USING the divestment of the local airline and sugar industries, the implementation of the Jamaica Debt Exchange and the reduction in crime as his yardsticks, outgoing head of the European Union delegation Marco Mazzocchi Alemanni has given Jamaica a fair grade in taking steps to harness its runaway debt.

But the ambassador, who was last Monday bestowed with an honorary Order of Distinction (Commander Class) at King’s House, maintains that there is much left to be done, not least of which are tax reform and mending fences with the International Monetary Fund (IMF).

Anxious to highlight the successes achieved during his four-year tour of duty, and to debunk what he calls “incorrect ideas”, Alemanni sat with the Observer in an exit interview inside his spacious Olivier Road office in Manor Park, Kingston last Friday.

It’s not true, he said, that the EU and other international funding agencies want to see jobs slashed.

“There are other hurdles including the issue of the public service wage bill. There, again, there are a lot of incorrect ideas that are being floated like, ‘the international partners want to have a lot of people laid off’. That’s not true, that’s not true,” he stressed.

“We’re just saying that ways and means must be found to decrease the wage bill and certainly, insofar as the EU is concerned, that a serious policy of attrition be put in place.”

Government and the IMF signed a standby loan agreement in 2009, in which the parties agreed to freeze public sector wages over a period of time and to implement measures to shrink the ballooning size of the public sector. But bowing to pressure from several public sector groups earlier this year, the Jamaica Labour Party administration agreed to pay out retroactive monies and outstanding increases, threatening the IMF arrangement.

Alemanni, who demits office early next month, stopped short of saying he disagreed with the payout, but insisted that it has effectively burst the budget wide open.

“That is a past story, so let’s not delve into that, but it is a fact that that has made the budget skid. That’s a fact,” he said.

“I think a formula must be found so that you don’t have massive wage increases that make the entire budget get off track. We know, of course, that there are agreements, there are memoranda, there are rules, there are laws, but those same agreements and laws, we also have them in Europe and many of us in many European countries have taken cuts in our salaries because there is a crisis and I could not think that Jamaicans, who I know are very patriotic, would not be ready… No one is asking for wage cuts, but in terms of wage raises, to moderate them,” said Alemanni.

There is much at stake, he said, making a point of the large sums either granted or loaned to the country. Over the course of the past four years, the EU alone has given $43 billion in grants.

“Everyone has made sacrifices already for this programme. We have given a considerable amount of funding with budget support, the IMF has given funding, other international partners have given funding… Let us not forget that a significant segment of Jamaicans have also made big sacrifices. The people who took that big pay cut (under) JDX, investors most of them, they’ve already made sacrifices… We have all made sacrifices, but Jamaica is still in the middle of the river and if we do not get to the other embankment, we may be swept away and all the sacrifices that everyone has made will go down this river,” cautioned the ambassador.

He hailed the JDX as a “tremendous success”, but said it was only a first step, a prerequisite for the implementation of the other reforms that are planned under the programme with the IMF. Alemanni made it clear, however, that “a great deal of the reforms envisaged in the IMF agreement were already envisaged in your agreement with the EU, which was signed one-and a-half years before the IMF agreement”.

Reiterating that the EU’s priority is to help Jamaica rid itself of “crushing debt” and “crushing crime”, Alemanni said that although the divestment of Air Jamaica was “psychologically painful”, it was the right thing to do. The sugar divestment, he said, was also the right thing to do, and he lauded Dr Christopher Tufton, who was then minister of agriculture, as “someone I respect greatly”.

“We are glad that like sugar, it’s not anymore on the budget. However, personally, I am saddened by the fact that overall the Caribbean doesn’t have a truly regional airline and we all have to go through Miami to move around and Miami is getting a lot of revenue that really should belong to the Caribbean countries,” he said.

Another success he highlighted was the passing of legislation governing financial transparency, out of which the House committee on financial management was formed. It was among the stipulations laid out by the IMF and the EU as conditions of aid.

But though much has been done, Alemanni said the agencies are anxious for tax reform to be decided on and implemented speedily.

“There’s been talk about tax reform for many, many years, at least since the green paper that was issued in 2003 and it’s not been implemented yet. And when we talk about tax reform it does not mean tax increase, not at all. It could even mean tax decrease. The fact of the matter is that most people who should pay taxes do not. There should be around 250,000 Jamaicans who should pay income tax. Out of this only 5,000 do so. If everyone who should pay tax did pay tax, those who pay now would have to pay less,” he said, adding that there were a lot of other distortions in the tax system, including the issuing of waivers.

Alemanni will retire to his hometown of Rome where he will concentrate on running his chain of boutique hotels in Morocco. He will be succeeded by a female Italian whose name he declined to disclose.

He took up his post in the island in 2007, after years in various African countries. The 33-year veteran diplomat said he and his wife Fiela decided to come to Jamaica because they had never before been in this part of the world. The experience, he said, was professionally intense — given the global economic crisis and related incidents — and personally pleasant.

“We knew it was a beautiful country and we have certainly not been disappointed. What we didn’t know was that the people were so hospitable and warm and friendly and feisty, as people call me,” he said laughing heartily.

“Some people say that’s why I got that honorary award,” he joked.

In the interview, in which Alemanni also waxed philosophical, the ambassador saluted Jamaica for being proud of its heritage, for its vibrant democracy which he said featured a stable government, free and fair elections, a free press, and an independent judiciary.

Quite unlike his first experience with “the Black world” in Los Angeles in the mid-1960s, Alemanni said Jamaicans have a deep and enduring pride and that Jamaicans are more tolerant of each other than Europeans have been over the years.