Damien King must tell whole truth on economy
THE EDITOR, Sir:
This is a response to the article quoting Damien King, 'Stay the course', in The Sunday Gleaner of July 19, 2015.
Did anyone say that an alternative path would be an easy one? What the Greek example shows is just that unsurprising fact.
Damien King chose not to remind readers that Greece has been implementing a severe austerity programme for at least five years, and yet the debt and the problems do not go away. Those of us who suggest an alternative to the IMF orthodoxy and analysis (which the IMF has admitted is flawed) believe that the painful adjustment, which is, no doubt, necessary, may as well be in DIRECT pursuit of a better future, rather than one which follows on from (at some unspecified and unknown date) that elusive 'solid macroeconomic base'.
Being a goody-two-shoes and poster child for the IMF does admittedly give access to borrowing at possibly lower interest rates. But it doesn't do anything substantial to encourage the strong growth which I know even Damien King believes is necessary.
Stronger local demand (through a lower primary surplus) is needed, because export-led growth cannot be relied on (we don't hold that handle), not to mention that the infrastructural (capital) development necessary for us to compete is part of the austerity cuts. Banks in their right mind do not squeeze indebted and struggling companies too much if they believe bankruptcy can be avoided for obvious reasons, including their own self-interest.
Damien, you also chose not to point out that the very existence of a primary surplus means that we are not living beyond our means. In fact, it's just the opposite.
Without debt servicing, MORE is taken in taxes than spent on the people who pay them (yes, us Jamaicans) in terms of government services. For those who, for their own benefit, chose to persuade us that all debt, no matter its origin, must be repaid and repaid several times over (when interest is factored in), this may be a problem.
But such a belief, extending simple (and correct) moral principles to more complex spheres, is just ideology, the ideology of the plutocrats for whom the current global financial architecture is their invention/imposition and also their nirvana.
If we declared a moratorium on debt servicing, did a forensic audit before cancelling the odious part of the debt (including the 40 per cent FINSAC part), and allowing/facilitating economic growth then, painfully, yes, painfully given the sabotage that would take place, we could work towards a better future, rather than simply hope for one though IMF/plutocratic/creditor orthodoxy.
Enough is collected is taxes, and more, to make this possible and, hence NO MORE borrowing would be needed. Please don't forget to remind readers that all our borrowing, and more, is simply recycled into paying debt.