Editorial

If Dr Peter Phillips fails...

Thursday, September 13, 2012    

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THE Finance Minister Dr Peter Phillips went to lengths on Tuesday to assure Jamaicans and the international financial markets that Jamaica was on track to secure a hard-fought pact with the International Monterary Fund (IMF).

While the assurance was critical, it was virtually extracted, like a bad tooth, out of the mouth of the finance minister by the Opposition and other commentators who suggested that the negotiations with the Washington-based Fund were in trouble.

We are very displeased with how the issue of a new pact with the IMF has been and is being treated. This is nothing more than a political football for some and the need to score points seems to be more important than the state of the economy.

What should not be missed is the absolute gravity of the situation. Without the vaunted seal of approval of the Bretton Woods institution, 'dawg nyam wi supper'.

As Dr Phillips pointed out, the absence of an agreement with the Fund has blocked access to other critical international lending agencies such as the Inter-American Development Bank; the World Bank and the European Union.

As is well known, the private lending agencies, taking their cue from this, will offer only high interest rates for loans which turn out to be further punishment for an ailing economy.

If for no other reason, we need to coalesce around this need to secure an IMF agreement, in order to shore up our dismal balance of payments situation.

In this respect, Dr Phillips must constantly bear in mind the nervousness of the Jamaican investor and the jittery international financial markets to determine at what intervals he should provide information on the progress of the talks.

We don't believe that he should negotiate in public. This would be very unwise. However, it is in the absence of light that men of darkness prevail.

Our advice to Dr Phillips, though unsolicited, is that he treat the Jamaican people as shareholders in a company which is negotiating a loan to save the business. There are confidential aspects that can't be publicised in the interest of that very company. But the shareholders must be kept informed as much as possible, to prevent fear and rumours taking the place of facts and truth.

At the same time, all Jamaicans have a vested interest in helping to stabilise our country by working with the Administration to arrive at that point where the Fund and the Government can sign a pact that is feasible and beneficial to us, even if there will be some pain.

This is not the time to emulate the approach of the Republicans in the United States who ensured that a political gridlock deprived millions of Americans of sorely needed jobs.

In any event, we are not anywhere near an election. But we are still in a stubborn economic recession, whether it be so deemed or not.

The task facing Dr Peter Phillips in these IMF talks are onerous, to say the least. We shudder to contemplate what failure would mean.

This is an option he does not have.

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