Cedric Wilson, Contributor

He did not see a blinding light, neither did he hear the sound of a rushing, mighty wind. Yet he knew his time had come. So Aldain Reid resigned his job along with the security that went with it, and formally established RDI Caribbean.

Now two years later, RDI Caribbean, an international training institution, which offers high-quality programmes from United Kingdom-based universities, has seen impressive growth and is making inroads into The Bahamas, Turks and Caicos, Cayman and the British Virgin Islands.

Mr. Reid, who is also president of the Young Entrepreneurs Association (YEA), is convinced that entrepreneurship is critical in achieving rapid sustainable growth in Jamaica. And he is right.

If you consider the Jamaican economy with per capita income a mere one twelfth of what exists in the United States and one third of what obtains in Trinidad and Tobago, then you would have no difficulty accepting Mr. Reid's position. However, this perspective becomes more persuasive when you understand that it is not simply a question of where you are at present, but how far you can go, given your circumstances. The journey from Kingston to New York is a couple hours by plane but by sailboat, it might take a perilous fortnight, if not longer. The public debt is approximately 132 per cent of the country's total annual income (GDP) and about 31 per cent of that income is used for debt servicing. This, of course, puts enormous constraints on the economy and expresses itself in a thousand and one different ways - deficient health facilities, severe unevenness in the quality of primary and secondary education, poor tertiary roads, and the list goes on. These realities make the journey to development a voyage by sailboat rather than aeroplane.

Seven per cent growth required

Recently, the Planning Institute of Jamaica was given the job to fashion a national development plan to transport the country to high-income status by 2030. According to Dr. Wesley Hughes, the top man at the institute, this will require the economy to grow at an average annual rate of around seven per cent. Dr. Hughes was sanguine about this prospect, pointing out that it was achieved in the early 1960s.

However, given the nature of the economy, conventional tools of macroeconomic management cannot conceivably produce economic growth of seven per cent on a consistent basis over the long term. The sheer weight of the public debt, coupled with its sensitivity to interest rate and an exchange-rate movement, allow little scope to manoeuvre. As such, whatever the outcome of the general election, any responsible government must follow the path of fiscal discipline and focus on macroeconomic stability.

In other words, regardless of how strong the temptation might be to significantly expand government spending, it must be avoided. The repercussions would be disastrous. Therefore, focus must be centred on bringing down interest rates, holding back inflation, avoiding exchange-rate volatility and keeping the budget deficit at a minimum.

No more dramatic policy reversals

The International Monetary Fund, in its 2007 Consultation Report, emphasised the importance of the role of confidence and suggests that "a 30 per cent weakening of the currency" could result in the dramatic increase of the public debt to 170 per cent of GDP. It is, therefore, quite clear that fiscal and monetary consolidation is not optional, if at least a modest degree of growth is to be maintained. The days of dramatic policy reversals are over with changes in political administrations. Outside of that, the economy will be condemned like that tragic figure from Greek mythology, Sisyphus, who must repeat forever, the back-breaking task of pushing a rock to the top of the mountain only to see it roll down again.

But in light of the fact that the familiar tools of macroeconomic management can only produce growth rates of two to three per cent, how can the economy achieve seven per cent? How will the country move from its lower-middle income position to developed world status in the next quarter century?

A part of the answer, Mr. Reid will tell you, rests in creating an environment in which entrepreneurship can flourish. For a long time, serious entrepreneurship in Jamaica was linked to a set of families and a few adventurous outsiders. And to make matters worse, the outsiders often displayed a tendency to think small and put limits on business expansion. But times are changing.

The world is suddenly much smaller, information is much more accessible and there is now a new generation of entrepreneurs who are educated, energetic, aggressive, street smart and technologically savvy. These are the people with the greatest potential of ensuring that the voyage to 2030 is not in a sailboat but a plane. This is where the possibility of seven per cent growth exists.

Nation of hustlers

In the 2006 Global Entrepreneurship Monitor, Jamaica is ranked fourth among 42 countries for early-stage entrepreneurial activities. The report estimates that one in five persons in the adult population is actively planning or has recently established a business. And this is not surprising, for we are a nation of hustlers. However, what is necessary is the development of strategies by the Government to convert this potential into something meaningful. It may be argued that the reason why tax revenue is so low and the formal economy is smaller than what it should be, is the inability of the authorities to embrace the complex and dynamic energy that abounds in our people and covert it into GDP.

It is in this context the YEA is advocating that the Government integrate entrepreneurship in its development planning. They also contend that greater strategic direction should be given to current programmes, such as the J$1.1 billion National Investment Fund loans for microbusinesses. And indeed, the fund should be structured in a way that it optimises economic growth along lines that are measurable. In addition, the association believes that entrepreneurship should be an integral part of the education system and more recognition given to its role in economic development. But, can the Government capture this vision and, more importantly, act on it. Or will it wait until it hears the sound of a rushing, mighty wind?

Cedric Wilson is an economics consultant who specialises in market regulations. Send your comments to: conoswil@hotmail.com.