Many of us are familiar with the Clinton 1992 campaign mantra 'It's the economy, stupid!'. It focused the American people's attention on the view that the myriad ills of the country were all attributable to the unsatisfactory state of the United States (US) economy, and that by fixing the economy, the problems of the country would be corrected.

Bill Clinton won the election and his presidency launched a period of sustained economic expansion not experienced in the US for decades.

Throughout the Clinton boom years and since, Jamaica has been in a continuously depressed economic state. Our problems have remained largely unaddressed and unresolved, and have in fact, worsened. The ills of our country are now too many to enumerate, but they are all linked to an economy unable to provide the resources and opportunities conducive to the creation of a stable, hospitable and prosperous society.

Successive governments have failed to carry out the reforms necessary to lead the economy in a clear and positive direction. The country's economic management has been characterised by policy inconsistency and strategic incoherence.

On the one hand, each political administration has consistently presented ambitious national-development plans, such as the National Industrial Policy (NIP)and the recently promulgated Vision 2030. All have set highly desirable economic objectives with which no one could disagree. Yet, year after year, governments have presented national budgets that bear no relationship to those impressive objectives.

It appears that Jamaican governments long ago decided to separate their annual budgets from the objectives of their national-development plans. Weren't this so, the previous administration would not have promulgated a National Industrial Policy targeting production and industrial development while at the same time pursuing economic policies that moved domestic capital away from productive investments and into unproductive government paper. How could we today have a Vision 2030 with clear developmental and industrialisation goals but there is not a single policy in this year's budget that even hints at development?

No one could reasonably challenge the objectives of any of the long-term plans which have been prepared by our governments over the years. Not the NIP; not Vision 2030. The one thing we do know is that so far, they have turned out to be worth far less than the paper which was wasted in their publication. The real failure of government has not been in the writing of documents, but in the taking of the hard economic policy decisions needed to convert the dreams described in these documents to a reality which can be lived by the people.

All our national-development plans have been eloquent on desired outcomes, but none could be taken seriously because they lacked the specific economic policy measures capable of achieving the objectives set - that is, a step by step road map incorporating sequenced and coordinated monetary, fiscal, trade and administrative policies required to get us there.

Public reaction

Our annual budgets have become little more than bookkeeping exercises devoid of strategic policy direction. They are primarily concerned with finding revenues to match predetermined public-expenditure obligations. Public reaction to them is of necessity reflexive, representing the mood of the moment rather than a considered commentary on the prospects for the country's economic future. People judge each Budget in the context of the present circumstances of their lives, not recognising that any pain contained in a Budget is purely a symptom of the state of the economy, and that unless the economy is fixed, budgets will continue to be onerous and will never represent their best hopes and expectations.

Fixing the economy will require dramatic increases in our productive output. But for this to take place, the basic prerequisites for economic development must be met. It is indisputable that without competitiveness, no economy can develop. It is equally unchallengeable that it is the cost of the local inputs which go into production that determines the degree to which an economy can be competitive. Even more obvious is the fact that until Government implements economic policies which lay the basis for these costs to be brought to competitive levels, development cannot be achieved and economic prosperity will always be an unattainable illusion.

Why then do governments continue to produce these national-development plans when they are unwilling to commit to the policies that will make economic competitiveness possible? Our successful CARICOM and Latin American neighbours have all made these necessary policy changes and are now reaping significant benefits; achieving per capita gross domestic product (GDP) several times greater than Jamaica's.

Our Governments' policy inertia over the years has resulted in economic conditions which have made our employment of key economic resources alarmingly unproductive, leaving us with a virtually dysfunctional economy. We use more oil per dollar of GDP than any country with which we trade; more electricity, more labour and more capital. These are the critical indices of productivity that determine a country's ability to compete, to produce and to provide economic opportunity for its people.

Open global trade

For every dollar of GDP, Jamaica consumes three times more oil than The Dominican Republic, more than three times more electricity than Costa Rica, and four times the labour used by Barbados. How, under these circumstances, in these times of open global trade, can we produce anything that will be able to compete, without first undergoing deep and radical economic reforms?

The problem will not be solved with another well-written document; it needs common-sense economic policies and hard-nosed action which will create an environment of competitiveness within Jamaica. But has there been any policy announced, or contemplated by this Government which even suggests that it is looking in that direction? The effort made to contain the growth of public-sector salaries might have suggested the start of a broader incomes policy leading to improved labour productivity within the economy, as happened in Trinidad and Barbados in the 1980s. However, it is now clear the Government's interest was merely to contain its expenditure, not to bring about economic reform.

The new Jamaica Labour Party government, rather than changing the course on which it found the economy when it took office, seems to be stuck in neutral with no idea as to how to get moving or what course to take. Forward movement will require a new policy paradigm. Only an approach to economic management that starts with development as the objective and continues with policies designed to establish a competitive productive base, will enable growth and prosperity to take place.

But this Government seems to have come to office believing all that is needed to improve the country's performance is to better manage the books, run a tighter ship, introduce a few new programmes, and impress the public that it will not accommodate corruption in its administration. They seem not to realise that economic development involves major shifts in economic policy and that it needs to develop a new macroeconomic policy framework within which the factors which go into our productive output are competitive, enabling the operation of productive and competitive enterprises capable of creating strong demand for our goods and services at home and abroad and employment opportunities for our people.

The fact that major fiscal, monetary, trade and administrative policy changes will have to be made to achieve these outcomes seems not to have crossed their minds.

For years, governments of Jamaica have dithered and tinkered around the edges of our deep and pervasive economic crisis while other governments around us have acted with boldness, courage and vision and made the critical economic-policy changes needed to transform their economies from underperformance to impressive growth.

Revenues and expenditure

Costa Rica, Trinidad and Barbados, for example, have acted to address the important issues of competitiveness in the only way that works: the combination of fiscal, trade, monetary, incentives and institutional arrangements which put competitiveness at the centre in order to reap development and prosperity at the end. The countries that have chosen this path are well on their way to success today.

For the better part of a month, the nation has been engaged in listening to and discussing a bookkeeping exercise in Parliament: revenues and expenditure, the management of the Government's finances and debt. We will continue to do this every year with ever-increasing levels of trauma, helplessness and frustration, until the year 2030 and beyond if we do not address the fundamental macroeconomic obstacles that have retarded our development for decades.

That the Government has so far failed to use the opportunity of the global economic crisis to implement the fundamental policy changes needed to put our economy on course for development is most surprising. It is curious that it was sufficiently aware of the crisis as an opportunity to increase taxes, and used it with great skill and efficiency for that purpose. If only that same skill and efficiency could have been applied to what will really matter in the long run: improving the prospects for development, prosperity and security for our people. For if we are unable to change course at this time, in this situation of crisis, when will we ever change?

Claude Clarke is a former trade minister and manufacturer. Feedback may be sent to columns@gleanerjm.com.