Discipline needs to follow good start

Sunday, August 25, 2013

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The history of Jamaica's long and troubled relationship with the International Monetary Fund (IMF) reveals that no government has completed the implementation of an IMF programme meeting all the targets and performance criteria. The history also shows that successive governments of Jamaica always pass the first set of targets.

The IMF has announced that Jamaica has met the first set of targets or, according to the new euphoric political spin, the GOJ as "over-performed". This is the only positive in a report with dismal news about lack of growth and persistent high unemployment.

The problem is that Jamaica has never sustained the full course of the programme and this is usually blamed on some adverse exogenous event or the medicine being too harsh. The implosion of the IMF programme is usually followed by the resort to a general election in which the Government that balked at swallowing the medicine is booted out of office.

This was the case with the Michael Manley-led PNP Government in 1980 and the Andrew Holness-led JLP Government in 2011. The real cause, however, is the absence of discipline to ensure the implementation of the IMF programme for the entirety of its designed duration.

We will never know if IMF programmes work in Jamaica because we have never stuck to the full course of any programme. Every medical doctor admonishes their patient to take the prescribed medication on the designed schedule for the full duration of the treatment. Jamaica, like most patients, stops taking the medication as soon we feel better. That, however, does not mean that the patient is cured.

This time around, Jamaica's supervising physician is Dr Peter Phillips, a man of proven political courage and undoubted cerebral capacity.

If there is to be economic recovery and sustained good economic growth Jamaica has to complete the full course of medication and then practice a healthy regime of expenditure restraint and careful fiscal management.

The Government, we submit, would be wise to heed the advice of world-famous Jamaican economist Professor Peter Blair Henry, dean of the Stern School of Business at New York University.

Professor Henry in his new book Turnaround: Third World Lessons for First World Growth (2013) states: "Although there is not one single path to prosperity, one thing leaps out of the evidence -- discipline."

He defines discipline as "a sustained commitment to a pragmatic growth strategy, executed with a combination of temperance, vigilance and flexibility".

By temperance he means that "Discipline does not call for crash diets or binge eating, but rather for healthy habits practised consistently over a lifetime".

He warns, as well, that "Good economic policy requires not so much bravado to implement drastic change as the strength and wisdom to make reasonable trade-offs over the many years it takes to transform a country's standard of living."

Professor Henry advises, too, that: "Discipline in this context means self-control and a sustained commitment to the future, resisting the temptation to adopt policies that tilt entirely in one direction or another, opting instead for the vigilant pursuit of a pragmatic middle of the road prosperity."

Sound and valuable advice indeed.




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