The following is a submission by the Caribbean Policy Research Institute (CaPRI).
IMF or no IMF, now that the honeymoon period is nearly over, the People's National Party (PNP) administration's best option to get through the impending fiscal crisis is to resume the Partnership for Transformation (PFT) social partnership process poste-haste.
As to be expected, and indeed as happened in the previous transition from one administration to another, the incoming Government has been sure to loudly declare that 'things' are much worse than we/they were led to believe. Clearly, this is a step in preparing the way for what are sure to be painful policy measures to address the fiscal deficit.
Regardless of the veracity of the claims of 'not knowing' (and the inevitable counterclaims), the fact is that measures will have to be put in place to address the deficit. These measures are likely to amount to cutbacks in government spending and/or initiatives to increase revenues - in a context of extant economic hardship for many, if not most, Jamaicans.
For the medium and long term, we can hope that the Government will implement its many campaign promises and proposals regarding improving Jamaica's dismal economic growth trajectory. But in the immediate instance, an active social partnership in the form of the PFT would greatly assist the Government and, indeed, the country to maintain stability and lend any new policies it implements credibility.
Should it need a reminder of the hows and whys of a social partnership process, the Government need look no further than the recent publication by the Centre for International Governance Innovation (CIGI), together with the Caribbean Policy Research Institute (CaPRI), Social Partnerships and Development: Implications for the Caribbean. Issued in December 2011, the research and analysis presented comprise a part of the Caribbean Economic Governance Project, which convenes researchers and private- and public-sector leaders to examine and provide answers and policy prescriptions to current economic governance challenges facing the Caribbean.
The paper outlines the history, process, and outcomes of what are deemed three successful social partnerships - in Botswana, Ireland and Barbados. It also provides a checklist of best practices that Jamaica (or any other interested country) can follow to give its own social partnership programme the best chance of success.
But a great deal of research is not all that necessary on the Government's part. A simple resumption of the PFT that has been in process since 2008 (though it wasn't officially launched until 2011) would suffice. The framework, the secretariat and the players are already in place; the private sector and civil society are keen to get back to work and have called for its resumption; and the reform agenda is already in train.
And as may not have been clear from the outside, it actually is not necessary that the Opposition participate for the process to be successful. After all, it would not be politically astute for any Opposition to involve and implicate itself in the formulation of policies that would then leave it little or nothing to actually oppose.
What is absolutely necessary is for Prime Minister Simpson Miller, or perhaps the minister of finance and the public service, to chair the PFT going forward. As the CIGI/CaPRI paper points out, and Jamaica's own recent experience shows, the credibility and efficacy of the process depend on a strong leader and his or her clear and ongoing commitment to the social partnership process.
The reform agenda that was in process in Jamaica via the PFT saw to the proposal, and in some cases, the implementation of measures and policies that are ostensibly reasonable, regardless of which political party is in office. Granted it may not be in the current administration's interest right now to move too speedily on the establishment of procedures for parliamentary scrutiny of appointments to sensitive posts, though policy issues regarding this amendment of the necessary Standing Orders were resolved after discussion with the administration when it was in Opposition, and the bill was to be tabled before it got lost in the pre-election kerfuffle towards the end of the year. But important measures were also put forward to address many specific dimensions of Jamaica's crime problem, including changes to the DNA policy and changing legislation to allow the security forces to better track the activities of gangs and organised crime.
'not all roses'
Most pressing right now would be to move forward with the measures proposed in the reform agenda to enhance fiscal responsibility and transparency. This is absolutely germane to the success and acceptance of whatever policy measures are necessary to accommodate any remedy to the crushing budget deficit.
But it's not all roses for the Government should the PFT resume its work. Achieving consensus on these matters will also augur well for the other PFT actors keeping the Government accountable to whatever it agrees to, whether in an IMF agreement or otherwise - which the Government would never admit to not wanting, but the Government may not perceive it worthwhile to submit itself to such constraints.
As well, the Government may not desire to resume the PFT talks on this particular topic, as civil society, the unions and the private sector are likely to continue to press for a prohibition of deferred financing arrangements, and strict limitations on expenditure excesses, supplementary budgets and the requirement for parliamentary approval ahead of any unbudgeted expenditure.
Though one of the key motivations for the establishment of social partnerships has been the need to reduce deficits and obtain economic growth, a social partnership is useful as a forum for ideas, discussion and consensus on national policies and programmes of all types. The Jamaica Debt Exchange programme of early 2010, while not implemented through the PFT, was a concrete expression of a successful social partnership that inarguably forestalled a fiscal, political and social crisis. The exchange of domestic bonds to longer-term, lower-yield bonds, agreed to in concert with the debt holders, saved the country some J$40 billion annually.
Most important, a social partnership can strengthen governance, as we saw in Jamaica in 2010. Jamaica's PFT - though it was not initially conceived as such - proved extremely effective as a check on what was perceived as the Government's inappropriate beha-viour. In the midst of the Dudus-Manatt scandal, the unions and private-sector groups refused to meet with the prime minister until their demands and questions were satisfactorily met. This, undoubtedly, increased the pressure on then PM Bruce Golding to resolve the issue (which, of course, he later did.)
The ball is now in the new administration's court to get Jamaica's social partnership process back in action. Now would be a good time, as it seeks to convince the electorate that it is making good on its campaign promises of greater transparency, accountability and consultation with the people.
And though the administration might have to make some concessions with regard to how it handles remedying the fiscal deficit, it would be more in its interest to reduce the conflict and increase the credibility of its upcoming policy decisions, gains that can only be achieved by working with its social partners.
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