Jamaica economic recovery plan – part 4

Continuing from part 3

Accountability

Now have set these objectives and specific deliverables, we will include accountability criteria for each minister and actions that will be taken should they fail to hold their end of the bargain.

1. Each minister will be issued a pass or fail mark per each of his deliverables within his ministry. One is only considered to be successful if he/she attains the objectives and deliverable as outlined. So if for example the housing minister should delivery an average of 1000 house per yr. and fails to that over a two year period he gets a grade of zero, if he delivers he gets a score of one.
2. A minister will only be allowed to continue in his capacity as minister if he is successful in delivery at a rate of 70% or greater by the end of year three, failing this will result in his removal and replacement. Being an elected member government our constitution does not allow for him to be removed from office but he can be reassigned to some other role within government for which he may be better suited.

E.g. the minister has ten set of deliverables. He fails at three and is given zero, but is successful at 7 and given a one for each, his grade thus becomes 70%. This will allow him to continue but now he is in danger of losing his position as he is sitting at the point where failure is almost imminent.

1. Ministers must live up to ethical standards and so any minister or MP who is runs afoul of the law, and is either arrested and charged or merely accused must recluse himself as a member of the government or opposition. We cannot have a country run by a set of corrupt people who have immense power in their hands.
2. No minister not even the Prime Minister is above the law and therefore can be arrested and charged if he runs afoul of the law. He will be offered no special privileges. In the unlikely event that a Prime Minister is arrested and charged, the Deputy will assume the reins of power until general election is held.
3. The ministers will give annual progress report during the budget speech, which will now be known as annual review time. Here he will tell us his achievements over the past twelve months, and his plans to correct where he is failing for the upcoming year.
4. An independent body will be setup to monitor each of the Key performance indicators by each minister/ ministry and they too will provide update to the people via a sitting of the parliament and via the electronic media.
5. The body will provide quarterly reports on each of the above  which will allow for the people to measure the performance of the minister.

In addition there should be some educational requirement which is specific to the task ie we should define the requirements of each job similar to how its done in the private sector.

Eg. Minister of National security should posses the following attributes/qualification.

1. a. A degree in management preferable with criminology being a part of that program
2. b. Five years experience in senior management position.

Minister of Education.

1. a. A degree in management with a bias towards education
2. b. Five years experience in a senior management position.
3. Proven track record of meeting specified targets.

Renumeration

While in government we cannot pay the same as in the private sector, I believe that the salary should be competitive and should not be less than say 70% of what this persons could get holding a senior management position in a private sector company. If we are going to give people responsibility and hold their hands to the fire, they should be properly compensated.

I know there are many people who will say

1. It cannot work, nowhere in the world is there such a system and there is no way our politicians will agree to work with such a system.
2. This man must be a mad man, how does he expect this to work.
3. This is Jamaica we are talking about such a system cannot work.

Thanks for reading my ranting.

New taxation package not necessarily inflationary

I seek to respond to Mr. Ralston Hyman article in the Sunday Herald, dated January 17, 2010 entitled “ New Taxes Measures Inflationary”

Economist can easily be confused and make very fatal mistake when they fail to look at all the factors involved in running a business.

Failure to take into account these factors ultimately leads to the wrong conclusion being drawn in the Jamaican case.

Ralston as an economist fail to recognize that one of the most significant impediment to efficiency in business no matter what that business is, is  waste.

In many organization and particularly in manufacturing waste accounts for up to 30% of the cost of running the operations, which if eliminated goes straight to the bottom line thus increasing profits.

Simple Economics 101.

Price = Profits + Expenses

Profits = Price – Expenses

If price is fixed, then profits can only increase if expenses go down. Waste reduction in the true sense does not mean simply cutting cost, but more looking at the entire value stream of the organization and remove a much non-valued items as possible. Non-valued items are those that the customer does not pay for, and which is a burden on the company.

Many companies have been able to significantly improve efficiency by focusing on the entire process i.e. from the time an order is received to delivery to the customer. They map this process and the systematically seek to remove those items that no one pays for.

Ralston Hyman’s article misses this point, and takes the simplistic approach that any increase in the cost of inputs results in an automatic increase in the price of goods to the customer, which ultimately leads to inflation, which is really not true.

There is a price beyond which the customer will not pay anymore for the cost of goods or service being offered, no matter how good the product or service being offered is, and they will begin to look elsewhere.

A good company which seeks to remain in business and continue to be profitable, will therefore seek to remove as much waste from its operation as possible, hence there is really no inflationary impact from increases in its inputs as those pointed out by Mr. Hyman in his article.

Secondly, Mr. Hyman by failing to broaden his views also missed a very important decision which taken by the government last week, as part of their two prong approach to rescue the economy from total collapse.

The GOJ has all but secured buy in from all the major financial institutions in Jamaica which holds close to $700b of GOJ bonds, in its debt swap initiative, something that very few believed could have ever happened in this country.

The initative seeks to replace high interest yielding bonds which much lower yielding bonds, with rates in the region of 11 –12%.  This is a very bold move and one, which is said to save the country just over $34b when the lower tax yield from the bonds is taken into consideration.

What this has effectively done is to take away the incentive to park money in GOJ papers and make huge gains by doing “nothing”, as when inflation is taken into account the net yield on these “new” GOJ paper will be either zero or slightly negative.

Don’t even think to taking the money overseas either as the yields are next to nothing, as those rates are between ¾% to 2.5%.

This really forces people to produce in order to make any meaningful returns on their investments and therein lies the potential benefits to the country. Manufacturers and the providers of goods and services will be forced to take a very close look at their operations with a view of trimming waste, thus become lean and mean in order to make profits vs. simply passing on any increases in cost of inputs to the customer.

It’s amazing what conclusion that one can arrive, depending on the path chosen to complete the analysis.It is very important that as writers, we seek to provide as much information to the people as possible so they can form their own decisions, rather than providing only partially information, thus skewing the decision making process to suit the writers own persuasion.

Bless.

The Haitian Crises- what’s the message.

By now many of us will be well aware of the monstrous earthquake that shook Haiti on Tuesday afternoon, January 12, 2010.
The scale of the disaster is unimaginable in one of the poorest country on earth, and the death toll will undoubtedly be very great.
I believe it could be on the scale of the Tsunami that struck Indonesia back in 2007.

Our hearts goes out to our fellow Caribbean nationals once again, but are we missing the signals on Haiti, I do believe that we are.

For years Haiti has suffered at the hands of despotic dictators and other leaders who care more about themselves and their families, than the suffering of their people who have an alarming poverty rate of 80%, yes 80% !!.
Here is a country that children are feed mud cake by their parents who are so poor they cannot find food to feed the kids. (One might say don’t have them if you cannot take care of them).
This country has been raped by the like of France, Spain and other countries for years, then this process was continued by successive black leadership.

Hurricane Gustav brought untold damage, pain and suffering and loss of many lives, and while the world responded, albeit bandaid, ie just for the moment help.
In 2009 Haiti was once again in the news, this time they were devastated by flood waters which killed hundreds and left thousand homeless, plunging the country into further poverty.
The world again responded, offering token support for the people of that country, once again the bigger message was missed.

This week the earth shook and Haiti was once again thrust (literally) into the spotlight this time on a scale significantly bigger than the previous two disasters and surely now the entire world is awake.
It is my belief that the salient message is, the people of this impoverished country has had enough and the only way to highlight the real suffering of the people is to make a big a statement as can be possible made, so it can grab the attention of the world, and finally get the attention that it deserves.

The presidential palace which stood out as a beacon of the stark contrast between how the common man lived and the opulence in which the leaders lived was not spared, and for me that’s a huge statement, if you are really listening.

Haitians has been crying out for help for years, their leaders have ignored them, the world largely has ignored them.
They leave in boats that are not even suited for the river, many are killed in the process, and those that make it to other countries are rounded up, thrown in jail and carted back to the streets of Haiti.
Of course these are poor black people who really have nothing to offer these countries, so they we will have nothing to do with them.

Now we are forced into action. The President has no where to live and for the very first time understands the plight that millions of his people have endured for years. He has been dealt a cruel blow one from which he will hopefully learn that the cup has overflowed and now Haiti has to be rebuilt from the ground up.

I am of the opinion that Haiti has been given a second lease on life, and that the government of that country should really seek meaningful assistance in rebuilding the country, with a view of moving it from an impoverished nation, to one that can hold its own within the next 15- 20 years.

The message is clear, Haiti needs long term help and the world is being forced to step in and help provide the assistance that is required.
Preval and his people however needs to get this message, and while he works on the immediate need of search and rescue, medical aid, food and water and temporary shelter he (they) must not lose sight of the bigger picture.

I say No to building of a palace in a country as poor as Haiti, yes to a parliament building and residence for the leaders, but even more importantly, yes to building of suitable infrastructure for Haiti residence including hospitals, fire service and suitable homes.

Haiti needs investments that will lead to job creation, growth and development of the country and I believe that the disaster in some way opens the opportunity to build the social infrastructure to support this kind of investment.

Haiti needs a coalition of nations, this time to pump in billions of dollars to rebuild the nation of Haiti.
We have had a world coalition since 2001 fighting wars in Iraq and Afghanistan and has spent trillions to destroy those countries and kill and maim thousand in the process albeit to make the world a better place. (According to them)
How about spending a little less to rebuild infrastructure and lives in Haiti, how many are willing to lend support to this war.

I do hope Preval seizes the opportunity to lead his people out of misery, he has been dealt a hand and he must play it.

Is National Water Commission ripping you off?

Recently many Jamaicans have been complaining about the huge increases in their water bill since the new water bill has been introduced.
At the same time many are complaining of up to a 3-fold increase in their bills during the period when they had no water, and are livid with the NWC.
Who is to be blamed for the problem, is it that the NWC is ripping off people, or it that people are burning a hole in their own pockets, due to lack of understanding on the provision of water.

Air in an inherent part of the water supply process and you will notice that when too much air is forced into the water supply you get hammering which could damage your water supply system.
I have made the observation that the NWC actually makes more money during periods of water lock-off than when there is a constant supply of water, due mainly to the fact that the consumer do not under how their water supply system works.

For those who are metered, the meter will move as fluid (water) or air passes through the meter. The meter in turns gives any approximate measure as to the amount of fluid that is consumed by the home owner and you pay for what is registered on the meter.
What most householders are not aware of is that the water meter spins as much as 4-5 times as fast when a pipe is open and there is no water flow that when water is actually flowing.

Let me explain this a little more.  The meter needles turns a rate at which approximates to the fluid flows past the meter actuator. Thee the more you open your pipe the greater the rate of flow of the water(air), hence the faster the meter turns resulting in big changes in the meter reading in short period of time.

So at low flow rate  of say 5 gallons per minute (gpm) means you would have used 5 gallons in one minute and hence you are  billed for that.
If you increase the rate of flow to 10gpm, then you would have used 10 gallons in the same minute and hence you are billed for 10 gallons.

Here is the where the water commission rips into you. When you leave that pipe open to ensure you know when water has arrived, you end up being billed for “air” which is flowing through the pipe at a rate which is up to 4 times greater than when you actually have water flowing through the same pipe.
So lets say the max rate of flow from your pipe when fully opened is 10gpm with water, with air that works out to be 40 gpm !!!

So at a rate of  $1 per gallon, you would pay $10 per minute when you have water and an amazing $40 per minute without water.

How do you stop them.

1. Keep you pipes off during the period of water lock off, do NOT leave them open.
2. Keep your toilet tank full. This is the area that you are likely to pay dearly as an empty tank will have the float ball down, thus allowing a constant flow of air into the tank, which you will be billed for, the flow stops when the tank is filled with water.
3. If you have a water tank connected to your mains with a float valve, shut off that valve when water is locked off. It operates on the very same principle as the toilet and combined they will “kill” you. The problem here is that you would like to get your tank full as soon as the water is back, so you will have to decide which is the most cost-effective method for you. If you place a fluid non-return valve on your inlet line it could reduce the airflow, as these values typically need fluid to get it to open.

So the next time you get a big bill and you where out of water, just remember that you paid for a whole lot of air, and NWC will move to collect

http://www.youtube.com/watch?v=lZvi37aF89Q

This is the other video that is worth viewing

http://www.youtube.com/watch?v=sV32AdruH0o