Wed | May 24, 2017

The Gavel: Why the crime spike? - It's the economy, stupid!

Published:Monday | July 20, 2015 | 7:00 AM
Minister of National Security Peter Bunting.
Barack Obama
1
2

National Security Minister Peter Bunting is trying hard to make himself a corruption of his middle name, Murcott. The minister, despite his public-relation strategy of Unite for Change, made a calculated attack on his main opponent, Derrick Smith, and then had to eat his words.

While it may be true that the Opposition has been counting bodies; and while it is true that Smith was fired after seven months in the job; and while it is also true that Smith is the longest-serving shadow minister, Bunting's 'John Crow' comments cannot unite for change.

We are glad he apologised, because he can afford no distractions at this point.

Murders are going up under his watch, and there appears to be no clear strategy on the part of the police to cauterise them. Let me say, though, that this is not just a police problem.

This is a social problem which cannot be solved with policing strategies alone.

Take, for example, the issue of lottery scamming, which is widely believed to be the main driver behind most murders in western Jamaica. Despite the risk of being imprisoned for up to 25 years - although the judges seem unwilling to go beyond five years - people are still participating in the practice. Not only is scamming seen as lucrative, but it is able to afford participants a lifestyle they cannot afford in the structured economy.

But no minister of government can say they didn't see this spike in murders coming. In fact, they should be surprised there are not more reports of frauds, break-ins and thefts.

The very letter of intent Jamaica supplied to the International Monetary Fund (IMF) in March 2013 indicated that with a sustained fiscal effort required, the risks of policy slippage are high and that the 7.5 primary surplus target (the highest in the world) may lead to a situation we are now seeing.

"With a three-decade history of adjustment without visible and lasting progress, a high degree of social and political consensus will be needed to sustain fiscal adjustment over the medium to long term," the letter said.

"Implementation of structural reforms, including the requisite legislation, is essential to an enduring fiscal effort, highlighting the risk from delays in or partial implementation of required reforms. Even as the country commits to changing course, potential limitations arising from capacity constraints or the social and political cost of the timely implementation of these reforms should not be underestimated."

IMF AND THAT LETTER

We see where five members of the United States Congress have written to President Barack Obama, asking him to urge the IMF to revisit the terms of its agreement with Jamaica to avert potential social and economic ills.

The Democratic lawmakers argue, in their letter dated July 14, that Jamaica's enormous debt burden of about 140 per cent of gross domestic product (GDP) and the extreme fiscal austerity measures have proven counterproductive.

Under the IMF programme, Jamaica is expected to maintain a high degree of austerity, with a required primary surplus of 7.5 per cent of GDP, the highest average primary surplus in the world outside of major oil producers.

But the five Congress members are now asking Obama to urge the international financial institutions to revisit the terms of the IMF programme to provide the Jamaican Government the fiscal space it desperately needs.

They say Jamaica's recovery continues to stall because of declining employment and growth rates, mixed with a poverty rate that has doubled since 2007.

letter to Obama

The letter to Obama was signed by Congresswoman Maxine Waters (the second most senior member of the US House Financial Services Committee, which has jurisdiction over US participation in the IMF and the World Bank), Yvette Clarke, Sheila Jackson Lee, Gregory Meeks, and Charles Rangel.

These are some of the same people, if not all, who played crucial roles in Washington to help Jamaica secure the IMF loan in May 2013.

During her 2015-2016 Budget Debate contribution, Prime Minister Portia Simpson Miller placed on record in this Parliament "thanks to my dear sister and friend, the distinguished United States Congresswoman Maxine Waters" for help in getting the agreement.

"I also wish to thank Congresswoman Yvette Clarke, daughter of Jamaica-born former New York City Council Member, Una Clarke. I express the appreciation of the Government and people of Jamaica to the members of the US Congressional Black Caucus, who spoke up on behalf of Jamaica. There can be no doubt that having signed off on the Economic Reform Programme, which is a central tenet of Jamaica's agreement with the IMF, Jamaica is in a better position today than it was three years ago," Simpson Miller said.

Let us recall that last June, Christine Lagarde, the managing director of IMF, revealed that Capitol Hill, the seat of political power in America, nudged her to sign off on a programme for Jamaica.

"I remember the 24th of December, 2012, the day before Christmas. We had been told about Jamaica. We have been told how difficult the situation was, and I was in close contact with (Finance) Minister (Dr Peter) Phillips. But little did I know that there would be international pressure coming from the Hill. I actually welcomed that day, 24th December. A group of Congress women and one man who came unannounced sat in my office and said to me, 'You have got to help Jamaica'," said Lagarde.

Her statement was confirmation of whispers that Jamaica had reached out to Washington to help it secure an agreement with the IMF.

One hopes that Dr Peter Phillips, who is in Addis Ababa, will be back in time for tomorrow's last sitting, and will give a definitive statement on whether Jamaica endorses the actions of the people from the Hill.

In his absence, Prime Minister Simpson Miller, who has taken a back seat to this matter, should give the statement.

extra resource

Bunting could do with the extra resource to buy petrol for police vehicles so as to enable them to be more responsive. The gang violence we are seeing and the resultant murders may just be a direct result of the move to take the profits out of crime, especially in a starved economy.

I am not, however, convinced that the IMF will be prepared to lower the primary surplus target, bearing in mind how it got so high in the beginning (coming from 3.6 per cent in 2010), and also due to the fact that Jamaica missed the nominal target that was set for the last fiscal year and had to be given a waiver. An adjustment would raise serious questions about the credibility of the programme, as well as the Government's commitment to pay down its high debt.

It is such a pity that Parliament is not more involved in reviewing the economic-reform programme. This is something that the Economy and Production Committee should concern itself with in the next session of Parliament.

Parliamentarians will be proceeding on their summer vacation at the end of this week, leaving behind a host of unfinished business.

- Email feedback to thegavel@gleanerjm.com