Mon | Oct 22, 2018

Paul Ward | So what of Michael Lee-Chin?

Published:Sunday | September 23, 2018 | 12:00 AM

It seems like the International Monetary Fund (IMF) strategy for Jamaica is not working. Despite passing all the tests, the solid platform for growth is not generating growth.

Yes, lots of Chinese investment and lots of insecure jobs in the BPO and tourism sectors, but still little growth and certainly not prosperity.

The problem seems to be Jamaica's private sector not investing, according to both PM Holness and our IMF country rep. The incentives to invest (in other than government paper) are apparently in place, but no response.

Holness, a great believer (like his mentor) in the capitalist free market and small government, may need to think again. Could it just be that the Government needs to start the ball rolling with some of the debt-servicing cash that is tied up with not only meeting, but exceeding, the primary surplus target (incidentally, at 7% of GDP, the highest demanded by the IMF in the world). We might then get an inclusive society where everyone can access quality education, employment, healthcare, utilities and transport links.

Or is it that our now very-silent growth guru, Michael Lee-Chin, needs to step up and show the way using the outsize profits still being made by the National Commercial Bank, disgusting because they come from extortionary bank charges and a remaining very wide interest rate spread between lending and borrowing rates.

 

A TRAP

 

Holness is in a trap. Not willing to back calls for the Bank of Jamaica (BOJ) to regulate the banks (and hence their exorbitant and anti-developmental profits), not willing to consider the state as a possible driver of growth and now not even willing to blame Jamaica's private sector - he said he is merely encouraging them.

Years of wage restraint and hardship for so many Jamaicans all coming to naught, being made even worse now with the impact that the collapsing exchange rate will have on prices/inflation, years wasted. The promise of prosperity (by both Jamaica Labour Party and People's National Party) as the debt-GDP ratio comes down towards 100% now an empty promise, and a failure of IMF policy.

But why should the power brokers, including the IMF, care? Continued debt slavery is what this financialised capitalist world is all about. Even the crash of 2008, which they caused, making only a small dent in the accelerating levels of inequality, both within and between countries.

Surely a recipe for disaster.

- Paul Ward is a member of Campaign for Social & Economic Justice. Email feedback to columns@gleanerjm.com and pgward72@gmail.com.