A nation in a pickle
ONE of the assumptions of an IMF agreement with Jamaica is that the door will be open to further borrowings from multilateral institutions. The ability to do so may sound like a victory for some politicians but the real tragedy is that every cent borrowed adds to our already unsustainable debt load. Succeeding governments have treated their ability to borrow money with a sense of triumphalism; they pat themselves on the back when they have been able to conclude a loan successfully and pillory their opponents for their apparent inability to do so.
It is perhaps because we knew that we were going to be a net borrowing nation that we made sure to enshrine debt repayment as a requirement in our constitution. We have since 1962 developed an insatiable appetite for debt, the psychology of which is not much different from the chronic credit-card user who cannot see himself living without a credit card even when he does not need one. In fact, he may go into a major grief process if he should be relieved of that card. No government has been bold enough to turn its face against further borrowings and to tell the people the unpalatable truth that we cannot go on living off the sweat and hard work of other people. If politicians say this from a political platform, it is mere political sophistry because they know that once they ascend to power it will be business as usual.
The JLP in Opposition was very strident in its criticism of the PNP administration for increasing our debt stock. Since they got into power, what has changed? Our debt stock has grown exponentially and we are now looking to borrow US$1.3 billion from the Fund. Because we are constitutionally obliged to repay our debts, this means that the amount of money available to carry out the basic duties of any decent government becomes less and less. Social unrest is therefore primed to happen. It might be that we cannot escape from the IMF this time around, but has anybody in the government stopped to ask how we got to where we are with them? If the country was convinced of the unpalatable truth of where the economy truly is, are there not alternatives that could have been explored to avert further borrowings? It is clear to me that the level of national soul-searching that is necessary to confront the demons in our social, political and economic life as a nation is not being done. If we do not do the soul-searching and come up with the right answers, we will continue to tinker at the edges of our national life and continue to beg our way to prosperity.
The chickens have certainly come home to roost. Even local lenders are not prepared to lend the government of Jamaica any more funds. I suspect that lower interest rates on GOJ securities are not the real issue. The issue is one of credibility and trust and this is in direct correlation to our unsustainable debt burden. The people are beginning to sense that the government is in a real pickle and will increasingly be unable to repay their debt. They are looking at the macroeconomic picture and they are not happy with what they are seeing. The deal with the Fund will only assuage their anxiety but they know that the problems are far deeper than any IMF loan can solve.
We are a nation in a pickle and we must all face this reality. What must the government do? First, it must level with the people. I do not know why governments should have anything to fear from being open and transparent with the people. Doing town hall meetings, live broadcasts from Jamaica House and other fora are good in themselves, but they mask the kind of openness that we would want to see in a government. The cap on delicate discussions is quite understood, but there can be no reason why there has to be this secrecy surrounding a lot of the transactions that government is doing on behalf of the people. The Air Jamaica and sugar industry divestment are two cases in point. The timely dissemination of information is critical and must not be overlooked. Take us into your confidence, Mr Prime Minister. You cannot ask public sector workers to take a wage freeze (as indeed they ought) for the next two years and you have not sat down with the chief stakeholders for dialogue.
Second, the Cabinet must be drastically trimmed. If this means the loss of some jobs, so be it. We are in a pickle and the sooner we get out the better. Every new ministry of government expands the already burgeoning and unsustainable civil service bureaucracy that we have in Jamaica. A number of ministries could be subsumed as departments under other ministries. The local government system needs to be revamped and replaced with three functional municipal authorities in the three regions or possibly four. We are over-governed and all that this does is to guarantee a job for politicians. The interests of the people are not being served.
Third, the government must come up with a set of workable strategies as to how it is going to grow the country from debt and the path of death to prosperity and wholeness for the Jamaican people. It is clear that they alone do not have all the ideas to do this. No government ever does. It is not enough to have an ability to borrow money, Mr Prime Minister. What do you do with money when you borrow it? You cannot ask people to bear the kinds of pain you are exacting on them without telling them what plans and policies your government will put in place to correct the problems and thus ease their pain. They elected you to govern and we hope that in this new year you will take the bull by the horns and do just that.
stead6655@aol.com