The impending IMF agreement with the government has resulted in further taxation of the Jamaican people. This was inevitable if an agreement is to be reached with that body.

With all the thinking that the IMF is a kinder and gentler institution, we must not be misled to believe that this institution has fundamentally changed its modus operandi. It is a banker of last resort and as such will insist that those countries to which they lend money will be able to repay these loans over prescribed periods.

With all the pretensions to the contrary, Jamaica is in no position to drive any hard bargains with the IMF. The unpalatable truth is that we stand before them as beggars and they see us as no less. This is the posture we have demonstrated to them and the international financial community over the years. If the IMF concludes that you have to fire 20,000 people from the public sector and increase taxation on an already overburdened population, this is what has to be done.

Before we pour scorn on the IMF as we did in the 1980s, let us be mindful that the IMF coming to our shores now is just a symptom of the greater malaise that bedevils Jamaica. They can share no blame for the predicament that we are in. The blame is fully ours. We are where we are because of poor political leadership over the years. We have taken a country which should be a jewel in the Caribbean and have degraded it to the point where we are not far from being described as a failed state or a pariah nation. Blessed with great national resources, we have bent these resources to fit the demand of a tribal politics. The net result of this is that more and more of the nation’s resources have been concentrated in the hands of a few loyalists, depending on which party is in power at any given time. Instead of honouring and paying homage to the traditional resilience of the Jamaican people, our leaders in both the private and public sectors have only exploited that resilience for their own corporate or political good.

The IMF bears a fiduciary responsibility for international taxpayers’ funds over which it presides. The negotiations are taking long precisely because the lead IMF negotiators are not resiling from the hard choices that the government has to make. When the IMF conditionalities are fully announced to us we are going to be shocked. They will be harsh, given our already harsh economic environment, but frankly, the government hardly has any choice in the matter.

The prime minister’s interview with journalist Ian Boyne gave a tepid indication of what is to come. Understandably, the prime minister was short on specifics, except to announce that a tax package is coming. This is hardly news to the Jamaican populace. The only question is how harsh it will be and how evenly spread across the various sectors of the economy. I agree with financial analyst Anne Shirley that the government needs to look to the banks as part of their taxation strategy in the future. No sector has grown more profitably than the banking sector since the global economic crisis broke. Indeed, the two leading banks, NCB and Scotiabank, have seen their net profit increase; some would say almost embarrassingly so in the present economic climate.

It is not that bankers are brighter than anyone else. This may be a simplistic assessment, but they only have to be adept at moving money around. They are typically risk-averse and so will engage in investments that involve very little risk with the excuse that they are preserving shareholder value or that they are being judicious in their fiduciary responsibility to customers.

The Wall Street bankers that earned the ire of President Obama are a case in point. Here are bankers that had to be bailed out because they were too big to fail. As soon as they were stabilised at the taxpayers’ expense, they returned to their old habits of paying themselves big bonuses. They will not take the risk to lend especially to small businesses many of which are being starved of capital and are being driven into the ground.

The behaviour demonstrated by these banks is not untypical of Jamaican banks and other leading financial houses. They have fed over the years on the teat of handsome returns from Government of Jamaica securities. They have become spoilt and so do not have to beat the road, go to factories or farms in search of loans. There is absent a sense of competition among them, except how much deposit they can take in to be stashed away on government paper or to be lent for consumer loans. If the government is considering taxing the people at this point those who have benefited most from the generosity of the Jamaican people must be called upon to show some gratitude for that generosity. Banks and financial houses must be at the top of that list.

Minister of Industry, Investment and Commerce Mr Karl Samuda has been lamenting that the Jamaican entrepreneur has lost the appetite for risk. It is not that they have lost the appetite, Mr Samuda. They have become more astute in the way they borrow money. A great deal of mistrust has been built up in the system of which the financial collapse of the 1990s was just one pillar. Imposing more burdens on them will certainly not increase their appetite either. The government will have to convince them and the Jamaican people that they are truly important stakeholders in any plan to get the country back on its feet. Doling out one or two billion dollars at whatever interest rate will not alone suffice. We need a comprehensive plan, a vision if you will, around which people can unite. We have only heard so far that the choices will be hard and painful which, again, is hardly news. We are yet to hear what the concrete plans are to end the pain. Over to you, Mr Golding.

stead6655@aol.com