EDITORIAL - Mrs Simpson Miller's opportunity
NEARLY FIVE months ago, Jamaican voters gave Portia Simpson Miller an opportunity at vindication - to demonstrate not only that she wins elections, but is capable of the transformational leadership necessary to lift Jamaica to new tiers of development.
Mrs Simpson Miller, president of the People's National Party and prime minister of Jamaica, will begin the serious answer to this profound question today. To paraphrase the biblical story of Esau and Jacob, she will speak through the voice of Peter Phillips.
Dr Phillips is the finance minister in Mrs Simpson Miller's government. He will outline in Parliament how he intends to finance the Government's $612.4-billion Budget for the fiscal year.
This is not an easy job. It is to be accomplished in the context of a government debt of nearly $1.7 trillion, or 131 per cent of national output. That debt is unsustainable. Its servicing will this year consume 53 per cent of government expenditure. The debt is the largest single drag on growth in the economy.
Jamaica has to tackle the problem of its debt against the backdrop of a sluggish global economy, made especially vulnerable by the crisis-riddled Eurozone countries. Indeed, Mrs Simpson Miller has had an eye on Europe, especially Greece, as she indicated earlier this year when she mused over the possibility of Jamaica receiving a Greek-style bailout. Hopefully, she has kept it there, with consistent glances at the other PIIGS (Portugal, Italy, Ireland, Greece and Spain).
If she has, Mrs Simpson Miller will, hopefully, have absorbed critical lessons from Greece, part of which we expect to be articulated by Dr Phillips with the fiscal programme he outlines today, and later on by the PM herself.
The first of these, which may seem counter-intuitive to Mrs Simpson Miller's more populist supporters, is that Jamaica must not follow the Greeks. In other words, the administration should act now, rather than, like the Greeks did and Jamaican administrations have previously done, dither over the tough actions necessary to fix the economy. In this regard, there are some facts to note: the Jamaican dollar is no reserve currency, allowing us to borrow on the cheap; neither is it part of a monetary union, where the fear of contagion impels other members towards a bailout.
Time to recover
Of course, Mrs Simpson Miller will perceive political risks in pursuing tight fiscal measures. But she need not be overly worried about the outcomes of recent elections in Spain, Portugal, Greece and France where incumbents either lost ground or were voted out of office. Her party, having recently been voted in, has time to do the difficult stuff and recover.
Having previously tabled a flat expenditure package, we expect Dr Phillips to signal an aggressive programme of tax reform, including a robust programme of enforcement and a sharp shift away from waivers and exemptions, as well as a finely targeted safety net for the poor, rather than a wasteful, scatter-shot approach to the delivery of subsidies. The Government must also be prepared to move swiftly on public-sector and pension reforms.
But these can't be Dr Phillips' programme, for no one has the political capital of, or is more capable of articulating them with credibility than Mrs Simpson Miller. And she can expect a return. Should she fail to grasp the initiative, she might well forfeit a place in the pantheon of the great.
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