For the past few years, a lot of time, attention and money have been spent on crafting “Vision 20/30 for Jamaica, but it seems to me that it is “Reality 2013” and not “Vision 20/30” that is now paramount.
Not only will 2013 determine what 2030 might look like, but the current social, economic and political realities could have profound ramifications well in advance of the 17-year span between now and then.
Among the pressing economic imperatives, both short and long term, is the country’s ability to achieve a palatable and viable agreement with the International Monetary Fund (IMF). Those negotiations and the inking of an agreement have serious implications for both current and long-term developmental plans.
Any way you cut it, a signed IMF agreement will mean severe contractions in the Jamaican economy. While nobody wants to use the term, “Structural Adjustment”, the current agreement will not be dissimilar to the structural adjustments the country was mandated to make during the period of the seventies and eighties.
Under Jamaica’s first IMF agreement over three decades ago, the country experienced unprecedented contractions that not only led to deeper levels of poverty, but to severe social dislocations. By the time the first IMF programme had come to an end, Jamaica, like every other borrowing country at the time, emerged poorer, and in our case much more dangerous.
The IMF dictate of reducing the role and size of central government, led to the creation of powerful self-governing enclaves controlled by an assortment of “strongmen” with ruthless methods and selfserving ambitions. Thirty-odd years later, Jamaica has not recovered from that level of organised crime with tentacles stretching across both domestic and international borders. The ‘Dudus’ Coke affair and the current lotto scam are examples of the reach and depth of Jamaica’s criminal networks with roots reaching further backwards.
In any case, all of us need to be reminded that the IMF agreement is not a panacea. In essence, it is merely a limited, stop-gap measure to support the country’s balance of payments obligations, and has little or nothing to do with Jamaica’s plans for increasing production. Like any banker, the IMF is concerned with those “tangible” areas of revenue accumulation (i.e. taxes and cuts in spending) that will guarantee repayment of the loan, and is not interested in unsure or “unmeasurable” ideas concerning Jamaica’s productive capacity. That is not to say that the IMF would be averse to the latter, but what the world lending body is primarily interested in is loan “payments” and not productive “possibilities.”
The anticipated cuts in public sector jobs will no doubt have serious effects across the society. With unemployment currently at about 12% and growing, a further deepening of the jobless rate will be economically deleterious. With little or no room to embellish the social welfare system and to introduce social safety nets, the impact on families and households is expected to be enormous.
The country will find itself in a classic “catch 22” — not having the wherewithal to boost production and maintain social order and stability, but needing the latter to guarantee future growth and production.
Outside of the IMF scenario, the other pressing issue is that of energy reform. In fact, the matter of reducing energy costs and the urgent need for energy diversification are perhaps the most important and urgent matters facing the country at the moment.
There is just no other way to put it. Unless Jamaica is able to reduce the cost of electricity from US41 cents per kilowatt hour to US15 cents or lower, the country will not be able to achieve the levels of productivity required to pull us out of the economic sinkhole and to put us on a path of sustainable development. The phrase, “It’s the economy, stupid” needs to be prefaced by another phrase; “It is energy, stupid”!
As far as the energy problem is concerned, the PNP administration is going to have to decide whose side it is on, and whether or not it is in the interest of the country to continue to maintain an exclusive monopoly arrangement with the light and power company, or to find negotiating room for a new and more nationally advantageous contract. The government’s current posture of vacillation and of double-speak and double standards just cannot suffice for a situation that signifies life or death for the Jamaican economy. We the people must insist on a new arrangement that is “best” for us and our country.
My sense is that if there was ever a year of reckoning, 2013 is it. The decisions that have to be made this year will not only have short and long-term ramifications for the country, but will require a type of honest, open and transformational leadership style that is currently in very short supply at every level. It is an ominous note on which to start the New Year, but those are the stark realties.
Nevertheless, my friends, I wish for you a Happy New Year!