Prime Minister PJ Patterson says that he will throw in the towel by April 2006. Many Jamaicans have been involved in heated and perhaps premature debates about PJ Patterson’s legacy. From what many others and I have gathered, PJ Patterson’s legacy is marked by widespread failure. Patterson sympathizers will, as expected, argue otherwise. However, their arguments are frequently fallacious. Patterson sympathizers for example tend to piteously argue that there are more cars and cellular phones. They also spout the virtues of Mr. Patterson’s so called non-confrontational style, his achievement of freeing up the media and allegedly reducing poverty.
As a 21-year-old Jamaican university student I cannot afford to be neither hypocritical nor ‘nice’ in analyzing our PMs performance. Young Jamaicans like myself will unfortunately have to bear much of the consequences of our Prime Minister’s poor leadership. Older Jamaicans have either been left on the wayside or for the lucky few,
gotten their cut of the diminishing pie.
In any debate about Mr. Patterson’s legacy one must highlight the performance of the Jamaican economy. The performance of any nation’s economy tends to directly influence the performance of other key sectors such as education, national security and healthcare. It would then be remiss of any commentator to exclude intensive discussions of the economy when examining a Prime Minister’s legacy.
THE DETERIORATING ECONOMY
Where does one start? His handling of the economy can best be summed up as abysmal. Economic growth over the last 13 years has been negligible. Since 1993 a mere 3% growth in the economy still proves elusive. The Jamaican economy is then by far one of the most stagnant and sluggish economies globally.
Our Anglo-Caribbean neighbour’s growth rates are on average three to five times ours. Much of Jamaica’s poor economic performance is due to PJ Patterson’s terrible leadership, lack of vision, an underperforming and reckless Finance Minister, widespread governmental incompetence and mismanagement. Did you know that the 1990s saw the longest global economic boom recorded? Many countries of the developing world grew magnificently, their proficient governments successfully rode the wave of globalization. As intimated earlier, the Jamaican economy pretty much stalled during this globally prosperous period. According to the recent publication of the Survey of Living Conditions, approximately one in every five Jamaicans live in abject poverty. Imagine then the number living in ‘normal’ poverty.
THE SKYROCKETING NATIONAL DEBT
The national debt has skyrocketed. The total national debt at the time the PNP took office in 1989 hovered around J$30 billion. Today, September 2005, it is already over J$800 billion. Our Debt to GDP ratio exceeds 140%, ranking us amongst the four most indebted countries in the world to the likes of Malawi and Lebanon. The devastating toll of the national debt on our economy is absolutely astounding. Sixty six to seventy cents of every dollar in the national budget goes to servicing debt. The deleterious effects of the debt crisis extend even further. It is an economic fact that our nation’s ballooning public debt has been the unswerving cause of little or no economic growth over the last decade. By borrowing excessively, the government has continued to crowd-out the borrowers in Jamaica’s productive sectors. By sopping up such considerable quantities of capital, the Government has caused interest rates to go to sky-high levels that remain sky-high despite recent reductions.
CATASTROPHIC HIGH INTEREST RATE POLICY
The high interest rate policy of the Patterson government has then led to the lethargic state of the Jamaican economy. It has also brought about a rapidly widening gap between rich and poor. According to former PNP MP, Deacon Ronald Thwaites, the governments’ interest rate policy has brought about the most massive transfer of wealth from the poor to the rich since the abolition of slavery. Noted Jamaican sociologist and Gleaner columnist Peter Espeut stated once that Jamaica has the fastest growing and 11th widest gap between rich and poor in the world. Any drive around Kingston displays the above points. Pricey SUVs, luxury sedans, ritzy hang out spots and fortress like multi-million dollar Kingston 6, 8, 10 & 19 mansions and townhouses mix precariously in a city trapped in a vortex of extreme poverty, crime and despair. Yet our Prime Minister’s unperturbed style gives the impression that things are cool. PJ Patterson I am sure reminds many of us of the Roman Emperor, Nero. The high interest rate policy of the Patterson regime spurred the development of a J$300 billion money market industry to the disadvantage of Jamaica’s productive sector. Virtually all investments are channeled into government paper. PJ Patterson has, in essence, created an economic climate hostile to productive investment. It is better to place your money in Government paper than to invest productive enterprise. That explains why hundreds of good businesses in the productive sector closed down. This caused thousands of thousands of Jamaicans to lose their jobs, businesses and livelihoods. In Spanish Town, for example, 40 factories have closed over the past decade, causing 27,000 jobs to vanish. Added to Mr. Patterson’s legacy is the ‘achievement’ of ensnaring Jamaica into a vicious cycle of seemingly eternal dejection, economic stagnation and poverty.
THE FINSAC DEBACLE
Remember, the massive demise of the financial sector in the mid-1990s, popularly known as the “FINSAC affair”? It is argued that the governments’ high-interest rate policy, its incompetence and the weak regulatory framework at the time contributed significantly to the collapse of the financial sector. It is important to note that the collapse was not limited to the financial sector but extended to hundreds of businesses and individuals. The debacle caused the national debt to increase by $140 billion or 40% of GDP.
What angers me about this preventable disaster is the fact that so many powerful indigenous institutions were obliterated and the lives of so many budding Jamaican entrepreneurs were wiped out. Proud Jamaican companies like Mutual Life (established 1844- co-founded by national hero George William Gordon), Island Life, the Eagle Group, Citizens Bank, Workers Bank, National Commercial Bank, Century National and many others collapsed. The Commercial banking and insurance industries are now almost entirely owned by Trinidadian, Barbadian and other foreign interests. Jamaica only has one local owned commercial bank it being First Global, the smallest commercial bank in Jamaica.
THE FALL OF BLACK BUSINESS
It is a fact that many black owned businesses failed during the economic turmoil of the mid-1990s. Jamaica’s emerging black bourgeois was nearly decimated. The economic disaster had devastated the dream of having more successful businesses being owned by black Jamaicans. There goes another embarrassing addition to Mr. Patterson’s legacy, a man who doesn’t hesitate to proclaim his blackness. The disaster also decimated many other Jamaican owned businesses. Unfortunately for many black businesspersons, they lacked the wealthy family and social networks to navigate successfully out of a crisis like the financial meltdown of the mid-1990s.
All in all Mr. PJ Patterson’s management of the Jamaican economy has been a catastrophe. I haven’t even mentioned the devastating toll of extreme crime, mismanagement and corruption. On the other hand ask the average Jamaican and they’ll tell you that they feel worse off today compared to the year before. Jamaica is becoming increasingly unaffordable for many of its ordinary citizens. Even middle and upper-middle income citizens are feeling the effects of a depressed economy. These classes of Jamaicans are overwhelmed with soaring utility bills, escalating grocery bills, high security costs, irritating mortgage payments, rising inflation and a plethora of other agonizing expenses. It is distressing to see so many proud middle and upper-middle income Jamaicans so obsessed with saving money. Air-condition units are used less, many are avoiding unnecessary driving, regular vacations have been reduced and bulk shopping is now the rave. Case in point: the crowds at Mega-Mart. If middle and upper-middle income Jamaicans are behaving like this one cannot even imagine how the average poor Jamaican earning $2000 to $5000 a week survives. Bus fares alone can hover around $1,200 per week, average. Now imagine utility bills, groceries, school fees, rent and other unbearable financial obligations.
No wonder Mr. Patterson appears so green about the gills when a discussion on the state of the economy begins.