Peter's hope - Phillips confident public-sector wage agreement will be reached without derailing economic programme
Finance Minister Dr Peter Phillips is expressing hope that the current negotiations with public-sector groups will be settled amicably without derailing the country's economic-reform programme.
Speaking with The Sunday Gleaner last Friday in the wake of reports that Greece had missed a payment to the International Monetary Fund and would instead opt to bundle the country's four June payments into one, which is now due on June 30, Phillips reiterated his commitment to Jamaica's programme.
"What I do know is that opting out is not an option for us. It would be national suicide for us to decide to withdraw from our obligations," declared Phillips.
"We can always have discussions, as we do from time to time about specific elements of our programme, but ultimately, abandonment of the programme would mean, first of all,
that you would have access to credit drying up, ... our reserves would disappear in short order, even private investment would immediately move downwards.
"You run the risk of capital flight, you run the risk of withdrawal of private credit to private entities, and moving the economy to a cash basis," added Phillips.
Phillips argued that any deviation now could be disastrous.
He noted that three years ago, the Government was spending just shy of 80 cents out of every dollar to pay debt and wages, with a little more than 20 cents available to pay all the other bills, including infrastructure developments.
"Now that 20 cents is in the order of 40 going close to 50 cents, but it is still too high ... and that is why our programme involves reducing the debt and reducing our share of public-sector wages in the scheme of things."
MET LEFTOVER OBLIGATIONS
The finance minister noted that over the period, the Government has succeeded in meeting all the obligations that were left over from the previous administration, including back pay for some public-sector workers and paying amounts related to the reclassification of some posts.
"That has amounted to close to $30 billion overall. So we have met that and we have also met the obligation to not lay off people who were in jobs in the public sector. Based on these, some persons in the public service - some, not all - have received increases, ... but there has been wage restraint."
Phillips said now that Jamaica is halfway through the programme, any change could return the country to where it was at the start.
"Then you are ensuring that the platform for growth will never be laid, and that is what we are urging an understanding of.
"But I must say, I am hopeful. I am very, very hopeful based on what I understand has been the exchanges between the government team led by [Minister Without Portfolio in the Finance Ministry] Minister [Horace] Dalley and those teams he has met," declared Phillips.