The global financial world is understandably concerned about the crisis in the Greek economy and its implications for the stability of the economies in the Eurozone and elsewhere. Jitters in that economy have affected global stock markets, especially in the United States, an indication of how interdependent the world economy has become. Italy is teetering on the brink of collapse heightening the possibilities of a return of the fierce recession in Europe which some analysts claim never really ended.

As we look at the crisis in Greece, we cannot fail to see the similarities to the travails that persist in Jamaica. Indeed, it is a tale of two countries that have failed persistently to take the hard decisions to put their respective economies on a sound footing by taking the unpalatable medicine necessary to do so. For years the Greeks engaged in a spending spree which saw public sector wages practically doubling. Tax evasion was also at an all-time high and the black market economy grew to an estimated 30 per cent of the country’s GDP. Very generous pension schemes and retirement packages to workers in the public sector were the norm.

By the time the recession hit Europe in 2009 great fissures had already appeared in the economy. These fissures have since widened to the extent that the country now finds itself in a financial storm of horrendous proportions that bankruptcy is now the watchword. The country has been forced to go the Eurozone and the International Monetary Fund for financial support. The rescue deal has proved very painful for the Greek population. In the midst of a recession, the Greek Parliament has embarked on painful austerity programmes to bring back some semblance of fiscal sanity to the country. Public sector wages have been frozen or cut back. The generous pension arrangements have been drastically revised with the intention being to raise the retirement age. Needless to say, Greek citizens have strongly resisted these measures with demonstrations in the streets of Athens and elsewhere.

The glaring similarities between what is unfolding in Greece and what we see here in Jamaica are startling. In fact, in Jamaica we are looking in a Greek mirror. Apart from our economies being small, one of the most striking characteristics between them is the high unsustainable debt load that both are carrying. This has been largely due to the fact that both countries for years have sought to live beyond their means. The lifestyles that citizens of both countries have sought to live bear no resemblance to the economic realities that could sustain such lifestyle. In Jamaica, successive governments have sought to buttress this lifestyle by borrowing excessively, instead of taking the politically untenable route of frugality and austerity in the midst of scarce and limited resources. We have sought to maintain a bloated public sector and have merely given lip service to public sector rationalisation which in many instances is a mere euphemism for “jobs for the boys”. We have a wage bill that is unsustainable against the background of our horrendous debt levels and the fiscal deficits that we have. Yet, our trade unions are clamouring for higher wages for public sector workers and for the maintenance of pension schemes which, at this time at least, is beyond government’s ability to accommodate. Watch for the fight that will ensue over pension reform in the public sector. The Jamaica Teachers’ Association has already fired the first volley.

All of this boils down to one common denominator: a lack of credibility in political leadership and governance. The weakness of the Papandreou government in light of the grave economic crisis has been displayed to the world. Much will be on the shoulders of the new interim prime minister, Lucas Papademos.

Here in Jamaica we are also faced with a crisis of governance. In the midst of sensitive and some would say perilous, discussions with the IMF, we lost our former prime minister seemingly to a scandal which could have been avoided with more adroit political leadership. We have a young prime minister who is just learning the ropes and picking his way through the politically tribal maze that is Jamaica. General elections to determine political leadership of the country will soon be announced.

The essence of all of this is that, like Greece, we are in a grave crisis in Jamaica. Like Greece, we will need bold political leadership to help us navigate out of the mess in which we find ourselves. Whichever party forms the government of the day will have to demonstrate the bold leadership that proper rationalisation of the public sector requires. Government must be transparent and level with the country as to what is the country’s true status with regard to the IMF agreement. I countenance early elections for this reason: that the country will know where we are with this body and what medicines the country will have to take to be healed. I am not politically foolish to believe that this medicine and true position will be known in the midst of an election campaign for a new government. We have not yet reached the maturity or the political sophistication to make this so. But civil society must hold the next government’s feet to the fire. We must not settle for anything else but to be told the truth, the whole truth and nothing but the truth.

stead6655@aol.com

www.drraulston.com