Sat | Dec 10, 2016

Honourable default?

Published:Wednesday | January 20, 2010 | 12:00 AM

Gordon Robinson, Contributor



Gordon Robinson

This Government has looked to be the worst of our brief history but there are signs that the worm is turning.

All Jamaica needs to stand up and applaud the manner that the Government went about defaulting on its local debt (oops, sorry, "reducing interest rates"). Seriously. Fun, joke and domino apart, the Government has done what had to be done, regardless of the political fallout and has done it in the right and proper way - no edict. Well, no edict from the JLP (except for Audley "Are You" Shaw who translated "speak softly and carry a big stick" into speaking loudly and telling everybody that he had a big stick). No doubt, the edict came from the IMF to the Government, but never mind. Kudos to the Government for doing the right thing, however unpalatable, and for starting the long, difficult turnaround.

However, make no mistake about it, this is just a start. And it's being done assy versy. This should've been the final act in the turnaround, not the first. But circumstances do alter cases. Now we must insist that there is a similar urgency to implement the rest of the about-turn. Here's what we must ensure that our Government does, and flatly refuse to take "no" for an answer.

Proceed with deep and lasting expenditure cuts now, not next month or next year. No need for committees. We all know what needs to be done. It begins at the top and ministries must be eliminated and merged. The first to go should be the Ministry of Tourism which is a caricature of redundancy. Let the JTB do its work. The hard-working and effective Ed Bartlett can be re-assigned but that ministry must go. We don't need more than 10 ministries maximum. And the civil service/statutory boards need radical reduction. Why do we have two Statutory Bodies to regulate one racetrack open one half-day per week, together with a few online betting operations? And now I hear a third is coming to regulate a casino with modern online equipmen.

Keep a tight hold on monetary policy so that inflation returns to single digits. Any assault on the exchange rate must be stoutly defended which can be the only real reason for International Monetary Fund (IMF) support. Although it would be unrealistic to dictate a fixed exchange rate (remember - no edict required), we can't afford any slippage. Fiscal imbalances must be outlawed so that monetary policy can achieve this end.

It's time. We must no longer depend on the good faith or sense of our leaders, even though we must assume this to be so. Rules must be passed, having constitutional effect to limit borrowing powers and fiscal deficits. We need a facilitation of foreign ivestment act, mandating the encouragement of investment as opposed to the current stifling effect of a beaurocratic blanket of well-thinking siphon-dwellers falling over each other to cut off our nose to spite our national face.

And now for the dirty word. The way forward must include some sort of federation with like-minded states of the region, and beyond if necessary. We must face the next global crisis as a united economy of a size that can at least try to make a dent in the economic forces that seek to conquer and rule us from afar. Maybe we still won't be big enough but we must try.



( l - r ) Bartlett, Shaw

"Sorry but no Federation again.

I think it's a big shame.

After much efforts and energy, goodbye everybody.

Right now it's only a memory.

We fail miserably.

Some say we shouldn't help part it

but is Jamaica start it!!

But If dey know dey didn't want Federation

and dey know dey don't want to unite as one.

Tell de Doctor you not in favour

Don't behave like a blasted traitor

How the devil you say you ain't federating no more!"

So, congratulations are in order for the Government's debt-management initiative, win or lose. But this is no time to sigh with relief and fool ourselves that the job is done. Locally, our financial institutions and individual bond-holders must now appreciate that they are a de facto local IMF entitled to insist on conditionalities for our huge $40-billion grant to the Government. Unlike the IMF, we won't be repaid in cash. We must insist on being repaid in good governance, fiscal balance, and constitutional restraints to ensure that this type of default on local debt never, ever recurs.

Peace and Love

Gordon Robinson is an attorney-at-law. Send feedback to columns@gleanerjm.com