Monday, November 7, 2016
HEARING BEFORE THE US HOUSE OF REPRESENTATIVES
COMMITTEE ON FOREIGN AFFAIRS
SUBCOMMITTEE ON THE WESTERN HEMISPHERE
JULY 14, 2016
Ambassador Dr. Richard L. Bernal
Pro-Vice Chancellor, Global Affairs, University of the West Indies.
The views expressed in this testimony are personal and not those of the University of the West Indies. I will focus on the importance of CARICOM-US economic relations and the priorities for action in the post-global financial crisis era.
The relationship between the United States (US) and the member states of the Caribbean Community (CARICOM) is a multi-dimensional one and of fundamental importance because the US is the largest economic partner of the Caribbean and the Caribbean is the third border of the US I focus on the economic aspects because the economic development of the Caribbean is inextricably linked to other important issues such as democracy, governance, national security, transnational crime and narcotics trafficking. All of these issues are of vital interest to the United States and the Caribbean. The purpose of this testimony is to assist Congress to reexamine and refresh US policy towards the CARICOM countries.
The Caribbean has experienced an economic slowdown since the onset of the global financial crisis which erupted in late 2008. The rate of economic growth in 2014 was 1.2 percent and the rate of unemployment in 2013 was almost 14 percent. The crisis was precipitated by a combination of long-term structural and institutional factors compounded by cyclical short-term factors such as commodity prices, in particular oil prices. Rates of growth in the Caribbean have varied among the countries but have been low and fluctuating. In an effort to promote and sustain economic growth governments have pursued fiscal policies which have contributed to a build-up of external debt. The US as a global superpower and largest economic partner of the Caribbean in trade, investment and tourism can play an important role in assisting the Caribbean to achieve sustainable economic development. There are several issues which require urgent attention to facilitate the economic recovery of the Caribbean.
The Caribbean countries continue to be among the most indebted in the world. The debt is now a major impediment to economic growth because it has deprived Caribbean governments of the ability to use fiscal policy to promote growth. The situation is now at a point where a major policy initiative has to be mounted to significantly reduce the debt if sustainable economic growth is to be resumed.
Conventional wisdom in the economics profession is that when the debt stock is over 75 percent of Gross Domestic Product (GDP) the debtor country cannot grow its way out of debt. Jamaica leads with a debt/GDP ratio of 130.5 % in 2014, followed by Barbados at 108.5%, Grenada at 99.1 %, Antigua at 96.4 %, the Bahamas at 82.4%, St. Vincent at 79.4%, St. Lucia at 78.4%, St. Kitts at 78.0%, Belize at 77.3% and Dominica at 74.1%. Debt servicing increased in 2014 to 23 percent of fiscal revenue and required 26.9 percent of current fiscal expenditure with Barbados leading with 35.3 percent.
The reduction of the debt will ease the liquidity constraints, solvency risk and allow governments to increase public investment in infrastructure, education and health. The debt burden has to be reduced by strategy combining (a) a restructuring of multilateral, (b) reduction of bilateral debt by debt swaps for climate mitigation, environment, education and cancellation and (c) conversion of commercial debt into multilateral debt.
Debt reduction needs to be supported by the creation of a macroeconomic stabilization fund. The macroeconomic stabilization fund would increase resilience through export promotion, improved fiscal management and debt management, the objective being to prevent the build-up of debt to levels which stifle economic growth.
2. INTERNATIONAL FINANCIAL INTERMEDIATION
De-risking and correspondent banking relations is a global problem to which the Caribbean is disproportionately vulnerable because of the prominence of foreign-owned banks in the domestic financial system and the heavy reliance on correspondent banking relations for international financial intermediation. Adverse impacts include choking international investment flows, trade financing, transfers of remittances, debt servicing, transfers of profits and royalties. Some US banks have already restricted or withdrawn some of these services from the Caribbean. Combating money laundering and terrorist financing is a goal shared by Caribbean governments and suitable arrangements have to be put in place to ensure that this can be attained while allowing normalcy in international business.
The small states of the Caribbean in recent years have been threatened by transnational crime related primarily to narcotics trafficking and have benefitted from U.S, cooperation and assistance. More such support and cooperation will be necessary because global terrorism, money laundering, human trafficking and cyber-crime are international in scope and character. The cost security is already an additional expense on all forms of economic activity and could affect vital economic sectors in particular tourism.
Trade between CARICOM countries and the United States has been conducted under special trade arrangements. The Caribbean Basin Economic Recovery Act (CBERA) (revised 1990) and the Caribbean Basin Trade Partnership Act (2000) which enhances CBERA provide unilateral duty free market access for nearly all goods from beneficiary countries. The 2006 Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE) enhances the current access for certain apparel enjoyed by Haiti under CBTPA.
While CARICOM Heads of Government have decided not to negotiate a CARICOM-United States Free Trade Agreement at this time there are other ways to enhance the arrangements governing US-CARICOM trade. Approximately 130 products that do not currently benefit from duty free treatment either under CBERA or the US GSP have been granted tariff elimination under CAFTA.
All CARICOM countries except Suriname are CBERA beneficiaries. However, not all CARICOM beneficiaries are eligible for the additional preferences provided under CBTPA. Only Barbados, Belize, Guyana, Haiti, Jamaica, Saint Lucia, and Trinidad and Tobago have been designated as fully eligible to receive the enhanced benefits of the CBTPA.
CBERA benefits are limited to merchandise trade, which accounts for a diminishing share of total regional exports. With the exception of Belize, Guyana, Suriname and Trinidad and Tobago, services exports account for the lion’s share of total exports of individual countries. Therefore one clear objective in any future trade arrangement should be to provide opportunities to harness and grow the services trade between the US and CARICOM. Integrated value chains in health, education and business services processing could benefit employment and international competitiveness in both the US and the Caribbean.
5. CLIMATE CHANGE
The small island developing states of the Caribbean are among the most vulnerable to climate change. The region has suffered perennial natural disasters which have caused damage equivalent to several percent of GDP, requiring massive reconstruction of infrastructure and rehabilitation to the built environment. Climate change, evident in the form of global warming and sea level rise, will require mitigation measures particularly because Caribbean countries are coastal societies i.e. population, economic activity and infrastructure are concentrated on a narrow strip of the coast.
There is a need for more financial resources for disaster relief and disaster risk reduction projects to accelerate the recovery of economic activity after a natural disaster with emphasis on infrastructure projects and to enhance climate adaptation and mitigation. These resources should be complementary to other initiatives in the region such as the Caribbean Catastrophic Insurance Facility (CCRIF).
While the price of oil and gas are lower than in past years there is no guarantee that they will not increase. Most of the Caribbean countries are almost completely dependent on import fossil fuels and cannot assume financial relief such as that provided by the Petro Caribe. The dependence on imported energy has to be substantially by a shift to alternative energy sources such as solar, wind and thermal.
A democratic, peaceful and prosperous Caribbean Basin is in the interest of the United States of America. Economic development is a critical component of the foundation of stable democratic societies and the best long-term defense against threats to national security. The growth of trade, tourism and investment between CARICOM and the US can contribute to the economic development of the CARICOM countries thereby strengthening a partnership based on shared economic and political ideals. The proposals I have outlined can promote the expansion and diversification of trade and investment between the United States and the CARICOM region to the benefit of both parties. The effectiveness of the proposals could be multiplied significantly if they were coherently integrated components of a single, comprehensive new template for US policy towards the Caribbean.
Dr. Richard L. Bernal is Pro-Vice Chancellor, Global affairs, University of the West Indies. He was Jamaica’s Ambassador to the United States of America and Permanent Representative to the Organisation of American States (OAS) for the period May 6, 1991 to August 31, 2001. He is the author of The Influence of Small States on Superpowers: Jamaica and U.S. Foreign Policy (Lanham: Lexington Publishers, July, 2015). Ambassador Bernal has given testimonies to several Committees of Congress (House and Senate) and the US International Trade Commission on issues of concern to the Caribbean.
Friday, March 6, 2009
Professor of Criminology
Department of Sociology, Psychology & Social Work
University of the West Indies, Mona
“..... Are we likely to see extraordinary increase in crime resulting from the impact of the full-scale economic downturn expected to hit Jamaica in the months and perhaps years ahead?” This was the gist of a question a journalist from the Jamaica news-radio programme “Nationwide”, piecing together his story for a segment of his evening’s broadcast, put to me in a pre-taped interview a few days ago.
Not unlike what generally occurs in the hasty cut and paste that guides production and ultimately presentation of some of the most important stories of our time, much of what I had to say in response to that critical question got butchered and yanked out of context when presented on air. I use here the opportunity to summarise the key points in my answer, maximising the greater clarity that print allows.
One of the many things we fall short on in the academy is the gift of prophecy. We are terribly weak in the area of clairvoyance. Nonetheless, weighing possible future outcomes is indeed part and parcel of what we do, or try to do. Typically what guides us in contemplating the future is knowledge gained from the past. Given that a particular concatenation of forces caused a certain outcome in the past, what is the likelihood that a similar coming together, at some other or future time, will produce the same outcome?
I had put it to the young reporter that it is precisely within this context that his very important question has to be considered. Data and research knowledge guide how we ponder and plan for the future.
What we know
With respect to economic conditions—employment specifically—and crime, what we know unequivocally is that the closer a society gets to full employment, the less crime there is in that society. The United States, in the early 1960s, and again in the mid-1990s, came as close it ever did to full employment (i.e., outside of the period of chattel slavery). These were also years in which the country’s crime numbers were at historic lows.
The converse is not necessarily true however. It does not always follow that severe economic downturns, with huge job losses and massive unemployment, as analysts say Jamaica (and likely also the rest of the Caribbean) is set to experience, will inexorably lead to high or higher crime. In fact, it rarely is the case that a national economic implosion, as in a prolonged depression, led to high crime.
Counterintuitive as it may seem, during the U. S.’s prolonged Great Depression, when rates of unemployment soared in three years from 3 per cent to 25 per cent, and the economy contracted by 30 per cent, casting more than 15 million people out of work, crime shrank, noticeably so in the numbers of youthful crimes. Why this happened is instructive. Sociologists have offered four main explanations from which we may draw, should a similar economic calamity hit the region:
- 1) Where economic pain is more or less equally distributed, where everyone’s made “flat”, as the Great Depression certainly did, at least for a great many in the population, crime tends to remain low.
- 2) Large numbers of parents, relatives and other adults out of work often means more parents, relatives (aunts, uncles, big brothers and big sisters) and other adults staying at home, thereby exerting greater influence and control over potentially errant youthful behaviours.
- 3) Large-scale absence of external economic means of support generally translates into greater reliance on storehouse of indigenous, internal resources (barter, sharing, religion), which then strengthens communities against crime and criminality.
- 4) Dread economic times result in no goods to steal—shops are boarded up; supermarket shelves are empty; fewer fashionably dressed, heavily jewelled people around to mug; no armoured truck transporting huge amounts of cash. There’s simply nothing, and no one, to rob.
Crime is at its most alarming levels under conditions of glaring socioeconomic disparity; when the pain is not evenly distributed or felt; when a rising tide does not lift all boats, or many boats; or when the competition for available goods is fiercest.
Jamaica and the Caribbean needn’t long, though, for an economic depression to cure us of our terrible crime problem. Now just may be the time for the region to begin anew to re-inculcate within national cultures and conversations simple facts about co-existence that periods of massive and prolonged hard times have a forceful and unpleasant way of bringing out.
See, e.g., Raymond Paternoster and Shawn Bushway, “Theoretical and empirical work on the relationship between unemployment and crime”, Journal of Quantitative Criminology 17 (4), 2001: 391-407
See, e.g., Barry Goldson and Janet Jamieson, “Youth crime, the ‘parenting deficit’ and state intervention: a contextual critique”, Youth Justice 2 (No. 2), 2002: 82-89
Monday, February 16, 2009
My time spent at SALISES (Sir Arthur Lewis Institute of Social and Economic Studies) has left an indelible imprint. As a proud graduate (MSc. Governance and Public Policy -- 2007) I have drawn upon the many lessons learned from that gruelling, yet marvellous experience at the Mona Campus. My instructors not only introduced me to interesting concepts such as good governance, globalisation, decentralisation and citizen participation; more importantly they challenged me to employ a critical eye toward the myriad issues which permeate our global reality. While I continue to hone my skills toward analyzing matters which affect the Caribbean and the world at-large, I wish to share a matter of territorial concerns which impact my home, Belize.
BELIZE’S CONTEXTUAL UNIQUENESS
Many in the wider Caribbean may not be aware of pressing territorial matters which affect the handful of land-based Caribbean territories such as Belize (formerly British Honduras). With the exception of three, possibly four CARICOM Member States, such terrestrial issues are not a reality. Nonetheless for Belize, these are issues of national interest/security and is virtually part of our genetic make-up.
MILIEU & THE ISSUE
Since time immemorial, Belize’s neighbour to the West, Guatemala, has asserted a claim on Belizean territory. The land which currently comprises Belizean territory can be referred back to June 7th, 1494, when the Treaty of Todesillas was signed, and the “New World” was apportioned between Spain and Portugal. The arguments in defence of the claim have taken a variety of forms over the centuries and the counter-arguments have (for the most part) remained consistent.
The Battle of St. George’s Caye, September 10th, 1798, is a source of pride for many Belizeans. In fact it is a national holiday commemorating the defeat of Spanish forces, by the territory’s inhabitants. Amidst numerous occurrences over the years, the Clayton Bulwer Treaty of 1850 acknowledged the legitimacy of British Honduras. The 19th century saw numerous engagements between the Governments of Guatemala, the United Kingdom to resolve the former’s unfounded claim.
Fast-forward to the late 20th & early 21st century and there are many significant developments including: Guatemala’s assertion of the “Belice es nuestra” (Belize is ours) doctrine; several aggressive military mobilisations by Guatemala threatening invasion (1972, 1975 & 1978); Belize’s Independence (1981); the issuance of a defence arrangement from the British and its subsequent end in 1994; numerous stalled and failed talks between Belize and Guatemala; Belize’s continued attempts to facilitate Guatemala (such as the passage of the Maritime Areas Act in 1992) and the adoption of a Guatemalan strategy of encouraging the illegal encroachment of its citizens onto Belizean territory. The latest round of diplomatic efforts involved an attempt at mediation by the Organisation of American States (OAS). This led to the current initiative – the December 8th, 2008 signing of a Special Agreement or Compromis between the Government of Belize (GOB) and the Government of Guatemala, which sets the framework for this issue to be decided at the International Court of Justice (ICJ).
Diplomats worldwide have touted this as an outstanding step toward settling the age-old dispute and eventually normalising relations between the two countries. Although, on the surface, the recent decision may appear laudable, I take a more realistic view. The decision of the GOB to potentially seek adjudication via the ICJ is too risky and quite frankly unnecessary. I have heard the wide range of arguments on both sides and think there may be more to this scenario than meets the eye!
Being a proud Belizean who upholds the nation’s Constitution as the supreme law of the land I believe the aforementioned decision to sign the Compromis is tantamount to an affront to Belize’s Constitution. Within certain circles it has even been likened to an act of treason! I recognise the importance of diplomacy and advocate no other approach, yet given the relevant history, diplomatic efforts on the part of Belize have abounded, despite marked and repeated intransigence on the part of Guatemala. Pundits like to refer to “the Guatemala question”. In my humble opinion there is no question, where Guatemala is concerned. The matter is straightforward, for Belize is: (1) a sovereign nation, (2) a legitimate member of the international community and (3) a full member of the United Nations -- WITH ITS INTERNATIONAL BORDERS INTACT! To buttress my opinion, I draw upon successive UN Resolutions beginning in 1975 which affirmed Belize’s right to secure its independence with all its territory. The 1975 Resolution further pronounced that any proposals emerging from negotiations between the two countries must respect this right. For five successive sittings of the General Assembly, this position was reinforced, eventually leading to Belize’s independence.
Although the diplomatic community has lauded the Compromis, I believe the Government of Belize acted in a risky and short-sighted manner. I hold this position because by singing the Compromis, the GOB may be considered to have given credence to the possibility that Guatemala’s claim has enough merit, to warrant it potentially being taken to the International Court of Justice (CJ), despite the long-standing legitimate recognition of Belize by the world community. This, for Belize and all Belizeans, is a terrible mistake. Such actions have potentially weakened Belize’s position in this matter of unparalleled national significance. Diplomacy can be engaged in, conducted and successfully concluded, via degrees and I believe that Belize’s Ministry of Foreign Affairs has lost sight of this.
I welcome a final settlement, via diplomatic means. Yet, given the context I draw upon the counsel imparted to me by my parents, “…nothing in this life is guaranteed, save for the fact that one day we must all expire”. While entrusting the matter to the ICJ, we must remember that whatever the decision, it is final. This is entirely too risky for Belize! I am not comfortable placing the fate of Belize in the hands of the learned individuals who serve on the ICJ, no matter how strong Belize’s case may appear. Belize has too much to lose in this process while Guatemala only stands to lose their unfounded claim. Placed on the proverbial scale, an unfavourable decision for Belize could very well mean a loss of already scarce territory. Let us not forget that with the recent growth in oil exploration in Belize, various untapped resources of prospective economic viability could potentially be forever lost. Honestly, who do you think potentially stands to lose more, by going the route of the ICJ?
I believe in the basic tenets of good governance. Therefore, I understand that the recent signing is but the initial step in a process. Although I am utterly disgusted with the decision to explore this route, I rejoice that Belizeans will be afforded a say in whether or not to proceed. Therein lies the intrinsic challenge. Persistent societal ills such as voter apathy, the lack of civic pride, the ever-declining levels of citizen participation and outright ignorance of the matter at hand, must be overcome. That is why it is imperative that those who share my view concerning the unmitigated risks to Belize, must become constructively proactive toward addressing the issue. Belizeans from all walks of life, especially civil society, must concertedly embark on a public information campaign which clearly analyses the issue in its entirety. Without such an effort Belizeans could potentially go to the poles, in a referendum, with less-than-adequate information with which to make an informed decision. That is if we even opt to participate in the process!
I alluded to the possibility that there may be more to all this than meets the eye. I cast no aspersions, but faithfully hope that those who have been entrusted with the honour of governing Belize’s affairs in a responsible manner are not engaged in what could potentially amount to an extremely high stakes endeavour of international proportions, simply for political gain. I admit the position regarding this observation is speculative, but whenever the human element is factored into such an equation, there exists the possibility that the motivation toward solidifying some form of legacy, could very well be at the core of this effort. Recently, elements of the local press reported that certain high ranking government officials have made unfortunate remarks which insinuate that if Belizeans don’t go the route of the ICJ, we should then be prepared to “take up arms”. Such rhetoric is regrettable, irresponsible and grossly misleading. Hence, my position that Belize’s Ministry of Foreign Affairs has seemingly lost sight of the fact that diplomacy, devoid of ego, is the most tenable route toward success.
I call on Belize’s civil society to awake from its perpetual slumber and apply critical analysis to the overall issue by: (1) establishing whether Belize’s Constitution is the supreme law of the land, (2) determining whether the international recognition of our nation-state is of any consequence, (3) deciding whether the associated risks of entering this Compromis are minimal enough to warrant placing Belize’s territorial integrity in the hands of the jurisprudence of the ICJ and (5) ultimately take proactive steps to educate the general public. Belizeans must become aware of what precisely is at stake and make an informed decision.
For me, Belize’s Constitution takes precedence in all matters relating to its territorial integrity and sovereignty. The associated risks are too great to undertake the ultimate course of action set in play through the signing of the Compromis. Finally, Belize’s current existence is already, legally, recognised by the international community.
Long live Belize in its, current, legal and geographic legitimacy!
Tuesday, January 13, 2009
Government initiatives are often motivated by good intentions and excellent analysis but usually fall short at the implementation stage. Additionally, the civil service in Jamaica is often characterized by a shortage of resources and a plethora of aging, unmotivated mandarins. This combination equates to slow government, bad implementation and missed targets.
However, this is not always the case. As a civil servant for the past seven (7) years I have observed that for every three (3) ‘in-by-nine-out-by-four’ unproductive civil servant there is one (1) savvy, computer-literate, motivated go-getter. This minority of motivated individuals is, in my estimation, the buoy which keeps the civil service from sinking into a rising tide of bureaucratic morass.
One lasting lesson of my SALISES (Sir Arthur Lewis Institute of Social and Economic Studies) experience was that “good policy” is equal to “evidence-based policy.” We were told that research, literature reviews and the like are mandatory exercises even when sharing an opinion. As students we thought “how bothersome!” While this endearing principle is necessary for success students will soon learn that in the world of work there is sometimes very little space and time in the policy cycle for serious investigation. Lecturers should let students know that exigencies can and will highjack any process.
The policy process in government is oftentimes starkly different from the clear cut theoretical policy cycle fed to students. The process is messy and caters to personalities as much as it deals with on the ground reality. Students who venture into the wilderness of work will find that every report must be succinct and cannot necessarily explore nuances; and knee-jerk reactions are the order of the day. While thorough investigation of any matter is still of value there is usually little or no time.
Additionally, in government there are rarely any incentives for the ordinary civil servant to employ rigorous methods. Furthermore, there seems to be a ‘disconnect’ between policy-writers and the persons implementing policy. The notion that Ministries are policy-shops and Agencies the implementers--people of a lesser breed (but sometimes better paid)--creates several problems not only for morale but also for how policy gets made.
It is against this background that I share the following experience both as a past student of SALISES and a career civil servant (civil servant by choice).
In 2007 there was a sharp and unprecedented increase in the local price of most grades of fertilizer. According to the Ministry of Agriculture (MoA) some blends of fertilizer used by small and domestic farmers saw price increases of as much as 337% during the period. Blends used by commercial farmers also saw an increase of between 183% and 391%.
Policy analysts quickly concluded that the consequences of these price increases were manifold. The inability of farmers to access the quantity or grade of fertilizer needed would be dire for an already vulnerable Jamaican economy. Ultimately fertilizer price increases would result in lower agricultural output and increased food imports. This is a situation the government is desperate to avoid given its ongoing initiative of “eat what you grow and grow what you eat.”
$95 Million Subsidy
According to the MoA the first real initiative would see the Minister of Agriculture, Dr. Christopher Tufton, negotiating with the sole inorganic fertilizer producer in Jamaica, Newport Fersan, for a reduction in prices. In actuality the intervention led to government providing the company with a $95 million subsidy from November 2007 to March 31, 2008. Fersan made a convincing case that the enormous increase in the prices of the twenty (20) blends of fertilizer it produces was beyond its control. The company attributed the price increases to a higher demand for the raw materials it uses by China, India and Brazil. The company also said it was facing increased shipping costs. The subsidy offered to Fersan was intended to reduce ex-factory prices of a bag of fertilizer by 10%. However, Newport Fersan increased its prices by 40% in March 2008 effectively nullifying the subsidy
The MoA indicated that the second initiative would have government waiving the customs user fee and environmental levy for raw materials used in the production of inorganic fertilizer. This was in addition to no custom duties being charged on fertilizer raw materials except Urea. The government also secured through PetroCaribe a 40% price discount on Urea to be imported from Venezuela. Fersan indicated that this effort would have produced a 36% reduction in the ex-factory price of Urea and at least an 8% reduction in the price of all blends using significant amounts of Urea. However, it would not have led to significant price reductions in the blends such as 14-28-14 used primarily by small or domestic farmers.
Hence, the government continued to have serious concerns that the most vulnerable farmers were still facing high costs in relation to fertilizer. Furthermore, a MoA technical working group report highlighted the fact that Caribbean territories which imported fertilizer recorded lower prices than the ex-factory price offered by Fersan; the government sought clarification from Newport Fersan on its pricing method and mark up. However, the company refused to divulge the information.
Government Fertilizer Importation
It was at this point that government indicated its intention to enter the market directly. The third initiative was for government to import selected blends whose local prices remained high despite previous interventions. As such the government moved initially to import a total of 2,500 tonnes of three blends 14-28-14, 16-9-18 and 11-22-22 from the USA; with a further 25,000 tonnes to come from Russia later. The 2,500 tonnes were to arrive in 5 shipments of 500 tonnes each.
The immediate effect was a drop in sales at Fersan even before government-imported fertilizer reached the market.
The implementation of this policy saw government using the Jamaica Commodity Trading Company (JCTC) from the Ministry of Industry, Investment and Commerce (MIIC) to handle the importation and distribution of Diamond R. Fertilizer from Florida.
The three blends were well received by the market with the only complaint being about its offensive odour. Users indicated that the average ex-factory price of $1438 per 50-lb bag and high crop yield potential made the product very affordable and worthwhile.
Shortcuts and Hard knocks
The implementation stage of the fertilizer importation project was rushed. The needs of the farmers and the potential fallout from not having fertilizer far outweighed any other concern. The policy was therefore undertaken without the requisite systems or infrastructure arrangements being in place before the first shipment arrived.
Thrown into the heart of the operational aspect of the JCTC was this proud graduate of SALISES. The responsibilities of the title-less, over burdened civil servant escalated from Trade Policy Issues to simultaneously managing five contracts for the repair of a borrowed KFZ warehouse and handling the logistics of using one ramp to unload nineteen (19) containers (500 tonnes) of fertilizer weekly from 8 am to 8 pm. This was to be done in addition to selling the product. The warehouse facility had no lights, running water or toilet facilities for the first two weeks of the operation. The yard space was barely large enough to hold each shipment let alone allow for maneuvering customer’s trucks for loading. This situation underscores the conditions under which many civil servants especially those who implement policy will have to operate.
Many in the Ministry had concluded from the inception that more work for the same pay was unacceptable and avoided being drafted into the process. They also scorned the idea of being at the tail-end of the policy cycle as much as they did the “smelly” fertilizer.
These conditions should have allowed even the best laid plans to fail. But, the unwavering commitment of a handful of willing mandarins who were not above working in fertilizer was more a factor in successful implementation than available resources. This success can be measured by JCTC sales of over $150 million worth of fertilizer to date. The civil servants at the warehouse bought into the idea that Jamaica needed this initiative. We were willing to work long beyond the prescribed hours, use car headlamps to light dark warehouses, “pee pee a bush” (relieve ourselves in makeshift restroom facilities) and spend our own money to purchase lunch and supper for casual labourers involved in the loading of trucks. The creativity spawned by the adversity we faced was not uncommon for motivated civil servants.
The advice to SALISES lecturers who teach policy is that while resource allocation is essential to successful implementation students must be taught about the importance of buy-in at all levels and how it can change the complexion of any initiative.
The fertilizer initiative can also be rated a success in so far as it has brought relief to the most vulnerable farmers and reduced/suspended the fallout from reduced agricultural production. Not surprisingly, there have been calls from many quarters for government to become a permanent player in the inorganic fertilizer market. Policy analysts including this writer are now left to grapple with the following.
Based on an unofficial cost assessment the government has incurred a loss of approximately $55 million because of the importation initiative. Also, the deal to secure an additional 25,000 tonnes of fertilizer from Russia which was to be cross-subsidized and used to rescue government from a loss-making position has fallen through. Furthermore, Fersan’s ex-factory prices have been significantly reduced making all blends of inorganic fertilizer cheaper. Government also has a concern that its continued intervention may drive Newport Fersan out of business. These and other factors should lead government to exit the market in February 2009 once its remaining stock of approximately 300 tonnes of fertilizer is sold.
However, stakeholders have indicated a preference for the mix of fertilizers being imported by government. It is claimed that the yield from these products are superior to similar blends offered by Fersan. This claim is yet to be substantiated. In addition, stakeholders believe that the reduction of Fersan’s prices is not solely due to changes in raw material prices but as a direct result of competition. Additionally, it is my opinion that the purported loss of $55 million incurred by government for the importation and distribution of selected blends of fertilizer has yielded better results and costs less than previous interventions/subsidies.
SALISES could not have prepared me for every scenario I would face in government especially as it relates to the operational issues of a warehouse, procurement and overseeing contracts for repairs. However, the confidence gained as a student enabled me to see past the obvious and work toward solutions. It is true that critical thinking was an unnamed part of our curriculum. SALISES must therefore do these two things (1) continue to cultivate evidence-based policy-makers and (2) place more emphasis on exercises which develop critical thinking.
Finally, the time I spent at SALISES allowed me to reorder my thinking. The Institute and its lecturers have given me one of the greatest gifts, a reliable compass with which to navigate the Jamaican public policy terrain.