Thu, 18 Jan 2018 03:00:08 -0500
IMF admits it is growth impotentFriday, November 10, 2017
From the article in the Jamaica Observer recently 'IMF gives Jamaica top marks' the implausibility of the International Monetary Fund (IMF) route out of debt becomes apparent yet again.
Currently the public sector wage bill and debt financing take up about two-thirds of the Government's spending envelope, leaving only one-third for all other areas, including education, health and infrastructure indicated IMF boss Uma Ramakrishnan. But aren't the salaries in health, education, works agency, etc, not part of the public sector wage bill? Cutting the wage bill (including in these sectors) will only see us end up spending the money in the same sectors? The real agenda is to cut the wage bill to meet primary surplus targets, making sure our creditors in the voracious financial sector do not continue to suck us dry.
Transformation of the wage bill will initially lead to some redundancies, continues Ramakrishnan. Yes, lots of questionable jobs in the business process outsourcing and tourism sectors. They are insecure, part-time, low-waged, without benefits types of jobs.
And why can't the public sector be part of the engine of growth (except for the rather large problem of corruption)? What about resurrecting the Public Works Department, instead of wasting time and money on a corrupt and ineffective system of private contracts? We could also work on really getting into agro-parks and making agriculture more stable and sustainable. in pursuit of growth? Let's spend some of the National Housing Trust money on job-creation, instead of using it to pay even more to those creditors.
Agriculture almost entirely determines Jamaica's variation in economic growth; there are two graphs in the Planning Institute of Jamaica's April-June Economic Update and Outlook (available free online) that are the image of each other. Other sectors are hardly contributing, because of the low pay perhaps? So where is the push for big-time agriculture, probably Government-led? Privatising sugar hasn't achieved much so far.
The IMF is subjecting Jamaica, and many other countries, to an unproductive austerity regime. In its own words there is indication that the fund is still at a loss as to why Jamaica's economic growth is so low. The IMF has no idea how to help — if that really was its agenda. What more needs to be said.
Campaign for Social & Economic Justice
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