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| Are we up to the challenge? |
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Simon
Published: Jun 19, 2012
During the election campaign both major parties committed to long-term national planning. Former Prime Minister Hubert Ingraham promoted Jubilee Bahamas, a 10-year national planning process leading to the 2023 independence jubilee. Given his record, such a planning exercise would have been conducted extending the plans and accomplishments of his former administrations. As it did with a number of other policy matters, the PLP followed suit, adding a twist: It promised a 30-year plan. Notwithstanding this copycat, and that 30-year plans tend to make little sense in terms of realistic planning, it remains dubious that the incumbent government will, given its past, fulfil its pledge. But long-term planning going forward is critical, and not just because such planning is perennially essential. We are, today, in the midst of some of the more dramatic structural changes facing the country post-independence. These changes are varied and complex. They include globalization, urbanization, economic and political modernization, and the interrelated demands of energy security and a complex of environmental issues. These meta-challenges are occurring amidst, and are part and parcel of a combination of a deep cyclical “financial crisis-based recession” and a variety of structural changes sweeping the globe. The better news, if we can call it that, is that we may experience a series of rolling recessions lasting the remainder of this decade, and related structural challenges stretching into the future, all resulting in widespread economic and social dislocation. The bad news is that much of the world economy can falter into a depression.
Global context This is the global context of which any national planning must take full measure. While many more Bahamians suspect that we are entering a new normal, constituting a daily struggle to make ends meet and persistent anxiety about the future, many may not realize the nature, scope and depth of the challenges we face. We are not solely experiencing the typical cyclical recession of which Bahamians of a certain age remember, and which usually lasted for a relatively short period. The turnaround in some tourism indicators should not obscure our deep-seated challenges. The structural changes with which we are faced are wide-scale. Some of them have been partially discussed and hinted at by political and financial leaders. But the broader scope of these challenges is not fully appreciated by many politicians, business people, academics or journalists. In turn, these opinion leaders have failed to articulate anything approaching the breadth of our challenges, much less the fundamental changes to our way of life they will bring about. So, even while an increasing number of Bahamians sense that we are entering a new world, they may not yet appreciate what responding to that new world will entail on numerous fronts. The unprecedented level of change will be staggering. Communicating the reasons why and responding to such change will not be easy for the political class, especially those still pandering to the mindsets of yesteryear even as events outstrip the make-believe they seek to pass off as reality. Take something like a value-added tax (VAT) which the Christie administration has discussed introducing. Such a tax seems imperative in light of our accession to the World Trade Organization and desperately-needed state revenues. But how does a government introduce such a tax to a populace used to taxes hidden in plain sight but unaccustomed to a tax measure like VAT? How does one sell the need for such a tax change to a high consumption society, inclusive of an often brand-name and status-obsessed middle class that has an entitlement mentality when it comes to what is demanded of government? Tax reform is only the beginning. There are other potentially wrenching reforms on the horizon if The Bahamas is not to fall behind – way behind, on various fronts.
Fundamental changes Globalization, not the fact of, but the nature and imperatives of change across the continents will have far-reaching implications. Think of the fundamental changes in our financial services sector wrought by advanced economies, and the fight over the privatization of BTC. Now multiply these many fold, and one gets a sense of what is on the horizon. Changes like global aging, the shift in China’s growth model to greater domestic consumption, and fundamental socio-economic and political changes from the U.S., Europe and Latin America to Asia and the Pacific will pose opportunities and challenges to the way the nation and government conduct its business, and the business of business. In subsequent columns the challenges of urbanization and the attendant issues of crime and socialization will again be explored. Political modernization concerns the reform and modernization of the role and functions of government, including the level of public sector employment, and the privatization and monetizing of public services. Economic modernization concerns far-reaching technological changes and the development of human capital in areas such as education, training and innovation, as well as the sustainable provision of social goods such as healthcare. One burning question is how much the state can afford in terms of social welfare, and who pays for it. The Christie administration will soon face this question as it has promised comprehensive National Health Insurance. The pressures on the government will be immense from insurance companies to healthcare providers to those who may foot the bill for NHI. The administration also faces its gargantuan promise of doubling investment in national education. Finding the resources alone will be a monumental task. But as importantly, what is the PLP’s vision of education reform? Thus far, we have heard mostly platitudes and generalities. To truly reform public education will require considerable improvement in the quality of teaching. There is no route to improving student performance without overhauling the manner in which we hire and evaluate teachers inclusive of issues of tenure and testing. If we fail to get the human capital equation right, especially in areas like education training and innovation, our other public investments will account only for so much in terms of productivity and competition. In the area of training, our efforts should be targeted, consistent and practical, not wild-eyed about what may be possible given various cultural and sociological realities.
Human capital Also in terms of sociology, our great challenge in the area of human capital is building the capacity of scores of unemployed young people now facing formidable difficulties in terms of employment and the world of work. As critical, is the basic human development, education and training of young males, the source of both great economic potential and major crime. And then there is the challenge of energy security amidst ever escalating energy costs which is vexing homeowners, businesses and the competitiveness of tourism and other industries. The upcoming Rio+20 Summit, the UN Conference on Sustainable Development, will again highlight the complexity of global environmental challenges including that of climate change. At home, from ocean acidification to rising sea levels to biodiversity, we are faced with environmental challenges that are more than structural. They are elemental to our survival. In the question of drilling for oil in The Bahamas, the issues of environment and profit collide. While we are all faced with these challenges, the ability of our political and business leaders to understand, navigate and communicate the new world and the new Bahamas we are facing will be pivotal. When China shifted towards capitalism and Singapore transformed itself into an economic powerhouse, it was the collective insight and dynamism of its political, business and academic elites who made these countries cutting-edge economies. Though a smaller country we are faced with the same imperative. Are we, and our elites, up to the challenge?
•frontporchguardian@gmail.com www.bahamapundit.com |
