In discussing the economic problems of the country with a taxi operator last Friday, he said that unlike the government he tries to live on his income and does not borrow to meet his living expenses because the loan has to be repaid. If he needs an extra item and does not have the money he would work hard to increase his income.

The views of the taxi operator capture in a simple manner the root cause of the

the country’s financial and economic problems. But there is a fundamental difference between the taxi operator’s position and that of the government. The government’s is far more complex in that it is responsible for, among other things, education, health and security and has to ensure that these services are properly maintained even if its means borrowing. Government expenditure was out of line with its income, and no government, perhaps with the possible exception of the Seaga administration in the 1980s, has had the guts to reduce expenditure sufficiently and lift production to an appreciable level to increase the income. One of Seaga’s tough measures was to lay off 30,000 public servants.

What seemed puzzling to my taxi operator friend was that government has borrowed so much money over the years without matching production to the extent that it now has to use 56 per cent of its revenue to repay debt and is still borrowing. He said that does not make sense.

The increased taxes which will yield more than $21 billion and the US$1.25 billion stand-by facility which the IMF is providing to strengthen the weak balance-of-payments position will help, but the massive debt burden will still strangle us. It seems like an exercise in futility to ask the institutions from which we borrowed to cancel or forgive our debts, or for us to default entirely which could lead to great difficulty in Jamaica securing loans in the future.

So we have to tap more into our own financial resources to correct the debt problem which is strangling the country. Pressed by the Fund, the government, with the support of financial institutions, has initiated a programme to deal with domestic debt which is higher than the external debt. Called the Jamaica Debt Exchange, it is integral to the Medium Term Economic Programme developed by Jamaica in partnership with the IMF. Since paying the debt has been stifling the country with 56 per cent of its taxes going towards debt payment, the Debt Exchange programme will involve the swapping of over $720 billion in domestic debt for lower-yielding bonds.

The programme is expected to yield savings of $46 billion on interest payment next fiscal year. This means creditors ranging from financial institutions to individuals are going to receive less interest on their investments. The hefty profits made by some financial institutions are going to fall. What is not known is how much creditors will lose in the exercise. There is confusion in financial circles both in Jamaica and overseas as to what is the status of the exercise. I prefer to call it debt restructuring with a minor default.

This is regarded by many financial analysts and investors as the last chance to put the economy in order. The IMF is demanding close monitoring of the arrangements. The financial sector has supported the initiative, but warned that the government must exercise strict financial discipline, unlike in the past. From time to time governments have introduced programmes which fall apart because of the lack of tight fiscal discipline. President of the Jamaica Bankers Association Minna Israel struck the right chord when she said she hoped that the initiative would be accompanied by tax reform and strong fiscal management to avoid a repetition of the past.

Help rebuild Haiti

When the bell tolls/ never say for whom it tolls/ It tolls for thee (common humanity)/ No man is an island.

About 50 years ago I read this passage in Ernest Hemmingway’s novel, For Whom The Bell Tolls. I remembered the passage last week as aid from many countries poured into Haiti, following an earthquake of devastating proportions which unleashed death and destruction, especially in the capital Port-au-Prince which was almost wiped out. The January 12 earthquake is one of mankind’s worst disasters.

At the time of writing on Sunday, the death toll was 60,000 and is expected to reach more than 100,000 when more bodies are taken from collapsed buildings. The problem was that Haiti, one of the poorest countries in the world, did not have heavy equipment to lift the fallen concrete off victims trapped under buildings. After four days people pinned by heavy concrete slabs were crying for help. They were hungry and injured. People everywhere were crying for food, water and shelter.

Jamaica responded quickly, sending a contingent from the Jamaica Defence Force and a team of doctors and nurses. Prime Minister Bruce Golding and Opposition Leader Portia Simpson visited the country. Financial aid was mobilised. Many organisations, including churches, collected funds. Jamaica and Haiti have a close relationship. Haitian dictators have fled to this island on their way elsewhere. Many Haitian students have studied here.

As an International Federation of Football Associations referee, I went to Haiti several times between 1966 and l980 to officiate in international matches and was always treated with respect. Haitians have always been passionate about Jamaicans. That is why I am appealing to my fellow countrymen to support Haiti in this time of need and suffering. Indeed, no man is an island.

Haitians throughout their history have displayed an indomitable spirit and will rise again out of the ruins. The disaster offers an opportunity for recovery and reconstruction and the creation of a new Haiti.