We need a collective will to save Jamaica
The charge by the IMF that the JLP was tardy in taking advantage of the Jamaican Debt Exchange (JDX) must be placed in perspective. So too must the criticism by the PNP administration that they must now fix what was broken by the JLP, suggesting financial mismanagement of the economy by that administration. It is our penchant in Jamaica to get into political banter about almost everything and to assign blame where none necessarily exists.
The PNP’s criticism of where the JLP left the economy rang hollow, given its own performance at the wicket. Disingenuously, they left out two important variables that are worthy of note. One is the terrible overhang left by its own mismanagement of the economy which the former administration inherited at the start of a global recession. The other is the global fallout in the economy, an exogenous shock for which the economy was ill prepared, and one which, admittedly, caught the then government flat-footed.
When placed in proper perspective, the JLP administration failed to assess the impact of the global recession on Jamaica carefully and prudently. The general impression was conveyed that we might not have been too badly affected by it. The government was in office almost a year before the full brunt of the recession started to be felt in 2008. Yet, there was some dithering until it became palpably clear that an agreement had to be entered into with the IMF. This was the right thing to do given the fallout in the bauxite sector and other areas of the economy, and the urgency for the country to have balance of payments viability in the face of the crisis.
The agreement was reached and Jamaica started to get drawdowns from the IMF until the country hit a snag for almost 18 months into the change of administrations. There may be enough here for the present government or any other body to criticise. But Dr Phillips should by now be finding out, especially with respect to the Fund’s insistence on a rationalisation of the country’s pension scheme for public sector workers – that the road is not as smooth as it might have appeared.
One can be sure that he has begun to discover that the IMF has not changed significantly in its modus operandi; that it is still committed to a rigid orthodoxy that will force more pain on the backs of the Jamaican people than are now being felt. If I were him, I would go easy on any criticism of the previous government when it comes to the IMF. He may well find in his dealing with the organisation reasons not to be too ironic about how they feel about Jamaica. Furthermore, it is still axiomatic that the same knife that “stick sheep, stick goat”.
One cannot forget how chummy members of the IMF team were with Mr Shaw, especially in the first three quarters after the agreement was signed. All kinds of nice-sounding accolades were trumpeted from various platforms and in serial signings of loans from the multilateral organisations which the fund agreement unleashed.
To hear them now criticise him for squandering the gains of the JDX is rank hypocrisy for they highly commended the government on this event when it occurred. And it is a matter still worthy of high commendation. For the first time in at least two decades we are experiencing single-digit interest rates. The exchange created the environment in which the divestment of certain government assets could proceed such as Air Jamaica and the sugar company. It created a feeling in the country that we could now begin the elusive growth towards prosperity.
A more appropriate criticism that can be levelled at the former minister of finance and his government is that having secured this great achievement there was no aggressive move to address the country’s burgeoning debt crisis. Indeed, the agreement seemed to have been interpreted as a fillip to expanding the debt, so much so that in a four-year period the national debt moved from around $980 billion to over $1.6 trillion. There is no clear indication that this expansion of the debt resulted in a net gain for Jamaica. The fact that most of this debt was achieved at record low interest rates is no reason for self-congratulation.
Even if they were interest free, what is painfully clear is that they have to be repaid and they certainly have added to the stock of debt relative to the country’s GDP.
The bottom line is that there is enough blame to go around. The politicians need to understand that the people are tired of the point-scoring and the penchant to assign blame for known or perceived misdoings. They are not convinced that JLP politicians are any cleaner or less corrupt than PNP politicians. They want to see the country settle down and begin to do the work that the moment calls for. The country is convinced that neither political party has what it takes to build a viable and prosperous Jamaica, irrespective of how much they will want to trumpet their superior intelligence from political platforms.
We may not be able to have a political coalition, but may we at least strive to come to some consensus on how we may manage our economic affairs through the storm we are passing through? And if you look at what is happening in Europe, and the banality of the US Congress, there are stronger headwinds to face in the future. Can we see Portia Simpson Miller, Andrew Holness, Audley Shaw, Peter Phillips and members of civil society sitting down with a resolve to fix the Jamaican economy? Can we set aside partisan rhetoric, casting of the blame net and recognise that we are in the midst of a storm, and that nothing but our collective wills and competence can see us through this. There is no need for the political chairs to be rearranged, but the economic chairs can be, and must be if Jamaica is to be saved economically. We have not yet reached the perfect storm, but we will if we continue on the present trajectory. Who will bell the cat?
stead6655@aol.com
