Infrastructure and jobs

One of the signal failures of the PNC-led coalition Government since 2015 has been its callous cop-out statement to the people of this country, foundering in the highest employment rate in the region, that “governments do not create jobs”. Granger has declared that he is focusing on “education” and “infrastructure”, so we can expect more of the same stagnation in the job sector if he is to be re-elected.
But after the PPP, in 1992, inherited the disaster that was bequeathed after 28 years of PNC ministrations, they were able to create jobs as well as improve the delivery of education, besides building infrastructure.
The PNC has created a false dichotomy between jobs and infrastructure. Schools, roads, bridges, hospitals are all good; but of what use are schools if the graduates cannot find jobs with their “education? Of what use are roads if the ordinary citizens cannot afford the price of gasoline, much less the price of a car to get from here to there because, at best, they are stuck at subsistence wages if they’re lucky enough to have a job?
When a person has a job that can provide the basic needs of his family – food, shelter, clothing, and perchance transportation – then this is the beginning of a life of respect and dignity. Handouts such as providing “boats, bicycles and breakfasts” to children, can never accomplish this. Even if citizens do not have all of the infrastructure, once there are jobs, the infrastructure will come. Jobs mean businesses and enterprises and these mean taxes – both personal and corporate – for all levels of government. People with jobs will assert themselves and demand that the Government use those taxes to provide the amenities of infrastructure. The people may even create the infrastructure for themselves. It is quite a virtuous circle.
Even though it has failed, the PNC are lazily following the neo-liberal model of economic development that was foisted on them by the IMF/World Bank combine. They insisted that if we liberalized our economy, privatized the state corporations, and kept a tight rein on our macro-economic fundamentals, investments would pour in to generate jobs. Well, it has not worked out this way for the simple reason that it has not succeeded in transforming any poor country.
Countries in our situation cannot stand on dogmas, but must tailor their policies to suit their own circumstances. Even the IMF/World Bank had grudgingly conceded this after the 2008 global economic crash. Our circumstance – whether due to political instability or other factors – is that even though the commercial banks are awash in cash, the latter is not being intermediated into investments that deliver high-paying jobs. The countries that have succeeded in pulling themselves out of poverty – the Far Eastern Flying Geese and most recently China – all have governments that were much more engaged with custom-tailored, job generating industrial policies.
These governments adopted a catalytic role for development; set strategic goals, and then did whatever was necessary to back into them. For instance, Korea, Singapore and now China followed the Japanese example and explicitly tied assistance to selected private industries based on their commitment and ability to export. This strategic decision had two significant and faithful results that differed from the old “import substitution strategy”.
Firstly, the assisted firms were subjected to the market discipline of the competition of international trade. This was the most intense competition, and ensured that efficiencies and productivities had to be raised to the highest levels. These firms not only could not afford to be fat and lazy, but had to become world class – and they have remained world class. The second benefit, of course, was that the exports brought in foreign exchange, and there was no need to ban anything to save foreign exchange.
We know that, under our present mentality, there will be much griping when certain firms will be selected for governmental backing. But once the criteria are set and applied objectively, the selection can be defended, especially when jobs are created.