WITH the general election now clearly in the country’s rear-view mirror, a collective effort must now be made to grow the economy and improve the lives of all Jamaicans. For decades the Jamaican economy has exhibited anaemic growth.

According to the World Economic Outlook published by the IMF last year, Jamaica will have the seventh slowest growth rate in the world up to 2015. Over the last 30 years, annual gross domestic product growth in Jamaica has been less than one per cent. Therefore the first item on any new administration’s agenda should be how it intends to stimulate growth.

After the global financial crisis of 2008, the Jamaican government was able to successfully implement the Jamaica Debt Exchange (JDX). This was deemed a technical default but gave Jamaica a reprieve of sorts from the high interest payments on its stock of debt which today stands at J$1.6 trillion. Crowded out of the international capital markets and turning to the multilateral agencies as a source of cheaper funding, the country signed a Stand-by Agreement with the IMF for US$1.27 billion over a 27-month period. This means that the country will have to comply with this arrangement until it is concluded in May 2012. In effect this means that the new government will have to move quickly to implement both tax and pension reforms.

The new prime minister Portia Simpson Miller has a resounding mandate from the people and must articulate to all Jamaicans just how her government intends to create jobs, grow the economy and ensure better governance.

This has to become a reality if the Vision 2030 National Development Plan, of making “ Jamaica the place of choice to live, work, raise families and do business,” is to be realised. Her minister of finance Dr Peter Phillips will also have to exercise prudent stewardship of the economy if the country is to emerge out of its current malaise. This will entail reducing the fiscal deficit, encouraging greater levels of Foreign Direct Investment (FDI), balancing the budget and creating a conducive macro economic environment.

Reducing the public sector

The more daunting prospect is the rationalisation of the public sector. Under the IMF agreement, Jamaica is committed to dropping its public-sector wage bill from 11.5 per cent of Gross Domestic Product (GDP) to 9 per cent of GDP by March 2016. The outgoing administration had promised the public sector a wage increase of 7 per cent but to date has not clearly outlined how it will fund this. What is inevitable is that there will be job losses. The question facing the new government is how best to mitigate this without incurring social disruption and mass dissent as witnessed in Greece earlier this year.

The last government was elected after promising jobs, jobs, jobs. That did not materialise due in part to the global recession; instead 90,000 jobs were lost over a four-year period. The new government will now have to focus upon getting the country back to work and therefore spurring greater productivity.

The Labour Force Survey of 2009 reveals that in October 2008, the labour force stood at 1,302,400. Of this number 942,400 had no training. The government must make every effort to train the Jamaican workforce for the 21 st century. This means that a portion of the budget must be set aside for this endeavour.

Cheaper sources of energy

The country’s oil bill at around US$2 billion accounts for over 35 per cent of the country’s total imports, thus skewing the balance of payments. Alternative sources of energy must now be seriously explored. It cannot be sustainable when the country’s total GDP stands at US$14 billion, yet it pays US$2 billion for oil. A cogent energy policy must now become a reality in which indigenous sources are used to defray costs. The high price of electricity has been to the detriment of residents and businesses alike. The current tariff is between US$0.32 cents to US$0.39 cents per kilowatt hour, one of the highest rates in this hemisphere. That will now have to be addressed.

Tackling JDIP

The Jamaica Development Infrastructure Programme (JDIP) which sees the Chinese government lending Jamaica some US$400 million to undergo the most far-reaching infrastructural work programme ever seen has been somewhat derailed by mismanagement and dubious practices. It must now be properly monitored and, if needs be, an independent assessor brought in to ensure that good governance and adherence to standard operating practices takes place. This programme is too important to be derailed. It is a source for jobs and the results may well stand for half a century. Also, if well executed, JDIP may well lead to other heavy construction players investing in Jamaica which in turn could lead to jobs. Many of the world’s leading economies have grown their way to prosperity through infrastructural programmes.

Cutting the red tape

The World Bank’s Ease of Doing Business Report lists Jamaica as 85th out of 183 countries. The CEO of GraceKennedy Don Wehby is challenging a future government to improve that from 85 to 50 in two years. The new government must now move quickly to reduce the stifling red tape that hampers citizens and businesses and makes a trip to the tax office an onerous ordeal. The new government must now work assiduously to meet that target and ensure that projects can be approved within 90 days in order to facilitate big projects and small and medium enterprises.

Agreeing terms with the IMF

It is patently clear that the IMF agreement is at an impasse. The country has failed to submit itself for successive tests since December 2010. What now has to be established after the present arrangement comes to an end in May of this year is whether the country will enter a new Stand-by Agreement, opt for a Staff Monitored Programme or choose an Extended Fund Facility.

There are those who contend that Jamaica has managed to get by without the IMF’s aid vis-a-vis its balance of payments support, so does Jamaica really need to be beholden to the IMF? It is a question that needs elucidation.

The last government presided over low interest rates, a stable currency, low inflation and more than adequate reserves, thus underpinning the economy and preparing it for growth. Though it has not received much credit for this and some might say the Mannatt, JDIP and US plane over Tivoli affairs sullied this good work, the last government has left a legacy to build upon as the country goes forward.

Chairman of the PNP’s transition committee, Dr. Omar Davies, has made it clear that addressing the IMF on the country’s current position has to be made the top priority. Speaking on the matter, Dr Davies said: “ We don’t know at all what’s the true state of affairs. We have lived in a fairy-tale land and since April we have no idea as to what is the situation with the IMF. We have no information in terms of the level of arrears; these are all issues which will impact on just assessing what can be done when you hit that track.”