Wed | Apr 26, 2017

Shaw over Phillips. Opposition spokesman picked as better finance minister

Published:Wednesday | October 15, 2014 | 10:00 AM
Audley Shaw
PHILLIPS
1
2

Gary Spaulding, Senior Gleaner Writer

With the political tide drifting away from the governing People's National Party (PNP), Audley Shaw, the former finance minister in the Jamaica Labour Party (JLP) administration, is currently viewed by a majority of Jamaicans as the better economic manager than the man who succeeded him in 2012.

Despite constant reminders by the Government that Dr Peter Phillips has manoeuvred the economic ship through choppy seas and into calmer waters, most Jamaicans are of the view that Shaw is the better man for the job.

In the most recent Gleaner-commissioned Bill Johnson poll, 45 per cent of the 1,208 respondent chose Shaw, the self-styled 'Man A Yard', as the better finance minister.

Phillips trails with 29 per cent, while another 26 per cent were undecided in the survey, carried out September 6 and 7 and on September 13 and 14, with a sampling error of +3% or -3%.

Among Phillips' accomplishments is a fiscal performance that remained resilient throughout 2013-14, with Central Government's primary surplus and budget deficit targets being met.

In this regard, Phillips' fiscal consolidation effort has boded well for the attainment of the key primary surplus target of 7.5 per cent of GDP for 2013-14 and over the medium term.

Inflation is also in line with single-digit projections.

On the external accounts, there was an improvement in the current account deficit.

However, his achievements have been mitigated by unemployment levels that have gone as high as 16 per cent and a crippling devaluation of the exchange rate that moved from J$88 to US$1 to the region of J$112 to US$1, conditions that have caused Jamaicans to buckle under their severity.

Since 2012, Shaw, the classic political extrovert, and the introverted Phillips, both agitators in their own right, have been facing off on the troubled economic landscape.

PASSING IMF TESTS NOT ENOUGH

Shaw has claimed that the Government has failed to set priorities and, instead, simply satisfied itself with passing International Monetary Fund (IMF) tests. He has argued that the Government is doggedly following an IMF programme which stresses passing its tests without regard for balancing the need for human development and economic growth.

Shaw, who during his time in office presided over a collapsed IMF programme, contended that Jamaica could not just blindly pass such tests while failing those of devaluation, inflation, the high cost of food and electricity, back-to-school expenses, cleaning dirty drains and gullies, public cleansing, and providing economic stimulus to the private sector to invest and grow the economy.

He suggests that the most glaring recent example was that while the Government bragged about an underexpenditure of $10 billion so far in the current Budget, it could not allocate a paltry $122 million to the fire services to repair 5,000 fire hydrants, 13 fire units and three ambulances.

"I have stated that we can co-exist with an IMF programme, but we cannot sacrifice everything to pass their tests," Shaw has said.

PHILLIPS DEFENDS RECORD

Phillips, on the other hand, has insisted that when he took over as finance minister from Shaw in the aftermath of the December 2011 general election, Jamaica was teetering at the edge of an economic precipice.

He has pointed to the meeting of all macroeconomic indicators and the passing of five successive IMF tests as signals of his successes.

For Phillips, passing the IMF tests has created stability in the Jamaican economy as the island has been meeting its targets in instituting key economic reforms that enable the country to draw down on funds to promote growth and employment.

Phillips has consistently acknowledged that despite the successes, there are still some difficulties to surmount, but suggested that life would have been considerably worse if the country could not pass the tests.

He has argued that prior to successfully negotiating the extended fund facility with the IMF, financing from external entities and investments was low.

gary.spaulding@gleanerjm.com