Thank you for allowing me to address you this morning.
I am honoured to be at the CEO Summit, here at the Summit of the Americas as we share our perspectives on shaping a better future for all our peoples.
This is my first Summit as Prime Minister of Jamaica. Let me thank You Excellency, President Vizcarra, for graciously hosting this year’s Summit of the Americas, and for the warm reception given to me and my delegation.
Now, more than ever, we face a reality where we need each other. Partnerships are so important to the growth and prosperity of any country. Even as we face our own national realities, we must be cognizant of the fact that the global and local environments require collaboration and cooperation, to maximize opportunities and overcome common challenges, to build a firm foundation for shared prosperity.
The Jamaican Context
In 2010, Jamaica’s debt was 140% of its GDP, among the highest in the world at the time. My country was teetering on the brink.
We faced a crisis. Ill-conceived and undisciplined fiscal strategies, which disincentivized enterprise and productivity, together with the cumulative impact of natural disasters over the years, created a perfect storm when the global financial crisis hit in 2009.
At the end of our last fiscal year, March 31, 2018, our debt to GDP ratio was 105% and we project continued progress in this regard. All other macro-economic indicators are heading in the right direction, together with the highest business and consumer confidence in more than a decade, we are turning the corner.
Allow me to share a bit of what happened in between.
In the face of crisis, we had to start a new conversation about the expectations each stakeholder had of the other.
This led to the establishment of a broad-based social consensus among stakeholders, around action necessary to avoid economic collapse. Action meant sacrifice. Stakeholders had to give up claims to entitlements and benefits which the country could not afford.
However one-off sacrifice of entitlements and benefits is not a complete solution per se. We had to agree to change the behaviours that generated the need for sacrifice.
In exchange for sacrifice, government agreed to implement and maintain a disciplined and rules-based monetary and fiscal policy stance, and to address the fundamental structural inefficiencies in our public sector and tax systems.
Private Sector bond holders agreed to restructuring debt in a number of debt exchange arrangements, public sector workers agreed to a wage freeze, and the average citizen accepted the necessity of the government maintaining a Primary Surplus Balance of 7% or higher over the last 5 years.
In any country, such a primary surplus balance over such a long period of time would be considered extremely challenging without more. This meant fiscal consolidation and a curbing of government spending. All of this was enshrined in successive IMF agreements and supported by the IDB and the World Bank.
Developing a consensus for immediate sacrifice in exchange for entrenched long term behavior change in a highly competitive political environment, requires trust, that all stakeholders in the future will moderate their expectations and keep their commitment to disciplined programmes.
Trust can only be sustained in a transparent atmosphere, where all stakeholders have access to, and oversight of, the actions of each other. Several oversight bodies were formed to police the consensus on economic actions. This is the formal structure of the Partnership between the Private Sector, civil Society, public Sector workers, the Parliamentary Opposition, the Church and the Government.
This national consensus was not solely focused on economic issues, there was also a national effort to achieve broad consensus on social issues. The Private Sector plays a critical role in supporting dialogue and action on social issues as well, and is a principal partner, influencer and driver of collaboration.
The deliberate engagement of public Sector and private sector partners, was and remains instrumental to achieving inclusive sustainable solutions to overcoming crises in Jamaica.
Here is the Jamaican model. We established:
• An overarching national consensus body to oversee the emerging economic and social consensus on policy actions. It provides a forum where all stakeholders can dialogue and resolve conflict. It also monitors and ensures that commitments to the consensus are maintained. It is a formal agreement publicly signed by all stakeholders and renewed periodically. This is called the Partnership for a Prosperous Jamaica.
• The Economic Programme Oversight Committee – EPOC, initially charged specifically with oversight of compliance with an IMF Extended Fund facility, giving oversight of fiscal reform and macro-economic targets.
• The Public Sector Transformation Oversight Committee – PSTOC – as the name suggests, oversees implementation of the government’s public sector reform programme
• The Economic Growth Council – EGC – a primarily private sector led grouping established to propose and promote government policies, specifically geared at achieving robust growth.
These committees, whose membership is drawn from a wide cross section of the society, have had a positive impact on the country’s macroeconomic stability.
They form part of a deliberate and disciplined strategy to hold everyone, but more so the government, to account. This public private partnership model is built on transparency, which creates greater certainty in government actions and raises alarm when there is deviation from consensus.
However, the greatest benefit of public private partnerships to support policy consensus, is that it adds an objective voice in the political debate – to counter opportunistic political forces and unreasonable demands from any stakeholder that would threaten the agreed goals.
They also constantly remind of the consequence and repercussions from deviations when political leaders may not see it convenient or have the strength or credibility to counter undisciplined impulses. Importantly, the level of transparency demanded by these mechanisms also inherently reduce or indeed remove the scope for corruption.
Macroeconomic stability is now taking root in Jamaica and we are now building on the foundation of fiscal discipline, the pillars of a doctrine of economic growth and meaningful job creation, which will lead us to our ultimate goal of economic independence and shared prosperity.
We are charting a path that entrenches growth-inducing reforms so that upon conclusion of the Precautionary Standby Agreement with the IMF, we will manage our affairs in a thoughtful and disciplined way, so that our economic independence is sustained.
As we continue to build on the stable macroeconomic environment underpinned by partnerships; it is fundamental that we also implement a robust governance framework which tackles corruption by building sound institutions that promote accountability, transparency and integrity.
We know that clearly defined systems that protect property rights; consistent regulatory practices that curb, anti-competitive behavior; as well as established norms around the rule of law, create an environment conducive to investment and innovation.
The Jamaican Government has embarked on an ambitious agenda to strengthen our anti-corruption framework.
• We have passed the Integrity Commission Act that merges 3 anti-corruption agencies and creates an enhanced framework. Together with the Major Organized Crime and Anti-Corruption Agency Act (MOCA) which is in its final stages of debate in the Senate, they will institutionalize our approach to anti-corruption. The ecosystem of lack of accountability and transparency will certainly be disrupted.
• The National Identification and Registration Act will create a new national identification system. No one will be anonymous but the Government has every intention of protecting the privacy of all citizens. This move, while making several processes less vulnerable to corruption, will also enable Jamaica’s transformation into a truly digital economy, creating new opportunities for greater participation, innovation, efficiency, transparency and an even stronger democracy.
Commerical Public-Private partnerships
With high debt and limited fiscal space, Public-private partnerships have emerged as an important commercial modality to secure economic growth. The mutual benefit that public private partnerships offer is of great value.
As we quicken the pace at which we deliver jobs, improve infrastructure, and increase training opportunities that match labour market demands, government must act as the enablers of growth by making it easier to do business, supporting private sector lead entrepreneurship and partnering with the private sector for greater utilization of public assets and provision of public goods and services.
A robust PPP allows for unlocking the value of assets; reducing debt; and the mobilization of direct (local and foreign) investments in the economy.
We recognize, however, that in order to maximize the value of these partnerships, the public sector must operate in an effective and efficient manner. There has to be a culture change where the public sector bureaucracy understands that in the absence of its ability to spend, its survival at the standards it would like, depends on the efficiency with which it supports businesses and private enterprise, whether large or micro.
As government and business leaders, we must understand the synergies between our roles. The public sector must make it possible for businesses to grow, provide the best service and innovate the best technology for our citizens, while ensuring the dignity in quality and equity in access to all citizens, particularly the most vulnerable.
Jamaica’s Privatisation and Public-Private Partnership Policy seeks to facilitate increased private sector participation in economic development activities by utilizing private sector skills, innovation and capital to create more competitive and efficient enterprises and to provide critical infrastructure or services. Jamaica was ranked fourth in the 2017 Infrascope Public-Private Partnership (PPP) programme index for Latin America and the Caribbean. This index demonstrates that Jamaica is among the best prepared for PPP in Latin America and the Caribbean.
Jamaica has undertaken several structural reforms to address our macroeconomic vulnerabilities. The strengthening of our economic institutions is one of the ways we are able to engage in PPPs that promote fair risk-sharing and enhance accountability and transparency. Jamaica is the only country in the Caribbean region with a legally binding fiscal rule. This and other related reforms aimed at improving our economic institutions have all contributed to increased business confidence in the Jamaican economy. Sound institutional reforms are critical for economic independence.
The greater challenge is not to build growth policy but to institutionalize this policy mix to create an ecosystem that facilitates and results in sustainable and inclusive growth. Growth with meaningful job creation.
We now have a different type of relationship with the private sector that allows for open, transparent processes for engagement; a level playing field and fair competition. The goal is to transform the public sector so that they are able to facilitate the private sector as the main organ of growth in any society.
Citizen and investor trust in public and private institutions is eroded due to corruption and a lack of transparency. By utilizing partnerships together with, and as themselves anti-corruption mechanisms, we signal that all partners are committed to upholding accountability, transparency and integrity as the hallmarks of well-designed institutions and democratic governance.
As we come together at this conference; we are focused on a better future, while learning from the past.
There is no doubt that effective domestic response capacity is most feasibly pursued through joint, collaborative cross border effort. For a better future, we have a shared responsibility to our citizens and to the world and must work together for a greater quality of life and success for all our peoples. Public Private Partnerships in all their forms are key to our success.