Editorial

Revealing the bitter medicine no one wants to take

Wednesday, February 01, 2012    

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Nobody knows the troubles I've seen

— from the famous American Negro spiritual

THIS would be a suitable opening statement for the press conference following the coming Cabinet retreat (unfortunate wording for a planning meeting). The People's National Party (PNP) may now be sobering up after their victory in the December 29 general election as the full effect of the current state of affairs hits them.

Things are much worse than one can imagine while in Opposition, and Drs Peter Phillips and Omar Davies, in particular, will be gnashing their teeth as more and more they take stock of their portfolios and find the proverbial cupboard empty. The medicine that the Jamaica Labour Party (JLP) warned about on the campaign trail is about to be revealed.

Dr Davies will find that what money has not already been spent has been committed by contract, and these either cannot be repudiated or would be costly to extricate from or re-negotiate. The new minister will find that there is little "gas" to put in the "JEEP" while being struck with a massive bill for the importation of buses. There are claims that both incompetence and corruption are involved. If there is corruption, this issue cannot remain as a political football with allegations being exchanged. It must be definitively settled on the basis of facts.

Dr Phillips finds himself with a massive budget deficit and a crushing level of debt; the servicing of which deprives of any capacity to stimulate the economy. The JLP administration presided over a broken International Monetary Fund (IMF) agreement.

After unprecedented support from the international financial institutions over the last three years, Jamaica has a much larger debt portfolio and only two quarters of economic growth of one per cent.

The new minister and Government will be forced to raise tax revenue, reduce expenditure and reconfigure a supplementary budget and a full budget by May. A new arrangement will have to be negotiated with the IMF by resolving all the very difficult issues relating to public sector wage bill and the size of the public sector, as well as wrap up the tax reform which started when the PNP was in office four years ago.

Dr Phillips will have to bear the "slings and arrows of outrageous fortune", namely what was termed as the misdeeds of his predecessor. He has to reassure the international financial institutions that they must continue their support and provide the bond rating agencies with plausible reasons not to further downgrade Jamaica's credit rating.

After the revelations of the sorrows the Government has seen, all Jamaicans will know. But the American Negro spiritual goes on to say that those who sing this refrain will survive and pass over this tribulation. So too can the Jamaican people.

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