D.K. DuncanD.K. Duncan
(The column on Tuesday was previously published but inadvertently filed again because of a computer glitch).
THE POLITICAL and economic climate which has prevailed since the beginning of the 2004 budget exercise is in sharp contrast to that which existed in the similar period last year. There appears to be a calm confidence among the main players in the economy. While there is no doubt that the budget debate itself attracts very little public attention, the society at large seems to have taken their cue from the main players.
However, in the absence of national public opinion polls it is difficult, if not dangerous, to conclude that the majority of Jamaicans share this confidence. What is beyond doubt is the absence of any immediate issue which could lay the basis for social unrest. The major exception is the under-funding in the Estimates of the Fire Services with the potential for serious public reaction if a major disaster should occur as a result. Another is the possibility of resistance to burdensome user fees, especially in the health service.
PARTICIPATION
The principal reasons for this positive post-budget climate, it could be argued, arise from the pre-budget activities of the Finance Minister and his team. The prior consultations with the Trade Union leaders, Private Sector leaders and Parliament were essential aspects of these activities. The gas riots which followed his 1999 budget presentation and the protests after the GCT fiasco of the untidy 2003 Budget seem to have concentrated the mind of the Minister. It underlines the value of participation, sharing of information and consensus-building. The challenge to the Minister is to embody these characteristics in the culture of governance and not wait until his back is against the wall.
PRIME TARGET ACHIEVED
The Finance Minister has pointed to a number of other factors which helped him to put together this year's budget. Chief among these was achieving the 5.7 per cent target set for the fiscal deficit. Contributing to this was the significant tax revenues collected in the last quarter of the financial year and the successful raising of loans from Scotiabank, Royal Bank of Trinidad and Tobago (RBTT) and most importantly, the European financial market. Many observers are in no doubt that the local economic climate arising from the positive discussions between the government, the unions and the private sector were important in facilitating those successes.
MOU CRITICAL
Not to be underestimated is the absence of new tax measures. The Minister is very clear that the situation would have been different in the absence of the Memorandum of Understanding (MoU) with the Trade Union leaders. The spectre of increasing wage claims leading to further demands on the revenues loomed large. Visions of lay-offs and redundancies, increased taxes and eventually the missing of the target set for the fiscal deficit were in sight. All of this was pre-empted by transparency, consultation and participation a qualitatively different situation when compared to April 2003.
ON TIME
The Minister and his staff continue to present the budget on time. For some years now the Estimates of Expenditure have been tabled at the beginning for the financial year. This has not always been so. It requires a kind of discipline which is one of the positive characteristics of the present Minister. Dr. Davies had telegraphed a "boring budget" a few weeks before the presentation. He may now feel that boring is better than the untidy tax package of 2003. Boring is less painful than the gas riots of 1999. Boring is good if it is a product of participation and consensus. Boring is even better with the absence of social unrest.
ON COURSE
Basking in the prevailing social and economic climate, there seemed to be some basis for the "hope and confidence" expressed by the Prime Minister. Anticipating significant investments in the real economy, he asserted that there was "no need to change direction". With the MoU in place until March 2006 and the private sector's Partnership for Progress yet to mature, the next major endogenous budgetary challenge is not likely to be before April 2006 courtesy of the politics of participation. One Love, One Heart.
A Dental Surgeon, Dr. D.K. Duncan is a former Cabinet Minister and
General Secretary in the PNP administration of the 1970s.
