road in good conditions for their trucks. Beyond the areas where they run regularly, the road is pot-holed and uneven. Just because POTUS was not due to go there should not mean that the road is ignored. Priorities didn’t seem set or well thought out.
Choosing where to spend money is one part. We have to also decide how we deal with people’s ability to use the new assets. Technology is not necessarily what holds us back; education is often lacking. In a country like Jamaica, where many people have not been well-educated, that costs us dearly. It makes it harder to get people to understand that new things often mean new behaviour. It’s about a good appreciation of how the environment changes. Here’s a simple example.
We built new highways, taking traffic east-west, and now north-south. The roads cut communities in two. People still had connections on both sides. They used to simply move from one area to another in a straight line, on foot, without a highway in between. Now, the highway is there. Officials think they can help with the need to connect by placing some crossing bridges at certain points along the highway. But, that doesn’t help most people, and is a new-fangled thing. So, they just clamber over a concrete wall and try to cross the highway. Shock, horror. Whether they know they shouldn’t try this isn’t the point. They see their solution in simple terms: the shortest distance between two points is a straight line. Sometimes, the inevitable tragedy occurs.
But, how much money and time are we prepared to put into making sure people both understand and apply what they need to know?
We were told, in a totally unconvincing manner, that crab vendors were removed from Heroes Circle because unsanitary conditions were among the authorities’ concerns. We were told that they would, however, be able to resume selling the day after the president’s visit. What happened? Were the vendors sent on health and hygiene courses while their stalls were in tatters? Did the municipality build toilets or have portable toilets and washing facilities ready for the vendors’ return? Do I hear a resounding ‘No!’?
So, we have double trouble. The road was repaired, but not used for the motorcade. Looks nice, but that seems less than useful. The opportunities to help people do things better than before was put out of the window and officials resumed whistling till it was time to go home, again.
If you drive along the old road from Kingston to Mandeville, via Old Harbour, you see a wonderful piece of how investments have gone in the past: we have our own little ‘roads to nowhere’. We see stretches of roads curving off, left and right, but not connecting to anything. That takes a certain genius. How, the project was stopped that way we can discover, but we have the wonderful sight for our eyes. As examples go, though, funny though ours are, they are far from the worst.
In a nutshell, that too is what Jamaican investment has been about. Wrong place, wrong times, no attention to detail, no investment in people’s ability to function with new stuff.
Dams not replaced, now leaking: Annual water crises. Equipment not replaced and services lacking: Did I hear you say solid waste management? Fire boat not repaired, Ocho Rios blazes. Look around, the place is full of examples. Our lives suffer. Our economy falters. People wonder why foreigners are wary of placing money here? Yes, crime and corruption don’t help, but nor do signs of incompetence.
Why worry about whether we have a logistics hub, when cannot display the ability to do anything logical or manage simple logistics?
One world-class sprinter does not turn us into a nation of gazelles. But, Usain Bolt and Shelly Anne Fraser-Pryce, and our long line of world-class sprinters, show what happens when you place resources (even limited) in the right places (no matter how lowly) and use them well over time. You get returns that far exceed what you put in. Maybe, we should just give the investment funds and portfolio to Steven Francis and Glen Mills. Surely, they wouldn’t use them worse.