Balancing the books while balancing people’s lives
Finance Minister Dr Peter Phillips has had a good 2014 - in fiscal consolidation terms. The most ardent naysayers cannot deny that under his leadership from the Ministry of Finance, Jamaica has passed six quarterly International Monetary Fund (IMF) tests under the four-year Extended Fund Facility (EFF) which he signed on our behalf in May 2013.
Since we are at yearend we should just note the other two top performing ministers, in many people's view. Ministers Ronnie Thwaites and Mark Golding get those slots. Minister Thwaites works hard at bettering our education results and appears committed to bring much more accountability to bear on teachers' in-classroom performance, and has taken a few blows - some unkindly, personal - in the process. Senator Golding did the heavy lifting on getting a slew of IMF deal-related legislation passed. We now watch and wait for implementation by his colleagues.
Dr Phillips followed the IMF playbook very carefully. Although our overall debt has increased under his watch, the ratio calculation that is most often used shows a reduction in our debt-to-GDP position. In other words, the IMF's objective of getting multilaterals repaid is being met even when meeting the 7.5 per cent primary surplus target is causing severe pain to individuals, and is pushing many businesses to the wall because they are finding it near impossible to meet their cash flow requirements to pay ordinary operating expenses and utility bills.
Dr Phillips will get many praises for his fiscal consolidation successes - some call it squeezing the poor - but he is going to have to search hard to get any for the much-needed economic growth since he took the financial helm of the country three years ago. His apparent belief that fixing the fiscal was and is mutually exclusive to using tools in his legislative, regulatory and even fiscal toolboxes to facilitate and foster vitally needed economic growth, causes him to lose serious marks on the growth ticket. Anaemic growth cannot and won't cut it; not against a 7.5 per cent primary surplus target burden.
Dr Phillips may be riding high in the eyes of many in the financial sector - who have a terribly strong need for this IMF programme to work to avoid a real 'haircut' - but ordinary people's estimation is in contradistinction to that held by many in the financial sector, and even in the broader business community. If Dr Phillips is riding high, our prime minister is having a very low year as we close out 2014 and move into 2015.
BALANCING PEOPLE'S LIVES
Prime Minister Portia Simpson Miller has voiced her mantra of "Balancing the books while balancing people's lives" since the first time she was prime minister. She has repeated that ambition and objective many times, including in her Budget speech on April 29, 2014. Well, in case she has not read or noticed, many people's lives - especially the poor - are very out of financial kilter these days. And Madam Prime Minister, the hurt and pain and shortage of cash is so pervasive that many who considered themselves middle class, and even financially secure a few years ago are now staring poverty and bankruptcy in the face.
These many, some guess the majority of, Jamaican lives are seriously out of financial balance. In the language you speak, Prime Minister, they have been and have become really "poor"! So, since it is clear the Prime Minister has given Dr Phillips a great deal of room - for all kinds of reasons - to "do his IMF thing", why do we hold her accountable for the financial and other government-driven or "allowed" imbalances in Jamaican people's lives?
First, because it is her repeated mantra. She owns it. She is expected to deliver on the "balancing people's lives" part. This is especially so when Peter Phillips follows the IMF playbook very diligently and throws people's lives out of financial kilter through taking so much money away from ordinary Jamaicans through taxes, reduced capital and other government spending, and late payment to government contractors and service providers.
TAKE CHARGE OF ECONOMIC GROWTH
Given that her finance minister's plate is full with managing the EFF arrangement with the IMF; he has to address other debt-management agenda items; he must focus on and deal with fiscal and especially revenue collection direction and results; and cover broad monetary policy with the Bank of Jamaica, among a plethora of other related issues, it is beholden on our prime minister to manage - or make arrangements to manage - the economic growth agenda outside of the finance ministry. In this, she has earned a rather poor grade during her three-year tenure.
One can expect a knee-jerk reaction of "unfair" from many of the prime minister's partisan supporters. Many whose lives are now out of balance and are in a direct opposite state of Prime Minister Simpson Miller's many optimistic campaign promises will view the assessment as fair and even too kind. Be that as it may. It has to be the prime minister's responsibility to set the growth agenda for her Government. After three years, there is no evidence of such an agenda; worse, many believe that the administration has no real understanding of what that agenda should be or how to craft one.
Because I do want that economic balance to be felt by many more Jamaicans in their daily lives, on this robust, not anaemic, economic growth issue of the Government, I hope I'm sincerely wrong. Then we can all have a more prosperous 2015.
• Aubyn Hill is the CEO of Corporate Strategies Limited and chairman of the Economic Advisory Council of the opposition leader.