Ian Boyne
THE ISLAND is bracing itself for the economic storm on the horizon. Many have no material with which to batten down. And the foundation of our economic house is anything but firm.
If there were ever a time when Jamaicans needed to unite and band together, it is now. And if there were ever a time when the costs of our political tribalism and low social capital would prove unbearably onerous, it is now. Cut through all the economic jargon and verbiage which now inundate the morning and evening talk shows, as well as the print media: The gravamen of the issue facing Jamaica today revolves around trust, credibility and hope.
Do people really trust this Government to get Jamaica out of the economic hole we are in? Can the Government's promises, projections and assurances be taken seriously? When the Prime Minister speaks, can we put any store in his words? Does the Minister of Finance have any credibility? Is there any hope that after tightening our belts, and making the sacrifices, that there will be any light at the end of the tunnel?
Let's face the facts: The Jamaica Labour Party, languishing in the political wilderness for the last 15 years, sees our economic crisis as a golden (no pun intended) opportunity to rouse anti-Government sentiments and back the Government in a corner for an early election. The tough decisions that the Government have to make can incite widespread anger and protests and the JLP can easily exploit that.
The JLP has no incentive to co-operate with the Government in getting the country out of the fiscal crisis the Government is in. Indeed, on 'Nationwide' on Tuesday Party Chairman Bruce Golding compared the Government's plea for partnership to a man who had just boasted about his driving prowess to onlookers who goes into the car asking the occupants of the vehicle what he should do. The Government was recently elected and they must govern rather than hide being the skirt tail of the private sector, Golding ridiculed, making reference to the private sector group led by Beverley Lopez who is coming up with strategies to tackle the economic crisis.
Opposition Leader Edward Seaga has also told the Breakfast Club that it is too late in the day to ask for Opposition help. After all, as he said in his New Year's message, you must beware when trying to save a drowning man that you don't drown in the process! The JLP does not want to drown politically. Indeed, the hardened tribalists in the party would be salivating over the opportunity to embarrass the Government over the hard choices which it has at this time.
INTEREST GROUPS
Jamaica does not have the sharp ideological divisions of the past and because the PNP has been following the neo-liberal model of development favoured by the private sector, the natural alliance that used to exist between the JLP and the private sector no longer holds. The private sector no longer feels threatened by the PNP and the JLP has lost much of its glamour anyway. The private sector is very pragmatic. It has no natural interest in pressing for fresh elections and it reasons, matter-of-factly, that since it has to do business in a country governed by the PNP for the next few years, it might as well offer as much support in the quest is to improve the economic environment. Political unrest is not in the private sector's interest. The agenda of Eddie Seaga and Bruce Golding is not the agenda of the moneyed classes not this time.
The unions are willing to lend support not so much out of affinity with the Government but from a position of weakness. Things have turned drastically against labour in this era of globalisation. The workers now hold the blade and the unions are fully aware of this. It is in no position to bluster and make demands, for the entire society, moulded by the media, have been oriented toward the view that a big part of our problem is labour. And the facts actually bear out that wages have outstripped productivity. Labour has been marginalised in neo-liberal economies.
Our unions are not in a time warp and they have smelt the rat. They realise that the tide has turned dangerously against them. Certainly none of the public sector union leaders can breathe a word of threat to Government, for if the Government cuts the public sector drastically there won't be much hue and cry in the streets. The talk shows and the media in general have successfully sold the inevitability of the neo-liberal model which calls for 'labour market reforms', and this is now the economic common sense of the society. Even the Jamaica Labour Party is forced to accept indeed is calling for cuts in public sector employment.
So, in effect, all the parties and interest groups are acting in their own interests: the private sector needs to maintain its profits in the short-term rather than lobby for a change of Government; the unions have had the ideological rug pulled from under them and they are flat on their feet, and the JLP sees the chance for an early re-entry
into Government. The Government, for its part, needs the partnership and co-operation of every sector of society to maintain its power. Meanwhile, there is a large constituency of people the largest majority in the country, actually who are not loyal to any of the parties and who simply seek to improve our standard of living in a very difficult environment.
A PROBLEM OF TRUST
There are people who are passionate about the view that our economic crisis has been caused by the corruption, mismanagement and cronyism of the PNP Government; that Omar Davies' statement that he allowed things to 'run' on the road to the fourth term tells all and that it is wicked to ask Jamaicans to pay the price for that political expediency. They are in no mood for co-operation. Indeed, they might even wax righteously indignant and say that co-operation and partnership with a Government like this would be treachery and an encouragement to 'further corruption'. The Government has no credibility and must go and allow people who can command the confidence of the Jamaican people to govern and who can release their entrepreneurial energies, these persons say.
So, in the midst of our severe fiscal crisis, our political tribalism and divisiveness act as a major brake on development. Studies done by the outstanding economists Dani Rodrik and William Easterly have shown that countries which have weathered their economic crises have had a high social capital base and found creative ways of brokering social partnerships and promoting cohesiveness.
My biggest fear for Jamaica is not economic. It is cultural-sociological. My biggest fear concerns our low levels of trust, our low conflict resolution skills, our fractiousness and our ineptitude in generating consensus. But there are encouraging signs. The Partners for Progress group, consisting of the private sector and various other interests, is a step in the right direction.
Let's get this straight: Whether we have an election in the next few months or the next few years, we will still have a severe fiscal and debt crisis to face and we will still need a social partnership to solve that problem. If the PNP is vanquished in the next few months, the JLP will need its support to tackle our grave economic crises. Then the JLP Government would be talking co-operation and unity and the same Bruce Golding and Edward Seaga would elicit support from the PNP in the 'public interest'.
There are some of us who can't play the political game while Jamaica is burning. We have to survive now and we have to make hard choices today. We can't wait on fresh elections or the resignation of a Finance Minister. The sooner we get our minds on the fact that even after an election that would bring the JLP to power, thousands would still have to be laid off from the public sector; critical public sector infrastructural projects would have to stop and social expenditures would have to be cut, while new taxes would have to be raised, bringing untold hardships on our people. The sooner we prepare our people for the economic facts of life rather than selling them fantasies of either the PNP or JLP variety, the better.
'CRISIS PROOFING'
I have carefully read the 220-page country economic report on Jamaica by the World Bank just issued last month and titled Jamaica: the Road to Sustained Growth. Anyone who believes that a mere change of Government is what we need should take the time to read that report. I have also digested the latest IMF Article IV Consultations on the Economy for Jamaica, released in December. Both of these documents show that Jamaica's problems are far deeper than a simple PNP-JLP matter.
Sure, both reports confirm what Edward Seaga has been telling us for years: That the Government's 'premature' liberalisation of the financial sector is at the root of or the financial crisis which engulfed us, necessitating FINSAC. "The seeds of Jamaica's massive financial crisis were sown in the early 1990s with the privatisation of financial institutions to weak investors and the financial liberalisation in the context of weak regulation and supervision. In this environment and with attempts to tighten monetary policy ineffective, a huge credit boom developed."
So if we want outside validation of the blame that the JLP has placed at the feet of the PNP Government, we have it from the two most influential Washington Consensus institutions (which, incidentally, have come under significant criticism from some of the most learned scholars for sloppy analysis and failed policy prescriptions.)
Let's be clear, though, that even these two principal institutions of the global capitalist class have retreated from their formerly narrow approach to economic development, and have now enthusiastically embraced 'pro-poor policies' as being central to any approach to dealing with fiscal crises. Talk about having adequate social safety nets is now an accepted part of what is called the Post Washington Consensus. The recently-issued World Bank report calls for 'crisis-proofing' in Jamaica's case.
"Crisis-proofing would mean being ready to offer relief to the poor in case crisis does take place since it is the poor who suffer most if a crisis should occur." (The authors were referring to the crisis of adjustment) The financial analysts our new gurus don't talk about protecting the poor when giving their analyses on the talk shows. And Jamaica today seems to have nobody with the clout to talk for the poor and marginalised. Such has been the ideological triumph of neo-liberalism.
ANALYSING THE ANALYSES
The Jamaican financial media regard the multilaterals as speaking infallibly, but a careful study of the 220-page World Bank report and the over 60-page IMF report show contradictions. While calling for cuts in employment, lauding Jamaican dollar depreciation and urging increased taxation, including on the hotel sector, as well as the removal of protection to Jamaican farmers, the World Bank talks about making "all-out and systematic efforts" in fighting crime and putting more resources into education and infrastructure while extending credit facilities to small business. How can the Government cut expenditures and increase expenditure at the same time?
I agree with the World Bank about Government's selling off assets, accelerating its privatisation programme, as well as rationalising functions. Duplicating agencies should be cut. But the JLP politicians will have to come clean with the people and the media must demand this. Eddie Seaga, Audley Shaw and Bruce Golding must make it clear that they believe, like the World Bank and the IMF, that at this stage in the crisis, people would have to be laid off, taxes have to be increased and expenditure on education, housing, health and security would have to be cut.
The World Bank report itself notes that four ministries alone Finance, Education, National Security and Health account for more than three quarters of public sector employment and 90 per cent of Government revenue so cost-cutting is a "complex issue that bears detailed investigation." The cuts in the public sector will affect every other sector. In short, the kinds of measures needed to deal with our fiscal and debt crisis will cause significant suffering to the masses, whoever is in power. Blame Omar all you want, but let the people know that at this stage pain is inevitable. Some might say that at least with the JLP there would be a hope that the suffering would not be in vain. Okay.
But I guarantee you that unless we can pull the society together, build social cohesion and imbue people with a sense of national purpose, the short-term suffering will overwhelm the sense of hope.
Jamaica: The Road to Sustained Growth says very significantly: "Jamaica's most conspicuous and severe problem is the erosion in the rule of law (and) the rule of law has been shown to have a strong statistical relationship to economic growth and poverty reduction." We are back to social
capital issue which I have always maintained is our number one problem.
The World Bank recommends, "Build social capital such as greater trust and lower tolerance to crime and violence, especially through interventions in the home, school and the workplace." Values and attitudes. Our economic woes are merely symptoms of larger cultural and sociological problems. Using political solutions to solve cultural-sociological problems is madness.
Ian Boyne is a veteran journalist.
You can send your comments to ianboyne1@yahoo.com.
