Planning for growth

The UN’s Economic Commission for Latin America and the Caribbean (ECLAC) was in the news, which is a bit of an anomaly recently. Its executive secretary, Alicia Bárcena was in Cuba, highlighting the role of planning in the region’s development at a seminar to reflect on 50 years since the first economic plan in Cuba. There were representatives from several other Latin American states, primarily from those that would be called ‘leftist’, but sadly none from the Caribbean.
It was reported that the executive secretary emphasised: “Planning is an essential instrument for coordinating, implementing, and monitoring the structural change strategy proposed by ECLAC to make progress towards development with equality in Latin America and the Caribbean.” This, of course, has been one of the guiding principles of ECLAC but it is a sign of the times that the notion of ‘planning for growth’ has been jettisoned by members of Caricom.
Last July, in Chile, ECLAC’s Deputy Secretary Antonio Prado had indicated that planning for development in the region is back with “renewed strength and complex challenges”. But he must have had the Latin American members of ECLAC in mind rather than the Caribbean. Gone were the glory days when the founding guiding light of ECLAC, the towering Raul Prebisch had influenced a generation of Caribbean economists with his ‘dependency theory’. Basically what he emphasised was that the structural relations between the developed and undeveloped nations were loaded against the latter in such a way that if they continued with the status quo, they would remain in a perpetual state of ‘underdevelopment’. He advocated a radical break with those relations and new South- South ones to be formed. The region, under the philosophy adopted by ECLAC, advocated import- substitution regimes towards the generation of economic self- sufficiency.
The economic policies adopted by the PNC of Guyana, and initially supported by the PPP in the 1970s, were a variant of the overall strategy. As Prado pointed out, the most successful period for Latin America and the Caribbean, from the economic development perspective, was from 1945 to 1980, when industrialisation took place, as the region showed a Gross Domestic Product (GDP) annual growth of 5.5 per cent.
But with the collapse of the model in the eighties, when debt piled up to unsustainable levels, the IMF introduced the neo- liberal Washington Consensus doctrine of ‘stabilisation, privatisation and liberalisation’ before the region could secure debt relief. Ironically, the IMF had supported the old strategy, since it offered an avenue for the banks of the developed economies to intermediate the new oil wealth generated by OPEC. The region’s debt had literally been foisted on them.
The conditionalities of the Washington Consensus, into which Caribbean nations such as Jamaica and Guyana had been inducted, essentially threw out ‘the baby with the bathwater’ when they insisted that the previous practice of governments working on five- year development plans be abandoned. The market was supposed to replace planning: the invisible hand would address all challenges.
But as Prado reminded the region last year, we cannot get away from the fact that, “the state must be capable of providing strategic management for the long run, looking ahead, and being involved in the design of strategies for guiding national development.” After being strangled by the conditionalities of the Washington Consensus, by the end of the eighties, Latin America had thrown off its shackles and returned to a more interventionist state. And they have prospered through economic planning.
With Jamaica, Barbados and other countries in the Caribbean again being strangled by high debt burdens, it is time for them to go beyond the IMF’s old nostrums and adopt, from the example of Latin America, the benefits of economic planning. Even Guyana, which has been generating growth figures of five per cent recently should clamber aboard. The future of our countries is too important to be left to the vagaries of the market.