A quality public sector engendered by quality training is critical to economic growth

March 25, 2018

There has been much debate recently about the need for the Jamaican government to reduce the public sector wage bill, which often translates into the need to cut the size of the Jamaican public sector.

The International Monetary Fund (IMF) which is the main influencer of government policy over the last two administrations has repeated the importance of bringing the public sector wage bill under nine per cent of GDP from its current level of about 10 per cent.

The last several weeks have seen the trade unions representing public sector workers (teachers, nurses, police, civil servants etc.) battling with government over wage increases ranging from two to six per cent per annum.

So far the effort to slash the size of the public sector by way of the Special Early Retirement Plan is not having the desired effect, with only 260 of the expected 1700 government workers taking up the offer before the deadline was extended early this month.

While not second guessing the importance of the nine per cent of GDP target, perhaps it an opportune time to emphasise that the cutting of the wage bill ought not to be at the expense of developing a cadre of loyal, highly trained public servants, serving the Jamaican government across administrations.

As pointed out by former Prime Minister Bruce Golding in his article “Public sector employment, compensation and transformation” in the Jamaica Observer on January 14, 2018, “teachers, security forces and health workers comprise almost two-thirds of the entire public sector workforce, and large-scale staff cuts there would have dire consequences for those vital sectors. Further, the upfront cost of redundancies would require several billion dollars that would have a catastrophic impact on the fiscal programme.” In short, wide-scale public sector job cuts is a non-starter.

The former Prime Minister states further that rapid increase in economic growth would make the nine per cent target possible while still providing robust wage increases for the public sector.

With so much focus on the size of the public sector, more emphasis should be placed on the quality of government workers and their role particularly in developing countries such as ours.

One need look no further than Singapore, the much quoted Asian island state that in the 1960s was at the same stage of development as Jamaica. Most experts agree that Singapore’s economic success was in large part due to its strong emphasis on its education system to develop its human capital. This provided the skills to satisfy the needs of the emerging private sector, as well as a customer-centred public sector to facilitate the growth of business.

As stated in the Organisation for Economic Co-operation and Development’s (OECD) Programme for International Student Assessment report of 2012:

“From Singapore’s beginning, education has been seen as central to building both the economy and the nation. The objective was to serve as the engine of human capital to drive economic growth. The ability of the government to successfully match supply with demand of education and skills is a major source of Singapore’s competitive advantage.”

According to the 2011 report “Public sector performance, A global perspective” from the Chartered Institute of Management Accountants, Singapore provides an example of “good, cheap government”.

“Currently Singapore spends about 19 per cent of its GDP on public services, well below the world average. Of course it benefits from a small population and compact territory. Despite this level of expenditure, Singapore sweeps the board on many measures which indicate the quality of its public services. It scores very highly on measures of educational attainment (fifth in the world for literacy; second for mathematics and fourth for science). Life expectancy is 82 years (sixth best in world). GDP per capita is more than $62,000 (sixth highest in the world); and is expected to grow by more than five per cent annually for the next three years. Unemployment is currently 2.8 per cent.

Boasting these impressive accomplishments, for Singapore, as Chronixx would say “success don’t come overnight”. Indeed it was the creation of right environment for investment, not the least of which was a highly trained workforce and public service, prepared through the emphasis on a world-class education system.

For this to happen in Jamaica, the state must have in place a quality education infrastructure inclusive of highly motivated education practitioners at every level of the education system.

Government’s allocation of $615.6 million for work on the Public Sector Transformation Implementation Project this year is an indication that public sector is being taken seriously. We await further details on the process as Jamaica’s tertiary institutions, both public and private, stand ready to partner with government to provide the human resources needed for rapid economic growth to become reality.