The informal economy: killing me softly with its love

Tags

Human relationships, Informal economy, Jamaica

I’ve often thought how many Jamaicans survive because of the informal economy. Working with little or no capital; little or no real costs; income that is not often visible to be taxed; operations without rules and regulations, etc. For many, especially those who have few marketable skills (including a good level of education), it’s the only route to survival. So, whether it’s a vendor stall, or selling steering wheel covers, or just hustling with whatever and wherever, it’s what puts bread on the table and food in the mouth for many. Without stereotyping all that is done informally, we know that such an environment has allowed those in a weak economy to do better than would otherwise be the case. So, for instance, the domestic worker who gets a few days work for cash and manages to see children through school and on to university poses a huge conundrum. Should we seek to curb her options and get her into the formal sector and all its constraints, knowing that doing so may be a hinderance to the good that her practices permit for her family?

Measuring economic activity is not just an exercise in getting things right, it’s also about making sure that policies can be directed at the best characterization of the realities of life.

Why am I thinking of this?

I’ve just made some batches of mango jam, that’s why!

One large mango tree is shedding about 20 mangoes a day and as much as I love eating them, it’s hard to keep up with that flow. Bring in the family to help eat. Still behind. Add mangoes donated. Solution? Preserve and protect. In my case, put them into a blend with water and lime juice and make jam. So, pots got boiling and I managed to make four batches, and turned out 15 jars (of different size). 

The benefit of production are that the volume of mangoes goes down dramatically: 15 jars take up barely one shelf in a fridge, while the equivalent of 4 large mangoes per jar would take up much more space.

Now, I have made the jam for fun, but friends soon got word and fun turned into gifts. Two friends have begged me to sell them some. I had not thought about becoming a mango vendor; maybe, next year.

But, my generosity has done what for Jamaica?

Well, nothing, apparently. GDP will not measure my activity at home, unless by some quirk I get caught in a household survey. My mangoes were free inputs, so no sales show up. I give away the output, so no payments are made, no revenue is generated and no income flows to me. I bought limes. I was given ginger. My use of water and gas will show up, as will the extra work of the fridge, so my utility bill will be a bit higher and STATIN may wonder about the utility consumption spike in June. Hi, guys! 🙂

Friends will send bearers to collect their gifts, so we may see some increase in GDP through service activities. I may exchange some jam for chutney, or other fruit, or some other item I want or need and someone has in abundance. Barter is alive and well. But, the big picture of all this is nowhere to be seen.

Jamaica is better off, if I can be so bold. My jam tastes good! Friends are having better breakfasts and lunches, as far as I can see.

Mango Jam made by @dennisgjones 💜
This is lunch today. Thanks Dennis👍 pic.twitter.com/DiLFnnpoEU

— Carlene Sinclair (@iamcarlenes) June 22, 2017

But, our economy looks stagnant, as ever.

This scene is one that has been repeated for decades and is why Jamaica is a conundrum. Things may be booming in some clear social and economic senses, but never seen in any significant macroeconomic statistics.

Literally, speaking–Redux: media professionals and teachers don’t help

Tags

Economic issues, Education, Literacy, Media, Productivity

When I wrote yesterday, I had in my mind the unacceptably high number of Jamaicans who had not benefitted from learning the fundamentals of the official language. My compassion was driven by what I see in play, daily. Many Jamaicans may not feel burdened, but are at a severe disadvantage within Jamaica and also compared with many abroad when it comes to bidding for jobs. That drag on employment prospects is at the front of my mind. Our high illiteracy is a major impediment to our raising labour productivity.

But, the problem of the general population is worsened by failings in places where we would not expect to see illiteracy or poor grammar on a regular basis–in the education sector and in the mainstream media. We expect teachers to know, and even if not majoring in English, we often assume skills in that area are higher than average; that may be an unfair assumption, however. Likewise, we expect the wordsmiths of our society to be also high on the pole of those who have mastered the official language. But, I find in Jamaica that those are wrong assumptions more often than I think is acceptable. Just look at what hit me at random today:

‘That, essentially, was what was expected to happen in Tivoli Gardens after to 2010 operation to route strongman and gang leader, Christopher Coke.’

That sentence is from today’s Editorial in The Gleaner. Can you spot the errors?

Let me help: ‘after to’ should read ‘after the’; ‘route’ (a course taken) should read ‘rout’ (retreat of defeated unit). 

Is it reasonable that a national media publication produced by people trained in communications should make such mistakes? Who is responsible for quality control? If the quality oversight is poor in the main part of the publication that expresses the paper’s opinions can we expect it to be higher elsewhere in the routine reporting?

I often utter a huge guffaw when various mainstream media practitioners try to argue about the higher quality of mainstream media professionals (often demeaning many who are in the world of newer communications, like bloggers, like me). My reaction is not pure defensiveness–and I do not see pure self-service on their part–but based on the rigour that I had to go through daily in my written and oral communication, and which formed how I always approach what I do. I have no supervisor, so have to rely on a tough attitude towards my own mistakes. I am no saint, but I’m far from a sinner in this area. So, I take great pleasure is find and pointing out the kind of error I saw this morning.

But my pleasure is muted. Those who do not know what is wrong will inevitably repeat that error. Admitted, it’s not realistic for a newspaper to be reprinted. In the world of electronic media, the digital version can be corrected, so The Gleaner online version, which I read earlier this morning could realistically be expected to be corrected later today. I pointed out the errors in the online comments; let’s see what happens.

I got a communication from school yesterday that was full of grammatical howlers; I see them often. But, as the school year comes to an end, I thought it would helpful to gently point out that I thought it reflected poorly on the school. They accepted my point, and pointed out some slips in their quality control. But, I don’t want my child using such communications as their guide, which they will because ‘Teacher knows best’ in the school arena.

If I seem pedantic in these concerns, fine. I have the luxury of being able to spot what’s wrong and also enough sad memories of what it can mean if one lets them go uncorrected.

Literally speaking, language will break us

Tags

Creole languages, Education, Jamaica, Literacy, Patois, Productivity

Every day, in many ways, the same problem stares me in the face: Jamaican illiteracy. My concern with it isn’t just what it says about how poorly we have educated a huge portion of the population. It’s also what it implies for how well we can do things: call that efficiency, productivity, or some other term that tells you how we can be better than other people. Our inability to communicate well at a high level is a brake (not break) on our progress. When I see people sitting idly on street corners and think about how bad our unemployment levels and rates are, I also have to ask how will their situation change if the economy were to grow very fast and the demand for labour rise rapidly. More jobs are being created in the realm of information management than in the area of manual labour. These are not people who seem to be ready for training in new skills in the information sector; they can do merely simple tasks like ‘heavy lifting’ and ‘fetching and carrying’. If you cannot read and write, and process information and share it effectively, you are destined for a new scrap heap of long-term unemployment. (Our crime rates are one of the outcomes of people who CANNOT find work, even if they are WILLING to work.)

Funnily (as in oddly, not amusingly), technology has rendered more powerful many illiterate people because they can use keyboards to form letters and words they cannot form by hand and they can live in a world where the forms of expressions have become a bit elastic and less rigid. If I write IMHO, I do not need to know how to write ‘in my humble opinion’ and can cover my embarrassment of not know how to spell words like ‘humble’ and ‘opinion’.  They can communicate for and wide without encountering anyone who has to handle their communication. Such people can at least read, and have had writing made much less difficult. That’s a plus, but it cannot get through all situations.

I have been in enough situations where someone has asked me to fill out a form for them (often on a plane headed to the USA), or to read something (like tags on a key) so that they can proceed to do a simple task. When you have a bunch of keys but cannot distinguish the labels for which doors they open you are in deep trouble. But, these are common place problems. Expand that to people not being able to read and understand the labelling on almost every building. Scary!

Whatever official data may indicate, many Jamaicans cannot read and write English well. On the one hand, this is easy to understand: most Jamaicans don’t speak English; at best, it’s a second language. Patois, our national way of speaking, though based on English, is often not the same. In addition, it’s mainly oral and that’s where we start to have trouble, both orally and literally, if we try to write: our basic way of communicating isn’t well-codified. (I say well because in some other territories, where ‘creole languages’ like Patois is spoken, it is codified, as in the Seychelles, where it is taught in school and used in written form in formal communication.) So, we do not put a premium on spelling rules (even in Patois) or even writing.

There’s no point arguing about whether or not Patois is a language. The fact remains that it’s how most Jamaicans communicate. That’s well understood by business, who try to use it in basic marketing because it has much better chance of reaching a wider audience. The bottom line tun up!

But, let’s look at what we are facing, taking a simple example situation. A man is dealing with a bundle of things. A Jamaican may say “Is bungle him bungle it up.” (He bundled it up.) Now, a non-Jamaican would likely already be confused on hearing this, if he or she knew the two different words bungle (mess up) and bundle (collection of things). If an ordinary (non-literate) Jamaican had to write about the event, bungle would be written for bundle. Literate English speakers would read it and go down the wrong path, imagining a minor catastrophe instead of something uneventful. If a literate Jamaican saw the event and wrote about it, he/she would likely use the right word, bundle. (I say ‘likely’ because it’s well understood that people who are literate and well-educated may still mistake words, and English is full of words that either sound alike or nearly alike and sometimes trip people up. For example, the famous group of there, they’re, their.)

That was just an example to set the ball rolling. Amplify and multiply this situation across the country and you can get a real bundle of bungling as people try to describe what is going on and others try to understand what they are being told.

Though very much part of this whole problem, I am going to put to one side those many people who cannot read. They may be able to write, but have no real idea of the rules to apply so add confusion from the oral level to the written level that they cannot understand or fix. Just to give an example, I got a message about some work at my father’s house; it came with no punctuation. Problem one. It then used words wrongly, such as ‘fine’ for find. Thankfully, I know the context and can get past some of that. But, when I read ‘fix it is cheper so I tell him to fix cut out the bad part the part new…’ I stumbled and fell.

I leave out this group because, although they are important and help the country function, they need a special fix that may be too big a leap as it requires going all the way back to basic schooling, and seems less likely to happen than most other things. In this wonderous age of technology, I hope that an app can be developed that makes all of this inability to write correctly when you cannot read a problem of the distant past.

People like me make this language and communication problem worse. Why? I understand well and speak well, but I do not speak like most locals and use words in ways that are not familiar: I speak in standard English learned in England. My accent is flat. So, another simple example. I call someone and say “My name is Dennis Jones (pronounced ‘day-nis jon-es’).” I often get some reaction that suggests the name doesn’t register, and am asked to repeat. I do. Then the other person’s brain does its recomputation and comes back with you said ‘Den-ize Joe-nez?’ When I try to write the phonetic differences you get a sense of the differences between a Jamaican accent and a regular English accent. (So, I’m not even going into how my Patois renditions sound.) Again, extend this example into a day’s worth of communicating with people and you can see that patience will be running thin by day’s end, at least at my end. If I go on and start to talk about why I am calling, we get the problems multiplying and rippling far and wide. I try to make things easier by using simpler language, but that won’t matter if every syllable I use needs to be reformulated. My conversations in Jamaica, especially over the phone, can be amusing. 🙂

Now, I said that Patois was one part of the problem. The other is the simple fact that people did not learn or were not taught the right rules of English, and English is HARD. I am not going to give a course now, but warn that even the best-educated can get into fights about correct English and its usage. However, I will just trot out a few of the well-known trip wires from words that sound alike, but have completely different meanings (and I add a few where the Jamaican way of speaking makes for a similarity that may not exist elsewhere):

• fear, fair, fare (both fair and fare have several meanings, too)
• they’re, there, their
• three, tree
• hair, here
• know, no
• come, calm, comb
• have, half, halve, of, off (I often see ‘I would of (have)‘, ‘prices half of (off)’.)
• breath, breathe, breed

We have the problems that come from the use of punctuation, especially the apostrophe:

• its, it’s (not its’)
• theirs (not their’s), there’s, they’re his
• his, he’s, hes (as opposed to ‘shes’)

I wont go on, because I think you see where I want to go.

These trip wires take as victims even our revered media houses, who daily offer more insights into poor teaching than seems acceptable.

For Jamaica, this problem is not at the margins of our lives, but deeply embedded into all of its fabric. Because we have so many forms of informal activity, we take for granted that rules are not going to bind. So, in this context, we find that signs and other evidence of formal existence may be literally hand-made and not subject to any kind of review of regulation:

‘Tree cuting‘ states the sign, proudly, with the words in black and 8 inches high on a white background. There’s no spell-checker in play. The rules about doubling consonants never known.

Sadly, the answer is not in what we teach, but how. It’s too sweeping to say that many of the teachers are not much better than those whom they seek to teach, but it’s clear that many teachers are not effective. Teaching, as a profession, cannot blame the students for the low levels of achievement; different ways have to be found to get the material better understood. If it’s one-size-fits-all, then less success is baked into the cake. Rote learning is still popular in Jamaica; it doesn’t work for many, especially once a student disengages. If we could get by without words and just exist with pictures and images, many more Jamaicans would flourish. But, the world isn’t set up that way.

Jamaica is very good at hailing its students who excel, while paying little attention to the masses who do poorly in our education system. Those poor performers become the core of our workforce, and so must matter to how well we do as an economy, driven by its lowest common denominator. I thought yesterday that more and more Jamaicans do not know what a steady job is, other than to be a roadside vendor or to hope that someone gives them casual work. That can’t be a strong basis on which to build a faster growing economy.

Explaining government (economic) policies is too important to be left to government: EPOC, EGC & CaPRI show why

Tags

CaPRI, Economic Growth Council, Economic policies, EPOC, Governance, IMF, Public consultation

I was struck by an Editorial in The Gleaner on May 23, ‘Good Initiative, Mr Duncan, But …‘ noting (my emphasis) that Keith Duncan, co-chair of the Economic Policy Oversight Committee ‘has taken his show on the road. He is on an education exercise, going into communities, attempting to break down the seemingly arcane ideas of finance into the language of the people and show the relationship between achieving the IMF targets and people’s live.

The Editorial noted that many more Jamaicans that would have been the case otherwise will have a better understanding of the targets the government is committed to achieve under the IMF programme. That should make for better buy-in from the nation.

But, the Editorial saw ‘a risk, should he not be careful, of the blurring of the lines between the committee’s job of monitoring performance, based on the empirical analysis of a specific set of data, and the responsibility of political leaders to enunciate policy and explain to constituents the basis on which competing priorities are resolved.’ Further, the Editorial argued ‘Mr Duncan should be wary of being perceived as usurping the role of Government. We are quite happy with policing the implementation of the programme, rather than being drawn into social engineering.’

My view is this perceived risk is that it is not that great. Many agencies and commentators can and will attempt to help others understand what government is doing, and their stipulated roles are usually kept fully in view. If there are issues in certain interpretations, part of a good democracy would be that government can express its displeasure, if it amounts to that, or conversely express its thanks because sometimes others are better at the process of explaining policies. In fact, that’s one of the key features of a free press/media. Also, government’s explanations of what it is purporting to do can often be self-serving, not least because politicians like to give the best impression of what they do, seeking to extract credit and minimize blame.

Today, I spoke on this topic on Facebook live. You can watch the video here: https://www.facebook.com/dennisjonesasiseeit/posts/1386788341414056

During the talk, I drew attention to the other recent attempts to explain better parts of government economic policies, as undertaken by the Economic Growth Council through its public forums, and the think tank, Caribbean Policy Research Institute (CaPRI), with its recent public forums (on the 2017-18 Budget and this week on ‘Strenthening Integrity through Innovation’). All of these events try to draw the public more closely ‘into the tent’ and be part of the dialogues that are going on.

My view mirrors that expressed by educator and advocate Carol Narcisse:

“The economic programme is not going to be successful if we the people don’t understand it, don’t participate in it, don’t think it is a good thing, don’t see how it is going to benefit us, and if we don’t have an equitable way in which to both participate and benefit from the results of it.”

I would agree, also, with the complementary view she expressed: ‘EPOC going ‘On the Corner’ is an example of participatory democracy and is an extension of its responsibility to provide oversight.’

Credit to The Gleaner, who introduced the ‘On the Corner’ series, in the lead-up to the 2007 general election. A cynic might wonder if The Gleaner Editorial was not being somewhat disingenuous, in that the role of explaining policies and many other elements of government is often a function well performed by the media, and The Gleaner might really be seen as trying to protect a little of its own turf. But, surely, they wouldn’t be doing that, now, would they? Would they? 🙂

It’s not the economy, stupid! It’s the people?

Tags

Caribbean, Corruption, Culture, Economic policy, Governance, Human relationships

Once in my working life at the Bank of England I had responsibility for a team that looked at economic development in English-speaking Caribbean countries. I got into a professional bind by arguing, against the official policy line that devaluation was to be supported as a way of easing Jamaica out of its economic woes. I argued, based on my understanding of how Jamaica had worked for decades, that while one side of the devaluation equation worked, the economy was titled in a way that meant the gains would go out on the other side: we imported more than we exported and the balance of that meant higher net costs but without the needed gains that could come from a more competitive exchange rate; we also had lots of tied contracts in bauxite that were not sensitive to exchange rate changes. My other reasons were based on ‘cultural senses’ that Jamaicans were not going to change habits fast enough to make exchange rate shifts work quickly; that was part of the truth but also reflected that fact that jinnalship meant Jamaicans were as likely to find ways around the change, eg by making use of remittances more (which, being in foreign exchange, meant full protection). I did not win the internal debate at the Bank, and my career did not tailspin. Fast forward.

Jamaica has done what many economists would see as the ‘right thing’ in recent years in dealing with the long-standing issue of a bloated fiscal deficit and its debt burden. Now, that improvement can be an important necessary condition, but is not sufficient, to use economics jargon. It’s also allowed the exchange rate to be ‘flexible’, or depreciate in visible terms. 

What economic policies are supposed to do is to change the way that ‘economic agents’ operate, based on certain assumptions about behaviour. What has so often been the problem with Jamaica (and many other countries) is understanding how people react and if they react in unexpected ways, how to taper policies so that the desired effects are still achieved. 

One thing certain about curbing fiscal excesses is that less money will slosh around between political powers and private people: that’s simple maths. That squeeze may have some negative economic effect, but it may be less if the previous beneficiaries find other ways to operate and make money. 

Similarly, with the exchange rate depreciation, significant numbers of people and businessmen are not totally exposed and can draw on foreign exchange buffers or substitute domestic items for imports enough to get by. 

The problem with all of this is that some of the things needed to change economic behaviour are not in the hands of economic policy makers. 

A simple example. Interest rates are meant to offer incentives to save (and by extension, to spend). Now, if people are fearful of banks (for whatever reasons) changing interest rates in the banking system does not affect behaviour much because people stay away from the system where interest rates matter. So, one of the first steps in this instance is to get over people’s fears and dislike of banks and other financial institutions. That is a matter of education and life experiences; the life experiences may have deeper roots than education can uproot, so it’s a hard battle to just ‘teach’ people about the benefits of banks. No sooner have the lessons been learned than a ‘disaster’ occurs when many people (and friends) lose money deposited in banks. The old suspicions resurface and new fears arise. So, the battle is nearly or totally lost. However, economic policy makers have few tools, of which interest rates are one. Stuck.

When I look closely at Jamaica, I’m as perplexed as I ever was why somethings don’t change or change at the pace at which a snail sprints. I have to wonder if it’s something engrained, like ‘in the water’ or ‘in our food’, which are sort of intangibles.  So, in that vein, is it ‘in the people’? 

All the macroeconomics are undone easily by a microeconomic set-up that does not correspond well to many standard ways of thinking about economics. Part of me sees this as a curse, but it has also been a boon.

The curse is that all the pulling of the macroeconomic levers don’t give the expected results. We know this, for sure, in Jamaica! The good part is that Jamaicans have found ways to overcome economic ‘problems’ and found many different ways to ‘survive’. Now, a key part of that survival is about not staying within all the legal lines that exist. That is one of the binds that stop me clapping every time I think about how Jamaica has not imploded. If the world were full of ‘wild West’ countries and anarchy was the mark of success, then Jamaica would be hailed, I’m sure. 

What is more puzzling to me over recent times, as I’ve had more chance to see life lived in Jamaica, is how many of the microeconomic quirks are not restricted to any social class. We’ve carved out a way of life that makes the most wealthy and best educated less different from those at the other end of the scale than wide wealth and education differences usually mean.

Monetary gains and losses do drive how Jamaican people act but in some odd ways:

• Businesses do not strive to be the best as a way of ensuring their financial success; many are content to just do what they do; customers like it or lump it. This is not abnormal in many economies, but usually means the demise of enterprises. That is not the case in Jamaica, which means that businesses must be surviving WITHOUT business.
• Time is (near) meaningless: if time is money in most people’s minds, it doesn’t have that connotation for many Jamaicans. (It’s one way of rationalizing why Jamaicans don’t see timeliness as important, because they have somehow given time zero value. As a fellow blogger pointed out to me today, saying ‘7.05’ means ‘sometime before 8’ to a Jamaican 🙂 ) But, economically, if money doesn’t matter (in the normal flow of events) then value must have ways of being preserved that are not apparent.
• Attention spans are short, but ‘memories’ are long. Many Jamaicans will have ‘ready reactions’ to any phenomenon, but barely want to analyse what is really going on. (This is reflected in the way that ‘news’ and ‘events’ are reported–much of the ‘What’ and little of the ‘Why’.)Many Jamaicans live with the illusion of things being better in the past–despite lots of evidence to the contrary or no means of really comparing. What’s funny about that is that people will talk about the ‘good old days’ but do nothing (much) to recreate those times. I’ve yet to see a Jamaican ready to give up the motor vehicle, access to running water and (near) constant electricity, or the telephones, as part of the step back in time that is needed 🙂
• Distortion is the norm. At its worst, this is all about corruption. Transparency International defines this as: ‘Corruption is the abuse of entrusted power for private gain. It can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.’ The Merriam-Webster Dictionary puts it more simply: ‘dishonest or illegal behavior especially by powerful people (such as government officials or police officers): the act of corrupting someone or something.’ My take is that ‘powerful’ has to be scaled down to include anyone who has influence over others, which means that many more are actually in the position to be corrupt and do corrupt things. The fact that the deeds are common or long-standing doesn’t change their nature. This is something that the integrity of Jamaicans often does not understand or accept. 

The first three bullets point to the impact of ‘hidden economic activity’ that may be a principal or not trivial part of many people’s lives. I hope the economic logic of that is clear. The last bullet is different, as it points squarely to what ‘government’ does, more than other parts of the economy. It bothers me more than other things, because we have a country where many monetary flows are opaque, at the level of government, where transparency and accountability are supposedly built-in to protect ‘the people’. Without dredging through Archives we find too many stories such as reported last week about hay: Millions Down The Drain In Hay Project. The extracts say enough: 

• ‘…financial mismanagement and lax oversight uncovered…
• ‘In reference to the proposed revenue that was forecast, the project revenue is at a deficit of -$17,492,750,’ the auditors wrote…’At Bodles, they reported that no records were being maintained for the production of hay between April 2014 and December 2015. For the first six months of 2016, the audit found that 1,329 bales of hay were produced at both facilities, compared to a projected 54,000 bales.’

The average Jamaican lives with the sense that government is full of corruption and reacts with feigned or little surprise at stories such as these. The real surprise is really that such ‘malfeasance’ goes on undetected in many realms and for extended periods. But, as I’ve said before, corruption is so entrenched that its total beneficiaries are far more numerous than those who are not. If you don’t believe in ‘trickle down’ economics, then you wont understand how the ‘feeding tree’ of Jamaica misappropriation of public funds works. Everyone gets to eat because of someone taking money that is not truly theirs to distribute. To break that system is to break the society. 

In that sense, our pervasive corruption is worse, in my eyes, than the corruption often seen elsewhere, where a very limited pool of ‘elites’ benefit. In Jamaica, almost everyone’s life depends on it. 

Institutions like the IMF know that it’s not just the economic policy levers that need to be turned to fix the economy. However, the Fund cannot enforce changes in areas outside its mandate. Its structural policies must still stay within its ambit, so it tries to go to the limits but cannot go further. To get the whole of a country change economically requires a government to be committed to putting in place a wide swathe of policy changes that go in the same direction as the desired economic policy. In other words, it must have complentatry meaures to support the economic ones. Government must also fix itself by weaning itself away from some or all of its bad habits, such as evidenced by the ‘hay project’ fiasco. That is much harder than may appear in countries like Jamaica, where (as I have said, repeatedly) have built themselves on ‘rent-seeking’ behaviour. That has to stop and maybe unwound. Like taking out a thorn, it cannot be done without pain (real, imagined, or both). 

Government ‘fixing’ itself is both direct and exemplary: how many countries can progress if government is seen to practice things it says it is against? Also, government must change first and fast.

Jamaica is not alone is struggling to get its economic act together. Jamaica is also not alone in terms of countries that have struggled economically then made a major forward turn. However, it takes time, consensus, and coherence in policies. 

Getting the macroeconomy right is only a step on this journey, rather than the journey, itself. I’m not sure Jamaicans understand that. 

Robot taxis: more grey than checkered life

Tags

Jamaica, Urban transport

Jamaica has a poor record in providing facilities for those with disabilities. For that reason, I am wondering how we can help those who have vision problems to see better.

Jamaica has a form of unauthorized taxis, called ‘robots’, locally. Their discerning feature is that they carry fare-paying passengers, without the requisite registrations, including a highly visible red license plate. They are also often easy to see (if you are not visually impaired) as their drivers often hang a hand out of the window with a wad of bills (fares taken) or pointing in the general direction they are headed. At various points along roads, usually at well-known stopping points for passengers, i.e. at a corner, these cars can be seen waiting or loading passengers and their wares. But, clearly, they are not as visible as I think. The police do not seem to notice them, so they are rarely stopped from doing their business. That’s, actually, not a bad thing for the Jamaican travelling public. It’s clear that the demand for public transport is excessive. In the Kingston corporate area, where there is a government-owned bus service, buses are often jammed packed, especially during rush hours. Registered taxis are also often full, and they operate as ride sharing vehicles, not for single riders. Robots fill a gap in terms of the overall demand, but also in tailoring rides to those who do not want to share. Jamaica does not have Uber, but we have some ‘on demand’ taxi services. Robots also eat into that business, but that too is to the benefit of the traveler. Example.

My car has a leaking transmission and is ‘on vacation’ at the service station. (In somewhat typical Jamaican fashion, I had been asked if I was going to take it home, even though the service provider did not advise that I drive the car 🙂 ) Fortunately, my transport needs are not many–I’m a ‘taxi service’ for my teenager during the weekday afternoons, mainly. I love it! I also have some needs to visit my father mid-island, and I need to get to golf courses to practise and play. With my car in dock, I was fortunate that my daughter had just started her spring break, so my ‘taxi’ duties were done. But, my other needs remained.

At the weekend, my wife had told me to “take a taxi” when I needed to make a 6.30 start time in a golf tournament. I got the number of a registered taxi and he picked me up at 5.30 and I was at the golf course in plenty of time. I thought the fare a bit steep, but beggars can’t be choosers. Yesterday, I needed to make another appointment. I called the Saturday taxi man again; no reply, after 3 attempts and some voice messages. My housekeeper gave me another number and I called it; within seconds I had arranged my ride for 1.15. At 1.10 a car arrived at my house and I went to get in. It had no taxi markings and no red plates. “Oh, you’re a robot?” I asked. Not really, the driver told me: “I don’t run up and down looking for passengers; I give people rides from the supermarket and such.” I thought about the distinctions. He got a call as I got in; it was his daughter: “Mummy’s pressure’s high and I just took her to the doctor. I’ll reach you soon.” He explained that his wife was both diabetic and suffering from high blood pressure; she’d had problems at the weekend needed medicine, and maybe a reaction to that her pressure had shot up. He said he’d get his daughter from the university, once he’d dropped me at my destination. We chatted on the way there. He was from a district close to my father’s original area. I got to my destination in good time, and took the driver’s phone number in case I needed a ride home and he was free. I wished him and his family well.

As it was, I got a ride home with one of the people with whom I had had to work. On the way home, she needed gas and was searching for cash. I offered to pay. She refused. I pondered the difference between my paying for gas, for a ride offered by a friend, and the fare charged by the taxi driver who’d taken me earlier. I could easily categorize each driver as someone ‘doing a favour’ to an acquaintance of a ride in their vehicle. It looked more grey than black and white. The whole realm of ride sharing is that way, if money gets involved. I didn’t make any judgements.

One man, eking out a living. Wife sick. Daughter at university. Life to live. Futures to protect.

Running a taxi service comes with obligations and usually has insurance and other features to protect riders, such as verification of drivers and their records. Registration of the activity should be with those features in place…but are they always? If a friend passes me on the road and offers me a ride, do I stop to check that his/her insurance is fully in order or that he/she has no traffic violations outstanding? Never, is quite likely. Take a risk? We do it all the time.

The Transport Minister is going to expand taxi routes, I read this morning, and open up another 2500 licences.

The taxi industry in Jamaica is not pure. It’s known to have many owners who are police officers. That partly explains some of the ‘blindness’.

If we had Uber or its equivalent, we’d have legitimized our ‘robots’. Many people (other than registered taxi businesses) think ride-sharing services like Uber are the best thing since sliced Easter bun. Funny place, the world.

Jamaica diving headlong again to the bottom? Offshore oil? What for?

Tags

Energy issues, Governance, Oil exploration, Political issues, Renewable energy

Some days all I do all day is think; it’s extremely taxing, and occasionally not at all fruitful. It leads to some quite startling and disturbing insights. One such came to me today–not for the first time: education does not stop you doing foolish things. The motive forces that govern actions are much stronger than the sense to avoid trouble.

So, much of this week one piece of news had me bothered…really bothered. I read that Jamaica was intensifying research to discover offshore oil–Authorities step up search for oil offshore Jamaica. Now, this is not a piece of news that was unearthed from the archives of the 1960s or 1970s; it was fresh, this week. Now, age has made me a little sleepier than I used to be, and though my father turned 88 this week, his brain cells are still working well, and so are mine. So, in words that my father would relate to, ‘What the f**t di peeple dem a t’ink?’

So, I  am not even going to wonder if the assurances that the fishing grounds where exploration will occur will be damaged. I wont wonder what the payoff will be from this research and if it suggests exploitable reserves exist. I wont think if that exploitation will lead to jobs, for whom and for how long. I wont think about from where the substantial pool of investment funds will come. I wont think about controlling the revenues from such exploitation and how countries have struggled to manage revenue sources that are known to be finite, and thus unsustainable. Historically, we are closer in governance practices to Nigeria than to Norway. Got the point!

All I will do is ask ‘Isn’t the future in exploiting renewable energy sources’? Economic progress efforts that seek to exploit assets with limited life are doomed to encounter problems. How many centuries of experience and evidence do we need to understand that?

I will mention three words: sun, wind, water. These basic life elements will sustain us for longer than most of us can even romantically estimate.

As one of many countries that have had a serial aversion to exploiting simple solutions to deep-seated problems, Jamaica, once again, seems to be heading to the podium of medal contenders in this ‘race’ to the bottom. 

Facing challenges: CaPRI goes out of the box to explain Budget 2017-18

Tags

Budget 2017/18, Communications, Jamaica, Public policy

I was in the pleasant company, over dinner midweek, of a varied groups of mainly Jamaicans, both old and young (my daughter was there), and some living locally and some living mainly abroad. We got into talking about ‘having it’ and what that meant and if it had been achieved. I said I ‘had it all’ and went on to explain that it was partly a question of money that I had accumulated during my life–though this was by no means mega millions–but did have the benefit of not really having to think about a budget every day, something that I had to do for many years. That’s not to say that I am not frugal: I am ‘mean’ like star apple! It also goes to the nature of personal contentment, and over time, I have tried to stop striving. It helps that I retired on a good pension. My wife still has a paid job and between the two of us our daily needs are well covered, financially. But, I get contentment from being able to use my time to satisfy my needs, and most of those are simple: Can I go walking when I want? Can I travel if I want? Is my life free of deadline? Can I say no to requests? Can I choose to help when I want to? And so on. I prize my liberty and am loath to give it up. For that reason, I am leery of nice-sounding attempts to get me to ‘do things’. Again, don’t get me wrong. I love to volunteer, but that means I decide, not someone else, when and where I send my energies, because I want to give fully when I give. Done!

I also mentioned that, for me, the greatest challenge in life now is to help people do things that they say the cannot. For some people that’s a simple nudge or helping hand to get started with something, often a clearly expressed desire that somehow has stalled. For others, it means breaking down a many-layered wall of resistance that has been built over time and reinforced, often by things that are not that rational–so fear has taken hold.

Simple example: the friend who hosted the dinner wanted to get back into golf. She had played a little, with lessons, etc, but an injury set her back badly. Coming back was both a physical and mental problem because the fear of a flare-up of the injury was there and the origin of the injury had deeper health risks. So, I offered to get her started again, gently, by having a session with a few clubs in my back yard. She did great and we spent about 90 minutes swinging gently. As I coach, I explained that I always like to end a session on a positive note, so when she took a good swing, connected well, and the ball pinged off one of the avocado pears on the tree in front of her, I said “Time to stop!” However, some of her previous health issues recurred and she’s not come back. But, she’s promised to do so, and needs to upgrade her equipment to remove their state of ‘disrepair’ as a cause of not resuming. Watch this space!

Another example is a high schooler who swims for the same club as my daughter who is ‘learning’ French. I put him under pressure by insisting on speaking French whenever we meet. My basic point is that he needs to free his vocal chords and get French words flowing naturally, without concern about correctness–that latter part we can fix. In other words, he needs to be like a toddler learning and babbling and not necessarily being coherent. It’s working, to a degree, and he’s less intimidated by the process now, but is still thinking too much. I speak at normal speed, first. Then, if he’s struggling, I slow it down to help him hear the words better as separate sets of sounds; fluent speakers elide a lot of words, so ‘la plume de ma tante’ can sound like ‘laplumdemataunt’ and it’s not obvious what are the separate words.

But, a bigger challenge is getting people to understand basic things about the world they live in. I am not a paid teacher, but I am someone who has often been a giver of instructions.

One of the huge challenges is just a language barrier–like with the French student. So, many people do not have the vocabulary for subjects, let alone the ability to understand what the words could mean. So, many attempts at teaching pass from teacher above head of student. In the class room that happens often at the start of a topic, but gets less as the topic is explored. However, in life, that lack of understanding can be near permanent. Add to that the fact that we do not speak alike. That is a huge problem in places like Jamaica, where the language of many ordinary people is not the language of many of those with so-called ‘high levels of knowledge’. People rale about Patois not being a language because one cannot automatically discuss all topics in that ‘tongue’. But, for things like a lot of economics, it can be done.

So, I was fascinated to see last night how an attempt to bring such knowledge out of the dark realm of ‘mystery’ into the light would work. Our national budget is about what we try to do with what we have (a variation on ‘having it’) and shifting around the resources is one of our big challenges, which honestly we often don’t do that well.

CaPRI, The Caribbean Policy Research Institute, put on a public forum, ‘Money Talks’ What does the new budget really tell you? in the open air of Mandela Park, in the heart of Kingston, Half Way Tree (HWT), at 6pm, plumb in the middle of evening rush hour. The topic was the recent Budget, and what it meant for the nation. Heady stuff. Well, no surprise, HWT was its usual hopping self, with taxis fighting to grab people and space, and street vendors trying to deny space and take people’s money, all at the same time and mostly in the same space. Let’s call that the hustle and bustle of Kingston. In the midst of that was a set up for the live event. In typical Jamaican fashion, the event was being animated by music. Nice vibes.

The event began a little late, but mainly because the MC wanted people to come closer, as ‘they do in church’. But, it was a forlorn attempt: it’s a thoroughfare and if people are reluctant to move from the outer edges by the walls, so be it–the need was for listening, not closeness 🙂

If this could be any prettier…

The event got underway with some pleasant words from a European Union official, as the EU is a major funder for CaPRI. He was followed by the main presenter, Dr. Damien King, was is a co-director and also head of the department of economics at UWI, Mona. One of Damien’s great traits is that he speaks clearly about economics and uses terms that are usually easy to grasp. So, he began talking about esoteric things such as the debt/GDP ratio, but had it illustration as a large mountain of money, and explained that its being 147% in 2012 meant that every Jamaican needed to work for no pay for a year and a half. Clear as a bell! So, it went on as he covered the broad set of measures of the budget, which I wont repeat here. The crowd, about 70 people seated and others around the edges, was absorbed and attentive. He simplified things and made some clear statements about the important matter of how does the budget affect each of us–a matter of personal circumstances and lifestyle.

Nice, simple graphics: a picture says a 1000 words

So, Dr. King has grappled with the challenge of making the budget more accessible to the public.

Now, getting the eyes and ears of fewer than a hundred people is obviously not the same as getting that attention from tens of thousands or even a million or more, but it’s a start, especially if everyone reaches one more, and like the multiplier in economics, gets the word spread by word of mouth.

So, I applaud CaPRI for this venture and hope that others in the domain of public policy see the need to get out from the contented position of ‘doing it the old way’ to doing it a way that is effective. I also like that it fits with my recent suggestion on this blog of a need for a non-partisan debate on the budget–it’s too important to leave to baying politicians. The CaPRI team did well to give people many of the building blocks to understand what the budget means overall, and to each of us, personally.

One of the ways that public policy is being better explained is through the use of social media, and I also applaud the Government and in part the Opposition for grasping this and using platforms such as Twitter and Facebook and Instagram to get out messages, but there’s a place still for live, in your face interaction, I must admit. Let’s hope to see more things like this. Some will see the similarity with ‘TED talks’ and if that helps then so be it. Take this approach to the clubs, to the beach, to the National Stadium…to the world!

Jamaica needs a non-partisan national budget debate

Tags

Fiscal policy, Governance, Jamaica, Political issues

Jamaica is in the midst of an annual ritual, with its politicians arguing about the national budget presented to the country by the finance minister, then initially criticised by the Opposition spokesman on finance. Others then join in the debate. Outside of Parliament, some ‘experts’ discuss what has been presented openly–on television or radio, or in the pages of national newspapers, or in the social media spaces that now exist. It’s possible to get an idea of all of that discussion, but you’d be somewhat superhuman if you managed to do that. Outside Parliament, we also know that many people argue over the measures and the things that have not been done, and some will do their own calculations of how they will be affected. Some, will wonder what has been done, but not have much capability to make sense of it all, either nationally or even in their personal circumstances. Some also have no interest in any of this, and just wish the ‘noise’ would stop so that they could get on with life: they live with the measures and suffer or gain in silence.

But, one of the things that happens a lot in Jamaica is that much of the discussion that goes on happens with the tinge of political bias deeply ingrained in the views expressed. We need to stop that!

Over the weekend, I had an article published with my brief views on the latest budget. But, I also spent some time thinking about measures that could have been made. Some people react to those who criticise the budget presentation by saying ‘Show us your plans!’. I commented that this is empty rhetoric: national budgets reflect national priorities, so if say the Opposition were to present its plan, it would reflect its priorities. Those need not intersect with the priorities of the government of the day, so we may not have anything that is truly comparable. But, what I think would be useful would be to have a better idea of what certain well-defined options could mean for the country. Let me explain.

Governments often try to get tax revenue from what we may see as ‘low-hanging fruit’, often ‘sin’ taxes–adding levies on things such as alcohol and tobacco products. In other words, the government acts a bit like a nanny and says that it knows we do some bad things and will raise the cost of doing them. But, another approach would be for the government to adopt the view that certain common behaviour is not good for the health of the nation and suggest taxing them. Because many believe that leaving people to choose for themselves, governments may be reluctant to ban things, but will raise the cost of doing them. So, if the government has a belief that it should be helping to improve the nation’s health and, say, that it wants to reduce the occurrence of things like non-communicable diseases (NCDs), it could reasonably look at taxing things that contribute to those. Last October, the World Health Organization called for worldwide action on the consumption of sugary drinks. Its main message was:

‘Taxing sugary drinks can lower consumption and reduce obesity, type 2 diabetes and tooth decay, says a new WHO report…Fiscal policies that lead to at least a 20% increase in the retail price of sugary drinks would result in proportional reductions in consumption of such products.’

Many jurisdictions have already tried to do this with taxes on sugary drinks: Denmark has had such a tax in place since the 1930s. But, it’s now on the radar for many countries and regions. So, why should Jamaica’s finance ministry not make a calculation of what a 20 percent increase would yield, assuming that we got a proportionate reduction in consumption? We could then see what economists would call the ‘opportunity cost’ of the measure, because we could then see what we have decided to give up in potential tax revenue.

My experience in economic policy making informs me that such options are often assessed, but behind the closed doors of political discussion, some options never get out of the room. The personal preferences of ministers or the political calculations of parties may block some ideas from coming to the light. But, the nation needs to know these options. I may be a serial optimist to think that a political party would show such calculations. But, in a mature democracy, what would be better? When we hear that J$2 billion will come from a particular tax, it would be good to know that this amount could perhaps have come from another tax. Doing this would also force the government and the nation to understand or discuss why a tax was imposed and another option ignored. It would also force us to try to understand who will be affected by tax measures.

This last point is a gaping hole in the way that budgets are done in Jamaica: we do a poor job of pointing out who are the gainers and losers of budget measures. Doing that analysis is not easy, and is subject to lots of criticism, but we could live with that and try our best to refine our understanding in this area.

I taught a seminar on income inequality at the University of the West Indies, Mona, this week, and one of the things I asked the students to think about was who gained and who lost from the budget and what has it done for income inequality.

But, it’s not just a range of tax measures that need to be assessed this way. Jamaica should always have at its fingertips figures for those people and organizations who do not make a contribution when they should–tax avoiders and evaders. The cost of tax delinquency should always be in the budget discussion. At the start of FY 2015/16, Tax Administration Jamaica (TAJ) estimated the stock of arrears at J$350 bn. During the year, arrears amounts deemed to be uncollectible for the Years of Assessment 2009/10 and earlier, were written-off, as outlined in TAJ’s Debt Write-Off Policy, so that greater focus could be placed on pursuing more recent liabilities. As a result, the stock of arrears was reduced to J$125 bn at the close of the fiscal year. That’s a significant reduction. While TAJ may be doing its compliance work better, with its National Compliance Plan 2016/17, the nation needs to understand what it’s doing and what it hopes to gain. I’m for ‘naming and shaming’ tax delinquents–I’ve seen it work in other countries to great effect–but our laws and regulations on that are somewhat restrictive. Moreover, the finance ministry should at least tell us why going after more arrears is not one of the measures that it wants to see pursued more vigorously. If, say, we could get back 25 percent of the existing arrears during the fiscal year, then a J$30 bn tax package may not seem necessary.

In the same way that I suggested that we could see coherence in government policies, with health objectives being underpinned by fiscal measures, we could get coherence in matters like energy policy. As I tweeted over the weekend, policies should direct us towards energy efficiency and better use of renewable energy, such as through solar power and hybrid vehicles.

Tax policy shd vigorously encourage energyefficiency, cuttingduties on renewableenergy sources, duties on hybrid/electrics. #JaBudget2017 7/

— Dennis Jones (@dennisgjones) March 12, 2017

Neighbour country, Barbados, saw decades ago the sense of promoting the use of solar energy and its use has been compulsory in all new buildings for years. Why has Jamaica, with its similarly abundant sunlight, been so reluctant? Another debate.

We also need to be open and clear about why certain bodies of the nation continue to gets special treatment in terms of tax obligations. In that conversation, we need to ask and have answered why religious institutions are treated the way they are. Let me not be prescriptive for the moment, but suggest that the nation could do worse than to get a better understanding of what the current situation is deemed acceptable, and why in an era when the finance minister is urging us to be ‘responsible’, that burden only falls on certain shoulders.

There are other specific topics that could be brought into the conversation, but we would go far by having a more neutral discussion and facts on the topics touched on above. The finance minister has talked about the status of a range of public bodies and how they could contribute to government finances. This is a wonderful topic. Personally, I would have preferred to have seen us have that conversation first before deciding to dip hands into the surplus of the National Housing Trust to the tune of some J$11.4 bn. Call me old-fashioned for wanting to put the horse before the cart.

So, Jamaica, how mature are we? Can we have such conversations?

Sunday Observer Budget 2017/18 Commentary: The government still in the jaws of a dilemma

Tags

Budget 2017/18, Jamaica

Below, is commentary requested by The Jamaica Observer, immediately after this week’s presentation by the Finance Minister, Audley Shaw, in the debate on Budget 2017/18. It’s broadly in lines with comments I made on Nationwide Radio 90, the day after the Budget presentation.

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Business

The government still in the jaws of a dilemma

BY DENNIS JONES Economist

Sunday, March 12, 2017

JONES — How is the tax ‘give away’ going to be financed?

The government remains clearly committed to the idea of moving from direct to indirect taxation. This has merits, especially making it more likely that revenues will flow as expected — revenues in FY 2016/17 are already overperforming significantly.

However, it is my impression that this move is still taking more of a toll on those less able to afford this shift — the poor — in some sense or other. It’s also clear that where direct taxes remain, they are a heavier burden on those towards the top end of the income ladder.

The Budget leaves the government still in the jaws of a dilemma: it does not convincingly push the needle towards the much vaunted growth target of 5 per cent growth within 4 years, the so-called ‘#5in4’. (In that vein, it’s worth noting that the accelerated growth in 2016 has largely been driven by agriculture rebounding from previous drought, and is not reflective of the effect of policy measures.)

The tax measures — pulling $13.25 billion to cover the commitment to move the personal income tax threshold to $1.5 million — are revenue neutral: that is, income tax relief is offset by higher indirect taxes on ‘sin’ (alcohol and tobacco), but also on near-essentials such as electricity, fuel, and vehicle licence fees.

The passing through of these higher indirect taxes will impact the living costs of a wide range of people. In essence, the income tax gains of a few has been replaced by the tax-induced pain of many, and we see more give but even more take-back.

Benefits from income tax relief are diluted by higher spending by households on a range of basics and ‘luxuries’. This seems to be less growth-inducing than the opposite.

Key industry partners have already expressed various levels of dissatisfaction with some of the indirect taxes: Red Stripe argue that may have to curb their US$20 million investment since consumption of alcohol will be affected, in a market already near the regional bottom in its consumption per head of alcohol. The insurance industry sees a negative outlook from making group health insurance more expensive.

We are already seeing push-back from taxi operators to the increase in fuel taxes and vehicle licensing fees.

The reshaping of Property Tax is interesting, moving to more current valuations (2013, compared to the 2002 values, at present) but also reducing the rates that will apply. The following question needs to be answered, however: Will it really be the start of using regular valuations? We need to see how the revenues flow in the various parishes and whether the local councils will have the revenues badly needed to improve some roads and lights, etc.

Social safety net measures announced sound good, but more people other than those who qualify for PATH will need financial support.

The drawing down of $11.4 billion from the National Housing Trust (NHT) is not good, in principle or in practice. The surplus of this and other special funds is there to serve specific purposes, not for general financing of government activities. In that regard, it is not a prudent fiscal measure and is ultimately unsustainable.

To sum up, the budget looks set to hit both consumption and investment negatively, emphasising that it is not growth-positive. But it also looks at risk from offering help it sees as needed to only some of those who really need it.