Principle held hostage to IMF orthodoxy
My parents were Norman Manley socialists. They strongly supported the PNP, a movement they thought was committed to the educational and economic uplift of the ordinary people of the country. They thought the opposite to be true of the JLP. They believed it represented the upper class, enabling the ordinary people to survive but not assisting them to rise. Were my parents to awaken from their graves today, they would be hard-pressed to see a distinction between the two parties.
While political parties throughout the world are occasionally forced by exigent circumstances to cross philosophical boundaries, their policies and actions have tended to remain largely consistent with their core philosophy. For
example, the liberal administrations of Tony Blair in the UK and Bill Clinton in the US adopted some conservative policies without losing their broad philosophical direction.
Rarely have we seen the radical departure of a political party from its basic philosophical position that we are currently witnessing with both the JLP and the PNP. The traditionally conservative JLP's wholesale adoption of the liberal ideas of free health care and education, both of which are being resisted by the supposedly liberal PNP, starkly demonstrates this. The PNP's conservative positions, together with its singular focus on meeting IMF benchmarks without regard for economic growth or the effect on the welfare of ordinary Jamaicans, now place it firmly to the JLP's philosophical right.
Even more extraordinary is the party's radical about-face on basic economic policies. Smarting from the stigma of economic incompetence that followed the debacle of the 1970s, the party, from as early as the 1990s, departed from its core principle of people-focused development and embraced a somewhat corrupted form of supply-side economics. The extent of the economic disaster it wrought is now a matter of record.
In an ironic reversal of economic direction intended to project its mastery of the capitalist system, the 1990s PNP administration abruptly replaced its 1970s philosophical commitment to advancing the ordinary people's interests with an economic model that represented what Minister Ronald Thwaites accurately described as "the greatest transfer of wealth from the poor to the rich since slavery".
And as if learning nothing from the tragic consequences of abandoning its core principles during its 181/2-year term in office, the PNP returned in 2011 with a set of economic policies even more deleterious to the interests of ordinary Jamaicans. For despite the importance of fiscal stability to economic health, policies that diminish economic opportunity for the people will have a painfully negative effect on their lives.
Cutting Government's expenditure coat to suit its cloth seems commonsensical. However, by the 2014-15 Budget, this strategy had cut 25% of the real value of Government's expenditure in just two years. This would have been economically beneficial if the cuts were to recurrent expenditure and the burdensome cost of the bloated governmental apparatus. Instead, it is critical government investment in the social and physical infrastructure required for economic growth that was slashed: by more than half in 2014-15
compared to 2012-13, when adjusted for inflation.
This enormous contraction in spending, amounting to more than 6% of GDP, has had such a dampening effect on economic activities that not only has it caused increased deprivation among ordinary people, but it has significantly affected the Government's ability to realise its expected tax revenues. The widespread public protests that would normally be triggered by such a decline in economic activities have been avoided so far by the pacifying effect of the prime minister, and by the JLP's failure to inspire the people.
But considerations of public order aside, government reneging on its obligation to invest in the economic infrastructure to enable economic growth constitutes a serious threat to economic stability and national development.
Lifting worker productivity to internationally competitive levels is central to the economy's ability to grow. And high worker productivity needs an infrastructure that facilitates the easy and inexpensive movement of people, materials and information, as well as the availability of appropriate health and education services. These are the areas of the economy most dependent on government investment. Yet this is where the cuts in government expenditure have taken place.
With Jamaica's slowing population growth rate resulting from heavy emigration (particularly by our most educated); and with an exceptionally large proportion of our population either unemployed or outside the workforce, the need for increased worker productivity is now greater than it has ever been. Productivity has been in decline for the last quarter-century, and the task of reversing the trend is now not only urgent, but colossal.
Unfortunately, the Govern-ment's economic programme has effectively sidelined these issues, which would typically be the focus of a liberal administration. The just-tabled estimates of revenue and expenditure showing a 55% increase in capital spending gave some expectation that the declining trend in social and physical infrastructure spending would end.
But this hope was dashed when the finance minister told us that the increase was essentially for debt repayment. Additionally, by substantially relying on increased revenues through a combination of new taxes and greater compliance, the administration continues to ignore the critical importance of reducing the gargantuan size of government and its recurrent expenditure.
The becalming effect of Portia Simpson Miller's presence at the head of Government is heartening. But it would be a tragic betrayal of the people's trust if the confidence they repose in her were to be used to lure them into accepting the Trojan horse of an IMF economic programme injurious to their interests.
Public-relations activities trumpeting the Government's achievements suggest it
continues to believe talk is a substitute for performance. But as much as some might view the Jamaican people as unlearned, they are very astute at distinguishing between action and empty words. In the long term, this administration's political fortunes would be better served by pressuring the IMF to incorporate growth strategies into its economic programme.
A return to the principles on which it was founded is the administration's best hope of convincing the Jamaican people that better can still come.
- Claude Clarke is a businessman and former minister of industry. Email feedback to firstname.lastname@example.org.