Why blame the IMF?
There is no doubt that the position of public-sector workers has deteriorated since their wages were frozen in 2009 under the JLP government, since renewed by the PNP until the present. While wages have remained constant, inflation has eroded purchasing power, and devaluation of the Jamaican dollar has led to substantial price increases of imported items.
Over the last three years alone, accumulated inflation was around 30 per cent, while the Jamaican dollar has devalued from about J$88 to US$1 to about J$116 to US$1. To put it bluntly, the wage freeze has impoverished public-sector workers. In fact, it has impoverished almost all of us.
Who is to blame for this? Should the public-sector unions have agreed to a wage freeze without concrete and enforceable safeguards? Governments, over the last six years, promised the workers they would do everything they could to control inflation and to stabilise the economy.
Unions should have written a trigger into workers' wage-freeze agreement: Once inflation topped 10 per cent, or the dollar devalued by 10 per cent, the freeze should have ended, and predetermined wage increases should have been automatically implemented.
So, in my opinion, public-sector workers and their unions are partly to blame for their predicament because they failed to protect themselves when they agreed to the wage freeze.
The Government's offer to their workers of a 5 per cent increase over two years is an insult, and they should apologise to their staff for offering it. In January this year, Bank of Jamaica Governor Brian Wynter announced that in 2014, inflation ended at 6.4 per cent, compared to 9.5 per cent for the previous year. He projected that for 2015, inflation would rise between 3 per cent-5 per cent.
That means that, even taking the lowest figure (and we know how reliable BOJ predictions have been over the years), if public-sector workers accept the Government's offer of a 5 per cent increase over two years, inflation alone will "nyam out" their increase, and they will be left worse off. When devaluation is taken into account, government workers will be even more deeply impoverished. Clearly, the Government takes their workers for fools!
Language is important. In the current negotiations, are public-sector workers asking for a pay increase? Or are they asking for their real wages to be kept stable at 2015 levels? Or are they asking for wages to be brought back to where they were in 2009 when the wage freeze began? It seems to me that public-sector workers have accepted their impoverishment and are about to agree to being shafted - again!
Both the Government and the Opposition are painting the International Monetary Fund (IMF) as the villain of the piece. The reason the workers cannot be offered more, they argue, is because the targets agreed with the IMF will be exceeded. "Renegotiate!" is the cry. The IMF has forced upon us "the most draconian conditionalities in the world!" "Dem a wicked!"
I don't know why the IMF is so silent in the face of all this abuse. It was not the IMF that made Jamaica the seventh most indebted country in the world (in terms of debt to GDP)!
Since Independence, every government has bequeathed to its successor a larger debt than it inherited. We like to blame the PNP government of the 1970s - and they were fiscally irresponsible; but the Seaga government of the 1980s that replaced it grew the debt tremendously.
The succeeding PNP government (with its world-class finance minister) almost doubled the external debt between 1989 and 2007 (from US$2.7 billion to US$5.1 billion). In four years, the JLP increased it to US$6.3 billion.
Neither the PNP nor the JLP seems to understand the meaning of sustainability. How could they - consistently for 50 years after Independence - think they could finance the annual budget deficit by borrowing and not expect the debt to reach unmanageable proportions someday? Outsiders looking in saw the deep hole the PNP and the JLP have dug us into, and no one wanted to lend us any more money. They could see - if we couldn't - that we were in crisis!
The IMF is not to blamed for the tight fiscal straits we find ourselves in; they are trying to prevent us from crashing. It is the PNP and the JLP that are to blame, and the blind who continue to support them.
What is a crying shame is that the financial blows do not fall upon those who are the cause of our financial problems. How can we make them pay us the reparations that are due for hijacking our Independence?
- Peter Espeut is a sociologist. Email feedback to firstname.lastname@example.org.