Gambling on casino is not a development strategy

Prime Minister Bruce Golding took a bold gamble this past week with his decision to license casino gambling. Indeed, even one of the staunchest Church critics acknowledged the move as an act of political confidence.

Speaking on the Nationwide current affairs programme, Impact (TVJ) Wednesday night, Rev Peter Garth remarked that the prime minister must be a very confident man as he would be fully aware of the position of the Church against casino gambling. He would also know that large numbers of voters are active Church members.

Rev Garth refused to respond directly to a question from programme host Cliff Hughes as to whether the prime minister would pay a political price for ending years of indecisiveness on casino gambling and giving formal approval to something which has been here in everything but name.

Mr Golding, it seems, is gambling on at least two things: The moral ambivalence of the society that bets on any and everything; and he’s betting that the economic benefits from casinos will outweigh the political risks.

The expectation is that billions of dollars should come in the form of foreign direct investment in new hotel rooms, and thousands of jobs will be created in both the construction and hospitality sectors. Some of this will translate into revenues for capital development in health, education and security.

Mr Golding announced some very impressive numbers in his Budget speech in Parliament Tuesday, his first in the role of prime minister.

In return for casino licences, Palmyra Hotel and Spa will construct 2,080 new hotel rooms at Rose Hall, St James at a cost of USD 1.8 billion.

The Tavistock Group will double the commitments made to the previous PNP administrations of P J Patterson and Portia Simpson Miller. They are now projecting some 8,500 rooms at the „stupendous“ Harmony Cove project in Trelawny.

As for political fallout, we may soon know if there’s any for Mr Golding and the JLP as the prospect of an early general election loomed larger this past week.

Speaking on the Breakfast Club Thursday morning, Karl Samuda, JLP general-secretary and minister of industry and commerce, said the JLP would enter into discussions with the PNP soon, „this week perhaps“, to try to resolve the constitutional issues arising from the verdict of the chief justice that Daryl Vaz cannot continue to hold his West Portland seat in Parliament.

The uncertainty now is whether the losing PNP candidate, Abe Dabdoub, will ask the Court of Appeal to award him the seat without the need for a by-election as the chief justice ruled.

Absent of an agreement with the PNP, there will be general elections as the prime minister made clear at his post-budget press conference.
Stripped to its essentials, Mr Golding is indicating in the clearest possible terms that he will call a general election if the appeal is filed. He’s not going to wait for that case, and possibly several others, to work their way slowly through the legal system. That would create too much instability.

Meanwhile, as the debate on morality versus economic imperatives continues, my own view is that casinos can be part of the mix that is offered to visitors.

My fundamental concern is that the expectation from the two huge casino hotel projects betrays an approach to development that may not yield the growth with development.

Furthermore, product diversity can be achieved in other ways, especially integrating tourism into our cultural and entertainment industries.

Low absorptive capacity

During the election campaign, Mr Golding said that „jobs, jobs, jobs“ would be at the centre the economic strategy. This was mentioned again Tuesday, but the speech lacked a clear strategy as to how this would happen.

Small business development was mentioned in passing, but there was no indication as to how the perennial difficulty in getting concessionary financing to this sector would be realised. The PNP also promised money for this group, but actual delivery was way below expectations.

In his speech, the prime minister noted, quite correctly, that the billions of dollars that the previous PNP Administration had been able to attract in foreign direct investment in tourism, infrastructure and other areas had not been matched by commensurate level of economic growth.

Why? „It illustrates a structural weakness in our economy – our lack of absorptive capacity, the failure of these investments to energise the economy and our inability to sustain their velocity,“ he said.

Absorptive capacity refers to the ability of an economy to absorb capital and use it in a productive way. The nature of the infrastructure plus the quality and supply of human skill, including managerial skill, are some of the factors that determine a country’s absorptive capacity.

Investments under the previous administration in port, road and telecommunications have begun to improve the infrastructure. On the other hand, weaknesses in our training and educational institutions continue to impact negatively on our skill levels, both technical and social.

But while the prime minister correctly pointed to our low absorptive capacity as a major factor in the anaemic growth rates recorded over the past decade or so, the speech did not offer any insight as to how this problem would be addressed. This is a pity.

I was looking to Mr Golding to provide some new thinking about improving our absorptive capacity so that we do not, years from now, lament that growth is not keeping pace with foreign investment.
The danger of continued over-reliance on the type of tourism we have been practising is that we will degrade the environment beyond its sustainable capacity and we will continue to create slums around pockets of affluence and opportunity.

The prime minister noted that we already have more than 700 squatter communities all over the island. He has to ensure that the spanking new enclaves being constructed for men and women who are prepared to sit at gambling tables until they go broke do not become magnets for more such communities.

Four years ago, when the debate on casinos was at fever pitch, the consultants engaged by the Government to make the case for casinos carried out a number of public opinion surveys to test public attitudes.

One study found that residents of Jamaica are „against casino gambling by a slight plurality, 42% to 38%“, although residents of the resort areas of Montego Bay and Ocho Rios are in support by three to two margins.

Those who are in support cite jobs, foreign exchange earnings, increased tourism and increased government revenues, while those who are against cite possibility of more crime, encouragement to gamble rather than work, religious reasons and fear of gangsters controlling the casinos.

„Perhaps not surprisingly, the strongest opponents of casinos are those who say they go to church regularly.“ They were against casinos by a margin of 59 per cent to 22 per cent. Attitudes may have changed over the years or, as Rev Garth said, Mr Golding is a supremely confident man.