Government berated on inability to make Jamaica efficient and competitive

Graphs and data brought by Peter Bunting proving the point 

Durrant Pate/Contributor

Opposition Spokesman on Productivity, Efficiency and Competitiveness, Peter Bunting is berating the Andrew Holness government on its inability to make Jamaica efficient and competitive.

Acknowledging that the Portia Simpson-Miller government of the 2012-2017 of which he was a part of, started the process of macroeconomic stability, which has continued under the current administration, Bunting chided the government for not bringing about the transformation necessary for making Jamaica efficient and competitive. Making his Sectoral Debate contribution in parliament yesterday, Bunting brough graphs and data showing and emphasizing the poor record of the government in transforming the economy for long-term economic growth.

“Jamaica’s long-term economic growth remains among the weakest in the developing world. Real GDP growth has averaged approximately one percent per annum over several decades. Labour productivity has declined. Foreign direct investment inflows have fallen sharply from their previous highs,” Bunting told House of Representatives. He declared that the government has only stabilised the economy without transforming it, citing that gross fixed capital formation has weakened while real wages remain under pressure. 

Jamaica’s productivity emergency 

Bunting made reference to the IMF, World Bank and the OECD, which has all reached broadly similar conclusions that countries that fail to improve productivity eventually encounter a ceiling beyond, which growth becomes difficult, wages stagnate and economic opportunities diminish. Bunting posited that this is precisely where Jamaica finds itself today.

He zoomed in on the performance of Jamaica’s labour productivity over the last quarter century, where an entire generation has grown up in an environment of declining productivity. According to the Opposition Spokesman, “Jamaica’s labour productivity today, measured by real GDP per worker, remains below where it stood 25 years ago. During the same period, labour productivity in the United States increased by some 50 percent. China’s labour productivity increased by more than four hundred percent.”

Closer to home, countries in Latin America and the Caribbean with which Jamaica competes directly for investment and export opportunities have achieved substantially stronger outcomes in labour productivity. Bunting refenced total factor productivity, which accounts for a significant share of long-term economic growth stating that Jamaica has remained weak in this area for decades.

“What the graph shows (since 2021 is the base year) is that for our entire history since independence Jamaica allocated and combined resources more efficiently than it is doing currently. This is not a productivity challenge, it is a national emergency,” the Opposition Spokesman remarked. 

This matters Bunting contends is profoundly because productivity growth is not simply another economic indicator. It is the primary source of long-term improvements in living standards.