Wriston, Walter B.
Tonight we welcome the Right Honorable Edward Seaga, Prime Minister of Jamaica. Prime Minister Seaga's election last fall was, according to some observers, one of the most important political developments in the Western Hemisphere in many years.
In choosing Mr. Seaga over his predecessor, Michael Manley, the people of Jamaica rejected a state controlled economy, which was labeled democratic socialism by some, or moderate Marxism by others. No matter which label you subscribe to, however, the fact remains that the previous government was moving rapidly toward a closed system with most industry run by the state. Mr. Seaga, by contrast, ran on a program that relies on the private sector to create wealth to benefit all Jamaicans.
What makes this victory so significant is that it came in an area of the world where the opposing ideology is widely thought to have a lock on the hearts and minds of the people. To be sure, Jamaica's problems did not begin with the Manley regime, but his policy of income redistribution did not succeed. In the eight years before last year's election, real income had declined by twenty-five percent. Inflation was running at a twenty-five percent annual rate. The people's answer was to choose Edward Seaga for his commitment to a private, market economy and for his competent management ability.
The early signs of revival are most encouraging. After years of double digit inflation, the first six months of the Seaga government showed inflation at an annualized rate of only 5.2 percent.
Bauxite and aluminum production were up, after several slack years.
Mr. Seaga has made a personal appeal to the people of Jamaica for their cooperation. He told them, "One by one I invite unions, investors, I invite all persons who have the nation's interest at heart to come in from the cold."
By the available evidence, this appeal has been effective, most notably in his dealings with the civil service unions, which have suffered particularly from high inflation.
Samuel Stewart, head of the Jamaica Civil Service Association responded, "We will ...endeavour to convince our membership at large that the Government is unable to accommodate our request. This sacrifice we are prepared to make in the national interest."
The Prime Minister is not alone in his belief in a market oriented approach to stable economic growth.
Carl Stone, columnist for the Jamaican newspaper, "The Daily Gleaner," seems to be in total sympathy with the Seaga program, and since he was the only journalist to call the last two elections accurately, it might pay to heed his words.
"There is an old saying," he wrote, "which warns us against wanting to reap what we have not sown. That saying is of great relevance to what is happening today on the labor relations scene.
"After eight years of continuous declines and reductions in workers' purchasing power (based on the fact that under the Manley government increases in the cost of living far exceeded the increase in wages) organised labor is now wanting to reap where it has not sown."
Stone goes on to say, "A country cannot afford living standards beyond the income that is earned from production, if those living standards are to increase, those increases can only come after production and incomes are increased. We cannot expect to reap where we have not sown."
Jamaica faces many problems.
The tourism industry is operating at only forty-five percent of capacity. The beaches, however, are too much for us cold climate dwellers to resist for very long so things are sure to improve.
More serious is the shortage of skilled workers and professionals, who must be replaced both by training new ones and by luring expatriates back from abroad.
Despite these problems, the future under Mr. Seaga appears bright. The IMF, the World Bank, and the Inter-American Development Bank have already extended Jamaica new credit. With the progress already made in completing Jamaica's commercial bank debt restructuring and the $70 million loan we will sign tomorrow, the foreign private sector, too, has expressed confidence in Jamaica's future.
Under the proper guidance, Jamaica can once again achieve the place it held for so long, the leadership of the English-speaking Caribbean. Every nation in the Caribbean and, indeed, all of Latin America, will be looking to see if the Seaga experiment can succeed, and, incidentally provide an alternative model to that other Caribbean island nation.
I give you the Right Honorable Edward Seaga.