Wed | Dec 12, 2018

Damion Crawford | Human-capital spending an investment, not a cost

Published:Sunday | October 28, 2018 | 12:00 AM
Damion Crawford
1
2

Mark Ricketts generally writes interesting and highly informative articles on matters of national, regional, and global importance. In his most recent contributions, he has tackled the costing issues surrounding the Covenant for Social Transformation that Opposition Leader Dr Peter Phillips made with the Jamaican people on September 16, 2018, at the party's annual conference.

Ricketts contends that while the desire is noble, the costs to deliver the major elements of the transformation are exorbitant and will not be accomplished if Phillips were to form the next Government. He identified two big-ticket items, land reform and the proposal of one scholarship per family. I would like to comment on the latter as this is a subject very close to my heart.

With the tight fiscal space that Jamaica has been operating in over the last three decades, it is not unreasonable for persons to always view public policy pronouncements through the prism of dollars and cents.

Unfortunately, taking this narrow view on education will not only keep us poor, but will lead to massive social problems that would erase any gains that are made in terms of economic growth and sustainability. For it is the human capital that is the most important resource in economies such as ours, and if it is not developed at an internationally competitive level, no amount of fixing of the macroeconomic indicators will lead to the type and quality of economic growth Ricketts and all of us desire.

It is the World Bank president, Dr Jim Kim, who correctly noted that countries need to invest more and more effectively in their people.

Kim's observation came as the World Bank recently published its Human Capital Index looking at how much countries invest in their young people. The bank noted that the higher the investment in education and health, the more productive and higher earning the workforce tends to be, which eventually leads to higher wealth and a stronger economy.

It is not surprising, therefore, that the stronger-performing economies of the world are atop this ranking while the weaker-performing economies are at the bottom of this ranking. Singapore tops the ranking while countries in Africa dominate the bottom. South Sudan, Niger, and Chad are in the bottom three of 157 countries. The stronger economies have invested heavily in educating their population, while those weaker economies have spent much less on education.

If Ricketts thinks it will be costly to find the nearly J$2 billion to give one member of every Jamaican family a chance to attend university, he should think about the negative impact of not making this investment on growth and economic resilience that we all desire. For with more than 900,000 persons in the workforce not having any qualification beyond the secondary level, this is indeed the greatest drag on our productivity and competitiveness as a nation. Dr Phillips' education agenda is aimed at reversing this trend once and for all and creating a Jamaica that works for all and not just a privileged few.

 

Inequality and Growth

 

While we are celebrating the stability of the macroeconomy and the positive growth numbers that we have been seeing in the last few years, global organisation Oxfam is warning about an incipient problem. In its latest report on measuring inequality Oxfam showed that Jamaica is becoming a society where inequality in the distribution of wealth will pose a serious threat to economic sustainability.

The only and sustainable way to reverse this inequality is by providing highly internationally competitive education to all so that every citizen can participate effectively in the global economy - and win. With so many of our youth not benefiting from tertiary education, which provides them the passport for full participation in the knowledge economy, spending less than one per cent of our budget to give every family a chance to survive and prosper cannot be beyond us. We should not be talking about the cost in the traditional way when it comes to developing our human capital. Instead, the discourse should be about how we effectively invest in this resource to get the greatest level of return. The People's National Party's (PNP)s firm commitment to this social transformation in education is at the heart of reducing the levels of inequality, which is the greatest threat to long-term sustainable economic growth.

I submit to Ricketts and others that the linear thinking about costs in relation to the development of our human resource will lead to more harm than good.

It is not only short-sighted but dangerous to leave the development of this critical resource to the vagaries of the market, which will leave too many persons behind as the starting point is not the same for all individuals. Direct strategic intervention by the State in dealing with our human resource challenge is a noble endeavour, especially in a postcolonial society like ours which is more biased towards inequality. Dealing with these social transformation issues with direct strategic intervention of the State is a fundamental policy difference between the PNP and the governing Jamaica Labour Party.

While it is accepted that the fiscal space is tight in Jamaica, we cannot continue to argue about the costs. The issue is one of priority. We are not arguing that we should spend wildly on education and training, but instead, we will strategically invest in the development of the human resources so that every family in Jamaica can have a chance to participate in the knowledge economy.

We do not generally hear the cry about costs when we are investing in massive infrastructure works. For it is easy to invest in infrastructure and those things that bring immediate political gains as the outcomes are more visible, and politicians can brag about what they have done.

However, building modern infrastructure and not having the quality human resources to manage and maintain it will not lead to sustainable longer-term economic growth and a Jamaica that works for all.

An investment in educating our people, while the results are not immediate, will definitely lead to the types of economic outcomes we want in the long run. The World Bank correctly noted in the recently published Human Capital Index that "investments in the human capital resource have large payoffs for individuals, societies, and countries".

The aim of one scholarship per family is geared at this outcome.

- Damion Crawford is an opposition senator and vice-president of the People's National Party. Email feedback to columns@gleanerjm.com.