Former LSE Student Picks Stable, Low Inflation to Raise Output and Productivity

Joe Issa, a former Student of the London School of Economics and Political Science (LSE), where he founded his first charity to assist underprivileged Jamaican children, has said in an interview, that stable, low inflation best suit small island states like Jamaica with less resilience to economic shocks, stating it is the preferred choice for raising output and productivity.

Joey Issa

“You don’t want to go back to the period in our history when inflation was very high and consumers were getting much less for their money, year over year, especially in the absence of a rigid prices and incomes policy that fully maintains purchasing power as inflation rises,” says Issa who, while studying at LSE, famously established the “Educate the Children Fund”, which raised £3,000 to buy books for underprivileged Jamaican children.

Noting that the high 26-per cent inflation recorded by Jamaica in 2008, may be considered to be moderate, especially for countries coming from three-digit inflation figures, Issa says “double digit inflation it too high for us.”

“The ideal for us is low inflation; and when bench marked with the wider world it translates to single digit inflation, which we have been posting in recent times. I am pleased it has been hitting lower lows more recently,” says Issa in the interview.

He was commenting on a Jamaica Observer article which reported that inflation had reached a low of 1.7 per cent at the end of December last year, and that it was the lowest in more than 45 years.

It also said that “the inflation rate in Jamaica has averaged 9.79 per cent from 2002 until 2016, reaching an all-time high of 26.49 per cent in August 2008 and a record low of 1.60 per cent in November 2016.”

In commending the progress of the government in keeping inflation on a downward trajectory, Issa says more Jamaicans will fare better, particularly since most of the weighting in the consumer price index is given to food and drinks on which low income earners tend to spend most of their income.

Acknowledging that different levels of inflations have different effects, Issa cites three scenarios for any country; Jamaica included.

“At very high levels, inflation is bad for us as the majority of the population come under pressure to buy the goods and services they were once able to acquire; at the same time, businesses cut output and send workers home.

“However, at low and stable levels of inflation the opposite occurs. Producers tend to increase their workforce so that they can increase production, which could lead to better wages for workers,” Issa says.

He adds, “Inflation rate below zero, or deflation as it is called, is also not good for any economy as it keeps prices low, which can reduce job opportunities and put more load on consumers.

“But, with low and stable inflation, as we have now, we can expect production and productivity to rise and create job opportunities.”

Businessman Joe Issa Touts Policy Targeting Education and Productivity

Businessman and philanthropist Joe Issa who is known to spend millions of dollars a year on the education of Jamaican children is touting government policy geared towards improving education and productivity.

Joseph John Issa

“The focus on improving education and productivity is a good move as it will enable labour market reform and workforce productivity; these, along with greater value added and better worker compensation, constitute the main ingredients for high growth,” says Issa, adding that “there must be above-normal growth in order for the general living standard of citizens to significantly improve.

A former student of the London School of Economics (LSE) in the United Kingdom where he founded his first charity – Educate the Children Fund – Issa was speaking against the background of the increased need for the education system to generate skills and professions that are demanded by the market, something which Minister of Education, Youth and Information Hon Ruel Reid has been pushing.

Most importantly, Issa cites as critical, labour market reform in order to drive output and productivity as well as increase participation by more Jamaicans in the development process, which he says won’t happen until workers are educated and trained.

Pointing to the importance of labour market reform Issa says “it is critical that we change the market for workers to make it more flexible and efficient, thereby enabling employers to adjust the timing, level and deployment of its workforce to suit their needs,” stating “without it we will lose much needed foreign direct investments.”

In lauding the policy measures, which focus on improving and expanding vocational training, targeting skills and professions that are in high demand and reforming the labour market, Issa says the actions will ensure that the average man on the street participates in adding value at the highest level possible and benefits from economic growth.

In this regard Issa says he likes the new thrust by the ministry of labour and social security to become an economic ministry, “a greater force and stimulant for growth and development,” said the minister, Hon. Shahine Robinson in her contribution to the sectoral debate, acknowledging “the need to enhance labour management and administration.”

ALL FOR EDUCATION

Photo caption: ALL FOR EDUCATION: State Minister of Education Burchell Whiteman (left) looks on as Joe Issa, Jr., (2^nd left) presents Happy Grove High School board chairman, Rev. Frank Davis with some of the supplies bought by Caribbean students at the London School of Economics for schools in depressed areas. Others from the left are Lauriston Lindsay, principal of the school and Fitz Taylor, assistant chief education officer.