The more things (don't) change...

Claude Robinson

Sunday, January 06, 2013

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Dear Reader,

Preparing for what Prime Minister Simpson Miller should say to us in a scheduled broadcast on the first anniversary of her swearing-in (January 6), I reread my New Year's column of January 3, 2010. It's being repeated in its entirety today, three years later, as a reminder that the more things change, the more they remain the same. Change the names and the dates, and the story is the same.

A new year is ordinarily a time for renewal and for resolve to do better; despite the daunting challenges, 2010 should be such a year.

As a nation, Jamaica faces tremendous hurdles: The economy is mired in recession and burdened by heavy taxation; Government is having a hard time paying its bills; murder in 2009 was at the level of the all-time record of 2005; our schools are failing far too many of our children; the public health sector is creaking under the weight of demand by citizens who cannot afford private care; and the list goes on.

As individuals, a majority of the Jamaican people will, in 2010, see declines in their living standards. Beginning this week, they will be under more pressure as the light bill goes up, as bus and taxi fare increases are added to the increased General Consumption Tax (GCT) on a wide range of goods and services, as more taxes kick in at the gas pump, and as businesses pass on their higher costs.

Grim as the picture is, however, it should not necessarily drive leaders or followers into despair and hopelessness. Equally, the social disorder that The Economist Intelligence Unit predicts for many distressed countries like ours — though realistic — does not have to be inevitable.

"At the personal and family level, most Jamaicans will make adjustments in what they spend on food and transportation and basic necessities. However, for these sacrifices to make sense and be endurable people must be convinced they are necessary; there is no alternative; there is an end in sight, and there is a better future.

For such a future to be anything more than wishful thinking there must be a new relationship between leaders and followers — a relationship based on trust, respect, equity and a recognition by all stakeholders in Jamaican society that business as usual will simply not get the job done.

At the highest rung of the political ladder, Prime Minister Bruce Golding has to display the kind of steady and consistent leadership that was lacking in 2009.

Among other things, this means re-establishing a lot of the credibility that has been lost over the past year.

"At the political level the prime minister has not done nearly enough to create distance between organised crime and garrison politics. The delay over responding to the US request for extradition of West Kingston strongman Christopher 'Dudus' Coke remains a blot on his copy book.

Audley Shaw, minister of finance and planning, has hurt the Administration's credibility by presenting a string of budgets and tax packages which have consistently been proven wrong by events. The prime minister must seriously consider how long he can continue to remain loyal to a finance minister who has lost the confidence of some critical stakeholders.

Also, Mr Golding dithered on the resumption of a borrowing relationship with the International Monetary Fund (IMF) even after it was clear that there was no alternative. As a result, the target date for an agreement was pushed back several times causing further economic decline and, inevitably, stiffer terms and conditions.

Even at year-end an agreement was still not in place, and the ultimate price that the Jamaican people will have to pay for the promised US$1.2 billion remained shrouded in secrecy. The only thing we knew for sure was that taxpayers have been hit with $21.8 billion in new taxes starting January 1. We also knew that the tax hike is a prior condition for any deal with the IMF.

In effect, the Government must first demonstrate willingness and a political capacity to impose the additional taxes before getting even a sniff of IMF money and the other multilateral financial support that the deal is expected to trigger.

Given the widening gap between Government revenues and expenditures, I understand the need for the Government to put its financial house in order, even if this involves painful measures. But several important matters arise, including the distribution of the burden, the Government's approach to stakeholders and the gains that can be expected after the pain.

Take the matter of the prime minister announcing a two-year wage freeze without consulting the public sector unions with which the Government supposedly has a memorandum of understanding. As a result of this unilateral action, trade union leaders are now saying that the mood among the workers they represent is similar to 1984-85 when Edward Seaga, then prime minister, fired some 20,000 civil servants as part of IMF 'conditionalities', triggering a general strike.

Given the razor-thin margin that the ruling Jamaica Labour Party (JLP) has in the House of Representatives and declining popularity at the polls, Mr Golding does not have the political strength to take on a general strike. More important though, that kind of workplace disruption would only hurt an economy which is likely to contract further when the new taxes work their way through the economy.

Accordingly, what is required now is neither macho confrontation nor my-way-or-the-highway leadership. Consultation designed to find real answers, and not just window dressing, should not be confused with weak leadership.

Hence, the much promised social partnership talks among Government, Opposition, trade unions and business leadership must be made to work. And while Mr Golding must lead the process, it is important that all parties come to the process with open minds and a willingness to listen and share ideas.

This is not a call for coalition government or an end to vigorous political debate or tough media scrutiny of policy options or administration actions. These are essential elements of a democracy which, arguably, are needed more in times of crisis.

Nor is it a suggestion that people will magically subvert their personal interest at the behest of some presumed national interest. The 'Butch Stewart Initiative', recalled by this newspaper in recent days, rescued the dollar from speculators — at least for sometime — in the 1990s. More important, it showed the value of leadership in times of crisis.

Today's debate requires a rational understanding of what got us in this mess and what it will take to get us out. The high levels of indebtedness, crippling interest rates and lacklustre economic growth are not new. What would be new is a national approach to fixing something that has not been adequately addressed for far too long.

Mr Golding has promised that early in January the Government will allow a full parliamentary debate on the IMF agreement, the economic parameters and projections that underpin the deal. In that debate we need full and complete information so we can make informed judgments. Truth cannot be a casualty of the crisis.

The new year may not promise much by way of prosperity; but it is an opportunity for all of us in the Jamaican family to envision a better future and help each other along the way towards realising it.




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