Dr Damien King, how can we increase productivity in Jamaica ?

I would love to hear from the very vocal Dr Damien King and other Phd’s from UWI, UTECH, UCC on what needs to be done to improve productivity here in Jamaica. Last week there has been much talk about that letter sent by some congress folks to the US President, asking him to lean on the IMF to relax the tough austerity measures being imposed on Jamaica. Most Jamaicans seemed to have welcomed that move expect for Dr King and a few others who have been saying all along that Jamaica must stay the course.

Dr King is contending that relaxation of the rules would amount to the IMF saying to Jamaica, you can go ahead and borrow more.

I have however taken a very different approach and will once again ask the question that I did last week, how did we get here?

I will repeat, the underlying reason why we got here is NOT borrowing as most Jamaicans have been led to believe. Now don’t get me wrong and don’t become confused, we did borrow beyond or ability to pay but why was this the case?

So here is where the underlying cause or root cause comes in, ie that thing if when fixed, would  not have caused this  excessive borrowing.

Low and decreasing productivity over the last 30 odd years, is what has placed Jamaica in this position and that is the only thing can get us out of economic crises that we find ourselves in.

The Debt/GDP ratio is a mere symptom of a underlying problem and NOT the problem in and of itself, yet its the former than all the focus is on.

I must once again repeat, that  I am not a trained economist, but I am will predict that if Jamaica stays on the present course it will lead to no where at all . Yes we may get the Debt/GDP ratio  and the fiscal down to  more statistically better looking figures, but what about the fundamental factors that drive these numbers, would those have been addressed.

The answer to my question is a resounding no and there in lies the problem with economist and economics, it’s not an exact science. The presence of something does not mean the presence or absence as the case may be  of some other related factor and this is where they get into trouble and cannot explain why what we are seeing is happening, because its not in the text book.

The factor most often overlooked by Statisticians, Economist and Financial Analysis is the huge elephant in the room and that is you and me, ie the people. Its very difficult to predict people’s behaviour which explain why many economic models does not work, because the human factor is very difficult if not impossible to predict.

Our continued focus on this statistical Debt/GDP ratio and fiscal deficit  is going to get us into trouble within the next two years, because our focus has been wrong, mark my word.



3 Responses

  1. He doesn’t know. he is just regurgitating from a text book. If the government raises interest rates to 40% and devalues the dollar to 150, he will come out and say its the best thing for the country and we must stay the course.

  2. Another issue is the human capital. Jamaica has a lot of unskilled and uneducated people and these persons are in the majority. What do we do with them? The days of mass employment of low skilled workers in factories are over but these people need jobs.

    Until the development of our human resource is address we are only deluding ourselves.

  3. The economists will keep relying on the base nature of Jamaicans to survive.

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