Mark Ricketts | Finance minister and Jamaica’s economic independence
Excerpts of a very elegant speech given by Dr Nigel Clarke at a labour market forum were carried by The Sunday Gleaner of April 15. The finance minister noted that Jamaica has gained significantly from the steadfast implementation of fiscal, monetary, and structural policy reforms across two consecutive administrations.
“It has to be our ambition, therefore, that when we conclude with the IMF this time, we avoid reversal, and instead manage our affairs in a thoughtful and disciplined way so that our exit is sustained over time.”
Exits from the IMF by Jamaica, which were always short-lived, occurred in the 1970s, 1980s, 1990s, and in the first decade of this century.
Dr Clarke said further in his speech that high levels of national debt compromise our economic independence.
It is not the debt per se that strangles Jamaica, it is many of the bad policies pursued by Government that account for the high debt. Then we mask it by continued contraction in capital expenditure, as seen in this year’s Budget where expenditure falls to $213.6 billion from last year’s $290 billion. This leads to a worsening of our infrastructural deficits, continued increases and enlargement of squatter settlements, delays in modernising the public sector, and an inadequate supply of relevant, first-rate human talent.
If we are short of capital to do the right things efficiently and effectively, why is the Government contemplating running away from a major source of funding that not only insists on accountability and rigid and relevant ratios but pushes us to do better.
Even with imposed checks and balances and external auditing, we squander and procrastinate, as with our 80 different allowance categories in the public sector, which perpetuate inequities and privileges. The IMF has insisted on rationalisation, yet we delay. Moreover, Government oftentimes is simply not transparent.
Three weeks ago, TVJ revealed that the number of flights, as well as passengers using the Ian Fleming International Airport in Boscobel, St Mary, has been decreasing for most of the last five years. Operating expenses during this time were $380 million, as against combined earnings of $33.5 million. There are concerns that the airport is not attracting enough of its target clientele, namely high-end tourists.
Large-scale capital expenditure
Having broken ground recently, Government has now announced large-scale capital expenditure to expand the terminal building and widen the runway in Phase One. In Phase Two, new terminal buildings will be constructed and the runway, extended by 700 feet, will run across the highway.
While this announcement was public, financial details and information about the number of passengers and flights were extremely private for the people of Jamaica who might have to cover the costs for years to come, if current trends are not reversed.
If it had not been for the persistence of TVJ in requesting financial information, we would be in the dark. The station made requests through Access to Information (ATI) over a year ago but has been denied access by the Airports Authority of Jamaica on the grounds that divestment negotiations involving another airport could be compromised.
TVJ decided to take its case to court and only then got what it wanted.
With such a major capital undertaking having various possible outcomes, especially given prior years’ massive losses, Government should let its citizens know what is going on. It is called trust, transparency, and accountability.
There might be very good reasons to expand the runway, given tourism’s record performance, but how are we to know and how are we to keep tabs on matching performance with promises if the Government plays hide and seek with us?
The big question is, if a government continues to spend money on a project when annual deficits are substantial, then keeps all this from its citizens by offering various excuses, is such a country ready for economic independence? Is such a government showing thoughtfulness and discipline in its management, as alluded to by the finance minister?
Given our partisan politics, avid JLP supporters will remind me that the PNP was no better, and, that is, exactly my point! When are we going to reach the level of political maturity, with lowered levels of partisanship, patronage, and nepotism, so at some point a party carries the vision and mantle of a more transformative approach to governance? It is so unfortunate that bad old practices, such as excessive partisanship which guts nation building, remain unchanged.
Or take a very simple case of purchasing $400 million worth of cars needed by the police at a time when crime and violence are out of hand and the law enforcers are short of mobility. Now, there is one thing Jamaica has, and that is plenty of new- and used-car dealers. At times it appears every vacant lot is chock-a-block with automobiles, suggesting we have choices among dealers as to capacity and expertise. How can a Government that is talking seriously about its country’s readiness to march to economic independence find a dealer with limited ability to pay the requisite taxes and little capacity to manage a multimillion-dollar undertaking? How can a government that says it is ready for economic independence do such little due diligence that it forks out $200 million upfront, on the strength of a $36-million security deposit and cars to be delivered, when, and whenever?
But if the Government is not ready for prime time on the big economic independence stage, what of its citizens, who have essentially remained stoic and docile, except for a few letters to the editor and the occasional outburst or two on call-in programmes? Why hasn’t there been public outcry about knowing how, in this 21st century, we got into this pickle, and whether most of the $200 million is dead as a doornail, or whether the contract is on life support and well beyond redemption? Is it that people have grown indifferent to yet another blunder by government?
It is interesting that a government that was focused on robust growth, talking ad infinitum about 5-in-4, is now shifting gears and emphasising reducing our debt and saying bye-bye to the IMF as a sine qua non or a basis for economic independence. Without more substantial gains in the real economy, in GDP, in visible exports, in innovation, in modernisation, in capital expenditures, in thoughtfulness and discipline to manage our affairs much better, I am tempted to say, do cry for us, Jamaica.
- Mark Ricketts is an economist, lecturer and author.