Not me and this Budget

Dr Farrell made the declaration during an interview following yesterday’s release of the Global Competitiveness Report 2016-2017 at the Mt Hope campus of the Arthur Lok Jack Graduate School of Business. The report, which ranks 138 countries in the world and is produced each year by the World Economic Forum, showed this country dropped five places from last year, to rank 94th in Global Competitiveness.

Dr Farrell said he was neither disappointed nor surprised by the fall in this country’s ranking and noted that there was no gasp of surprise from the audience when the result was announced.

He said that based on the criteria used by the compilers of the report, the decline in this country’s ranking was entirely to be expected.

“The issue always remains what do you do about it and to my mind (it) is not a very actionable report because it is really firms that compete, the government provides an enabling environment, the institutions and the policies and so forth and the presumption is that if you get those right the firms are going to be able to compete effectively and you will become globally competitive.” He said while that logic was sound he had a problem when people talk about the “institutions” not working because that is a way of “depersonalising” the problem because the institutions are people and when people say the institutions are not working they really mean that the people are not working.

According to Dr Farrell there are people who are failing to recognise that the institutions they head are not working. He hit out at people who, he said, remain in charge of such institutions, knowing that they are ineffective and just stay in their positions collecting their salaries.

“Nobody in this country will say ‘I have had enough, I am going to resign.’ “ He said that instead of criticising businesspeople who are engaging in activities which are consuming the country’s foreign exchange instead of generating it, Government needs to put in place a range of disincentives to such activities and incentivise behaviour it wants. He said in terms of achieving economic diversification, “you need to have an incentive structure that disincentivises certain behaviour - like the fuel subsidy for example, remove the fuel subsidy - but at the same time when you remove the fuel subsidy you have to put plenty, plenty, buses on the road and put those buses on routes that would enable the average citizen, wherever they are, especially a female single parent who is working shift, to be able to get home reliably and safely at ten o’clock in the night.” Reminded that he is the advisor to Government on economic development, Dr Farrell said the Economic Development Advisory Board advises Government on various things.

“They can either hear us or not hear us. They can either take us on or not take us on.” He said the board was working hard on a number of things and had quite an extensive work programme.

“We are giving government the advice we think we should give them on various things and we wait to see what is going to happen.” Dr Farrell said while he was not yet at “that point”, if after a certain amount of time passes and he concludes that neither he nor the Board is having an impact, or little impact or an inadequate level of impact in terms of the direction of policy or policy implementation, “I will resign.” He said the board provides advisory notes to the government and has given the government advice on macro-economic management, “we have also given various notes on various aspects of diversification, so we have put certain things to the government, it is for the government to take these things or not take them.” Dr Farrell said Minister of Finance Colm Imbert will present a Budget tomorrow and will say all kinds of things. But, if people look behind the budget at what money is being spent on, they will see what Government’s real priorities are.

He challenged an incentive structure which he said, pays the Director of Public Prosecutions (DPP) who is responsible for jailing people for committing white collar and other crimes, a salary of $30,000 a month while junior lawyers who haven’t spent as much as three years in law school, can be hired to work on a Commission of Inquiry and get paid millions.

“Now what kind of incentive structure is that? What kind of message are we sending to the people who work in the DPP’s office,” Dr Farrell asked.