Byles: Jamaica needs to create high-value jobs Published:Fr

“Thank goodness for them because they are jobs, and the people getting them didn’t have any before,” said Richard Byles. “But they are the same jobs that we produced 20 years ago, whether it is in the hotel sector (or) the BPO business. It’s the same kind of low value-added.”

Governor Byles, speaking against the background of anaemic economic growth, suggested that the only solution to that is a better educated workforce.

“And that goes back to primary school, secondary school and what you train people for at university level,” he said, while addressing a media luncheon at the central bank’s headquarters on the Kingston waterfront on Wednesday.

“With all due respect to the lawyers who are present,” he added, “I don’t think Jamaica needs …”, but before he could finish his statement others chimed in, “more lawyers”, to which Byles responded with a laugh: “I didn’t finish my statement.”

He continued: “So where we put our resources in training that human capital is important at the university level, and at all other levels, too.”

The Jamaican economy is yet to break through to two per cent annual growth despite several years of reforms, and is currently tracking at 1.3 per cent, based on Statin estimates for the June second quarter.

The market value of Jamaica’s annual economic output is just over $2 trillion, or $773 billion in real terms.

For the first half of 2019, economic output has been estimated at $1.05 trillion, or nearly $393 billion in real terms.

Jamaica is now in its 18th quarter of uninterrupted expansion, which has led to improvements in the job market and a record unemployment rate of 7.8 per cent.

Byles, however, appears to be concerned not about the number but the quality of the jobs that are available, and how to go about developing better-quality workers.

“We do need to give people a real foundation with primary education and invest in our secondary schools so that it’s not five schools, four of which are girls’ schools, that are at the top, but [that] the good schools are all over the island and are in multiples,” said the central bank chief.

“That’s a long-term vision, and that’s what we need now more than ever,” he said. “We need to turn our attention to transformation, some long-term goals, and putting the resources behind those goals.”
Big debt burden

He pointed out that the fact that Jamaica has a big debt burden means that Government has to devote a lot of resources to paying it down rather than using it to contribute to growth.

That burden, in March, equated to around 95 per cent of GDP and is currently estimated at $1.95 trillion.

“So all of those tax dollars that are coming out of your pockets and my pockets, instead of doing what we would like, such as build schools, roads, hospitals, is paying down debt. So it’s almost like reducing the capacity of the economy to grow,” he said.

He said that until Jamaica can get that debt down to 60 per cent of GDP – which is an international benchmark for debt sustainability – its liabilities would remain a drag on real growth.

“But once we start to approach 60 per cent and achieve it, a lot of those resources will become free to invest in the economy,” he added.

The BOJ governor also noted that Jamaica has a high dependency on some sectors, such as agriculture and mining, whose contraction acts as a drag on the economy even when star performers, like tourism, are growing robustly.

“So, in a way, when you look at the single number of GDP growth, behind it there is a variation occurring, and the heartening news is that some of the areas that are growing are good leading indicators for the future,” Byles said.

He added that his pet concern was that Jamaica was not selling enough to foreign markets, saying it’s the route to growth for small economies like Jamaica.

“We need to sell to the wide world, and on that basis we will explode our growth potential,” the governor said.