Paul Ward | EPOC just a rubber stamp
The celebratory tone of Economic Programme Oversight Committee (EPOC) pronouncements is most inappropriate, and the most recent one presented by new co-chair, Keith Duncan, was no better.
EPOC appears to be nothing more than another arm of government and IMF propaganda, rather than a sober, scrutinising and sceptical committee representing various sectors of our economy and society.
The first point is that EPOC is not representative. Of the 11 members, five are bankers, there to make sure that, above all else, all debts are paid as number one priority (as per the 1962 Constitution bestowed on us by the British). Two are from the government and are naturally apologists for government policy. One from the private sector, one from the farmers and two trade unionists, one of whom has now for several years been a government apologist. So at least eight out of 11 are not there to be critical, so long as debt is being paid and the austerity policy remains in place. (NB: The Constitution could be modified, and not just to replace the Queen or Privy Council).
The search for real growth remains as elusive as ever, and every announcement does include this as a footnote. And elusive it is, despite the spin given in the latest figures, headlining 28 per cent growth in agriculture and 2.2 per cent overall. The PIOJ figures on which the latest EPOC celebration was based make very clear that the 28 per cent represents nothing more than a low figure one year ago and some fortunate good weather. The spin is in the choice of the growth rates, quarterly compared to a year ago. Over the last four quarters, it has been just 1.33 per cent, and over the last five years, an overall increase of just 2.24 per cent. So much for our years of IMF austerity!
Most galling this time around, and not for the first time, is the celebration that the target primary surplus of $37.8b (the seven per cent of GDP required by the IMF programme) has been far exceeded, reaching $56.2b. This surplus is the amount collected in taxes that is not spent providing government services for the people who elected it in February 2016. Instead, it goes to local and overseas creditors, especially the banks, which are locally and worldwide still making record profits despite having brought the global economy to its knees in 2008 (and in 1997 for Jamaica).
Just when our roads and schools and hospitals are crying out for sufficient finance, the Government chooses to underspend on these things - who are they answering to? Not the electorate for sure. Just as bad is the underspending on capital (infrastructure) programmes, which were budgeted at $26.9b but received only $19.7b. If growth is to occur, surely every possible penny needs to be spent improving infrastructure and supporting consumer demand, which, in turn, drives business expansion.
Spending on government wages and salaries was also below target, at $95.7b rather than $99.9b. Why the spin on this item, now at 10 per cent of GDP and targeted at nine per cent, as if it was all wasteful and would best be entirely eliminated? Is this money not spent on school, hospital and NHT staff, the police, etc?
As for unemployment, now down to 12.9 per cent, we are told. If we include the underemployed who work fewer than 25 hours per week, this figure becomes 20 per cent. And including those working fewer than 35 hours, it rises to 25 per cent.
Bear in mind also that many jobs do not come with security or benefits, including hotel workers who may now finally start receiving pension provision. Even so, the Government should be ashamed that the seed money for this pension fund is to be taken from the Tourism Enhancement Fund (TEF), depriving tourism investments, when, in fact, it is the hotel employers who should be entirely responsible. Minister Bartlett, this is just about as bad as your idea to help US citizens pay for their passports, as you did a few years back. I'm surprised the PSOJ rep on EPOC hasn't complained about this.
Finally, we should be reminded just how long debt has been a millstone around our necks. GDP is now just about at the level of 1992 in real terms. Debt to GDP may have been brought down from 135 per cent to 120 per cent in the last two years, but this was mostly because of the PetroCaribe buy-back. A target of less than 100% has been set for the next five years or so, with the same austerity and world-record-breaking primary surplus draining every chance of locally driven growth during that period, with continued real wage and job freezes in the public sector, starving vital government services.
The IMF itself makes clear that growth of the order of five per cent per annum is the only fundamental answer to debt, but its advice precludes that option.
As always, I have to finish with the alternatives, which indeed others have applied with recovery (stronger growth) from the shock-and-awe often taking place within two or three years. We need a moratorium on debt payments (just as a business in trouble might be granted), or limits set on the amount devoted to debt servicing, combined with a forensic debt audit and write-off of the odious portions, especially the FINSAC part (40 per cent of the total), which should become the responsibility of the IMF and World Bank that imposed an uncontrolled, ideological liberalisation programme on Jamaica in the early 1990s.
I am looking to the non-apologists on EPOC to speak out each time, not just the co-chair, issuing a minority report if necessary, suggesting modifications to the programme that would allow the government to fulfil the prosperity promises made just ten months ago.