Wed | Aug 16, 2017

Aubyn Hill | IMF’s man of the year

Published:Friday | January 29, 2016 | 1:00 AM
Finance Minister Dr Peter Phillips, the Gleaner 2015 Man of the Year.

Since anyone reading this column has passed some or maybe a large number of exams, it is fair to say that most of us give some credit to Dr Peter Phillips for having led the drive to pass the 10 quarterly tests that were set by the International Monetary Fund (IMF).

Most will not be nearly as effusive as The Gleaner about the finance minister's achievements, and my credit is not so much about passing the 10 quarterly IMF tests. Peter Phillips cannot take credit for the crafting of an innovative and tough fiscal consolidation programme. I credit the IMF for the crafting, if not for any innovation.

Dr Phillips and his team simply followed the IMF's playbook. That playbook has been no plaything and, instead, has been a bruising burden on the backs and in the pockets of the poor, and whatever is left of a middle class in Jamaica. As in a number of my previous columns, I tot up positive marks to Minister Phillips for showing significant backbone in carrying that IMF austerity programme - called fiscal consolidation by the Government and the IMF to the Cabinet desks of his colleagues, who were essentially disbelievers and doubters and stayed far away from him and his IMF infection. His Prime Minister, Portia Simpson Miller, took a long time to even acknowledge that Dr Phillips had come to an agreement with the IMF on behalf of her Government and the people of Jamaica. Those warm days in the spring and summer of 2013 were chilly and lonely ones for Finance Minister Phillips.

No-growth albatross

As Peter Phillips takes The Gleaner's 2015 Man of the Year kudos for passing 10 IMF tests, he will have to accept the demerits for the no-growth or low-growth economy, over which he has presided for the past four years, as a very significant downward counter-balance to those exuberant praises.

He really believed that such a painful austerity programme would end up producing economic growth. Somehow, he bought the argument that the outrageously punishing 7.5 per cent primary surplus target - set exclusively high for Jamaica by the IMF and accepted by him - would produce growth.

All that has happened is that it has been relentlessly sucking out endless cash in many new taxes from the pockets of Jamaicans, and the overall economy, to pay down, in a relatively short time, a debt accumulated for about four decades. Passing the IMF tests have ensured that we cannot find the cash to buy basic medicine, equipment and supplies for our rundown hospitals. Nor can we pay science and mathematics teachers enough to keep them in the country. Many of our roads are in shambles and we cannot even afford to buy really needed equipment for our airport towers, to the point where our civil aviation staff have gone public to say they will not continue to use the terribly old and ineffective equipment they are given to try and land planes safely.

Passing the IMF tests has produced increased youth unemployment, no noticeable economic growth and a severe shortage of money to spend among the weakest and even among aspiring professionals in our society. But it has also produced a finance minister who is now acclaimed as the 'man of the year'.

This same Minister Phillips accepted an incredibly ornery recommendation to cut out the guts of the junior stock exchange - the only entity that has been responsible for funnelling much needed equity capital to small and cash-short companies - and which has been visibly responsible for some economic expansion and employment in an extremely weak economy.

This week, Dr Phillips seemed to have had a road-to-Damascus experience, which he hinted at in Parliament, and appears to be searching for a way to make an about-turn from his very bad decision on the junior stock exchange.

No doubt, this change of heart was prompted by the relentless criticism of the Opposition, and later from members of the business community, and even of his appointed Economic Programme Oversight Committee. That decision on the junior stock exchange by Minister Phillips is decidedly not man-of-the-year kind of stuff.

Colleague losers

Without malice, Dr Phillips had some colleague ministers who were really losers in 2015. Fading crown prince Phillip Paulwell comes readily to mind because most everything he has touched on energy, especially that 360-megawatt power station proposal, has gone bad - or certainly has not come to fruition. And then, of course, under his watch a most offensive and costly set of 'bad gas' was released on the nation. Dr Fenton Ferguson was hell bent on making sure Phillip Paulwell did not dominate the race to the top of the heap of ministerial losers.

As if chik-V was not enough to counter bad gas, the hapless dentist-minister presided over one of the saddest episodes in Jamaica's health-care administration - that of the 19-dead-babies scandal.

In any other administration that had the minutest modicum of ministerial accountability, the prime minister would have released Dr Ferguson from the Cabinet. Regrettably, Prime Minister Simpson Miller goes out of her away to find and make excuses to keep non-performing ministers and persons who hurt the very Jamaican citizens who elected her, and whom she took a solemn oath to serve and protect. We are still waiting and hoping that Minister Anthony Hylton will find a way to make the logistics hub a reality and produce the thousands of jobs he promised would result from this project. If he had done that and skipped the 'Crown and Anchor' bet and fiasco, he might have been considered for the 'man of the year' award.

Aubyn Hill is CEO of Corporate Strategies Ltd and chairman of the Economic Advisory Council of the leader of the opposition.

Email: writerhill@gmail.com

Twitter: @hillaubyn

Facebook: www.facebook.com/hillaubyn