Mon | Apr 24, 2017

Gordon Robinson: Jamaica swallows a horse

Published:Sunday | July 12, 2015 | 7:00 AM
A woman gives a euro coin to a street musician as he plays with his accordion at a main shopping pedestrian street in central Athens, Greece, last Friday.

Does Government believe its pompous, insincere entreaties for 'sacrifice', or is that the Old Lady of Washington's ( IMF) arm I see stuck up spokespersons' rear ends ensuring output corresponds with "IMF programme is the only way"?

I know an old lady who swallowed a fly.

I don't know why she swallowed the fly.

Perhaps she'll die.

Why punish Jamaican taxpayers for governments' abuse of usurped, unchecked, anti-democratic powers? Nobody asked us to agree to several irrational bailouts, especially of banks resulting in public debt stock at 140% of GDP. Who needs 'bailout' now?

Accordingly, I don't care how many ballot boxes, stuffed by party hacks during farces misnamed 'elections', put whoever in government. I won't tolerate pretentious, faux austerity sermons while ministers live ostentatious lifestyles. I WILL question puppets' or vested interests' abuse of economic dogma to cover up political excesses by feeding global inequity with Jamaicans' lifeblood.

Recent Greek history is instructive. CIA World Factbook (2015) estimated Greek GDP as 80.6% services (Jamaica 72%).

I know an old lady who swallowed a spider

that wriggled and jiggled and tickled inside her.

She swallowed the spider to catch the fly.

I don't know why she swallowed the fly.

Perhaps she'll die.

CIA Factbook: "The Greek economy ... went into recession (2009) [because] of world financial crisis, tightening credit conditions, and ... a growing budget deficit. By 2013, the economy had contracted 26% compared with [2007] pre-crisis level. Greece ... 2009 budget deficit ... [reached] 15% of GDP. Austerity measures reduced the deficit to about 4% in 2013 ... ."

Jamaica's GDP contracted 0.5% in 2008. In 2009 (second quarter), STATIN reported a record low (-4.50%) in Jamaica's annual growth rate. Minimal growth (average 0.2% per annum) found 2013 GDP up 1.2% over pre-crisis 2007. In January 2012 (pre-IMF), our debt was 140% of GDP (Greek debt was 180%). Jamaica's budget deficit has NEVER reached 15%. World Bank statistics have Jamaica's deficit at 5.8% (2010); 5.9% (2011); and 4.0% (2012).

Should both take identical 'bitter medicine'?

I know an old lady who swallowed a bird.

How absurd to swallow a bird!

She swallowed the bird to catch the spider

that wriggled and jiggled and tickled inside her.

She swallowed the spider to catch the fly.

I don't know why she swallowed the fly.

Perhaps she'll die.

So, how'd IMF austerity affect services-dependent countries like Greece?

CIA Factbook: "Deteriorating public finances ... and consistent underperformance on reforms ... led [Greece] into financial crisis. Under intense pressure from EU and international market[s], government adopted a medium-term austerity programme, [including] cutting government spending, decreasing tax evasion, overhauling health-care and pension systems, and reforming labour and product markets."

Familiar?

"Athens, however, faced ... widespread unrest from [Greece's] powerful labour unions and general public ... . In May 2010, [IMF] and eurozone governments provided Greece emergency short- and medium-term loans worth $147 billion so [Greece] could make debt repayments. In exchange ... , government announced spending cuts/tax increases totalling $40 billion over three years, on top of tough austerity measures already taken."

I know an old lady who swallowed a cat.

Imagine that, to swallow a cat!

She swallowed the cat to catch the bird.

She swallowed the bird to catch the spider

that wriggled and jiggled and tickled inside her,

She swallowed the spider to catch the fly.

I don't know why she swallowed the fly.

Perhaps she'll die.

What's bitter medicine's purpose? For whom does it work? Greek 'bailout' money paid debt. Since most creditors were EU members, that means Peter loaned Paul to pay Peter. Nothing entered the Greek economy, yet already overburdened taxpayers were expected to foot all bills.

I know an old lady who swallowed a dog.

My, what a hog, to swallow a dog!

She swallowed the dog to catch the cat.

She swallowed the cat to catch the bird.

She swallowed the bird to catch the spider

that wriggled and jiggled and tickled inside her.

She swallowed the spider to catch the fly.

I don't know why she swallowed the fly.

Perhaps she'll die.

In March 2012 (pre-IMF), Peter Phillips proposed 6% primary surplus; increased to 6.9% in 2015-16 when he predicted a balanced Budget. To that end, he imposed J$20 billion in new taxes. After visiting Washington, cap in hand, head bowed and a figurative "Yassuh, Massa" as negotiating strategy, IMF imposed an immediate, impossible 7.5% primary surplus.

STILL RUNNING BUDGET DEFICITS

Despite gazillions in more new taxes nailing to the cross poor Jamaicans with no jobs, unsuitable education, inadequate health care, no security, no hope, we're in 2015-16's budget year STILL RUNNING BUDGET DEFICITS (2.3%).

I know an old lady who swallowed a goat;

just opened her throat and swallowed a goat!

She swallowed the goat to catch the dog.

She swallowed the dog to catch the cat.

She swallowed the cat to catch the bird.

She swallowed the bird to catch the spider

that wriggled and jiggled and tickled inside her.

She swallowed the spider to catch the fly.

I don't know why she swallowed the fly.

Perhaps she'll die.

CIA Factbook: "Greece struggled to meet 2010 EU-IMF targets ... ."

On Jamaican taxpayers' broken backs, ministers drive new SUVs; millions in tax waivers go to a chosen few monthly; and Jamaica passed eight IMF tests.

CIA Factbook: "European leaders-IMF agreed (October 2011) to a second bailout package ['Bailout II'] of US$169 billion. The deal called for government bondholders to write down ... their holdings. As Greek banks held significant portions of sovereign debt, the banking system was adversely affected ... so US$41 billion of ['Bailout II'] was set aside to ensure the banking system was adequately capitalised. In exchange for ['Bailout II'], Greece promised to introduce an additional US$7.8 billion in austerity measures ... ."

Shades of JDX-JDXII? IMF priorities never change. Banking systems must be "adequately capitalised" from borrowed funds repaid by Greek taxpayers. Also, Greeks were again punished with "an additional US$7.8 billion in austerity measures". What a deal! Guess how bitter medicine worked?

CIA Factbook: "Massive austerity cuts prolonged Greece's economic recession and depressed tax revenues. Throughout 2013, Greece's lenders [insisted] Athens step up efforts to increase tax collection, dismiss public servants, privatise public enterprises, and rein in health spending ... ."

I know an old lady who swallowed a cow.

I wonder how she swallowed a cow?!

She swallowed the cow to catch the goat.

She swallowed the goat to catch the dog.

She swallowed the dog to catch the cat.

She swallowed the cat to catch the bird.

She swallowed the bird to catch the spider

that wriggled and jiggled and tickled inside her.

She swallowed the spider to catch the fly.

I don't know why she swallowed the fly.

Perhaps she'll die.

CIA Factbook: "Subsequent reluctance to institute further cuts ... prompted Greek lenders to withhold bailout disbursements until December 2013. However, [by then,] investor confidence began to show signs of strengthening ... ."

Up to mid-2013, Greece responded to The Terrible Troika (EU, IMF, ECB) as Jamaica to IMF. But a testosterone injection produced a glimmer of hope by year end. In January 2015, Greece, in full revolt, elected a leftist prime minister who vowed to resist the Troika and negotiate better deals. At 'negotiations', the EU, led by Germany (likely most affected by any debt restructuring), baulked at real concessions.

So, PM Tsipras walked away with a do-your-worst shrug of his shoulders, following which (horror of horrors) Greece committed history's worst debt default.

I know an old lady who swallowed a horse.

She's dead, of course!

She swallowed a HORSE!!

My three sons grew up on There was an Old Lady, written by Rose Bonne (music by Alan Mills), as part of my bedtime story repertoire. It's a timeless guarantee of childhood excitement, especially when perennially favourite lyric "that wriggled and jiggled and tickled inside her" comes with actual rib-tickling.

IMF knows one way, prescribed generically by lazy bureaucrats unable or unwilling to customise for local peculiarities, namely, to chase austerity losses with stricter austerity measures until debtors' citizens choke to death. In 'negotiations', Greece's creditors offered:

- 2% primary surplus requirement reduction;

- Revised debt reduction's 2022 target from 110% of GDP to 142%.

Tsipras' replied, "No, thank you." Greeks, consulted by government in referendum, voted, "No, thank you." My favourite Gleaner columnist, John Rapley, in a brilliant column ('Greek tragedy nears climax', July 8, 2015) struck the first commonsensical chord in this Greek opera. Jamaica needn't vote 'no'. Jamaica isn't Greece. But, in IMF 'negotiations', Jamaica must understand creditors, despite bluff and bluster, fear bankrupt debtors more than debtors fear not paying creditors.

Reading the writing on the wall before the referendum, pouting EU lenders executed a 'you-can't-fire-me, I-quit' comedy routine by 'withdrawing' their offer, but the IMF, realising its 'targets' depend on "strong assumptions about labour-market dynamics and structural reforms" (listen up, Jamaica!), repeatedly proposed Greek "debt relief". Imagine that! Did Washington's Old Lady swallow a cat? Or does she want us to swallow a horse?

Peace and love.

- Gordon Robinson is an attorney-at-law. Email feedback to columns@gleanerjm.com.