Editorial - The PM's obligation

Later this week, the People's National Party (PNP), which has been back in office for nearly nine months, will hold its annual conference. It should use the occasion to clarify, bring coherence to, and put political muscle behind an economic agenda.

We, of course, will be told that such an agenda has already been defined - tax, pension and public-sector reform - and laid out by the finance minister, Dr Peter Phillips.

Perhaps!

But up to now, this project, insofar as most Jamaicans can tell, is largely ethereal, ephemeral even. It lacks substance and specifics - what, when, where, how. Certainly, there has been insufficient communication with the Jamaican people about what will be required of them.

The point is that the reforms the Government has spoken about ought not to be policy abstractions. They should be really a means to the end of fiscal stability, economic growth and the creation of jobs.

That starts with bringing under control the country's debt of J$1.7 trillion, or a Greek-style 140 per cent of GDP. While the debt-to-GDP ratio is frightening, the grimmer tale is the amount of the Government's budget - near 60 per cent - that goes to service the debt.

For the current fiscal year, that bill translates to J$334.7 billion which, after it is paid, will leave enough cash from the Government's non-borrowing revenue to cover a mere 18 per cent of the public-sector wage bill, excluding pension obligations.

As former US president Bill Clinton might advise Jamaica's finance ministry, the policy options rest in the arithmetic. The numbers don't add up.

unsustainable

Further, not only is a debt of this magnitude unsustainable, but servicing it siphons public-sector investment from other critical segments of the economy or from the provision of services, like education, health care and security.

The Government can begin to fix the problem by spending less and saving and earning more, or, more realistically, a combination of the three.

But these choices are not easy. Nor are they without pain. That pain, however, is likely to be more bearable if you start early, end quickly and people are convinced that their sacrifices will lead to returns.

Herein lies the failure of the PNP Government. Its reform plan remains sketchy and the public has been called on to buy into nothing. Of course, we note that a public-sector wage bill of near 12 per cent of GDP can't be sustained. Nor can an unfunded annual pension bill of $20 billion. Nor a tax system that is not only inefficient but affords arbitrary, non-transparent powers to ministers. White Papers on these projects remain in gestation and there is a growing sense of economic drift, which weakens confidence.

Part of the problem, we suspect, is that the governing party and its administration have got themselves into such a populist twist that they are fearful to talk frankly to Jamaicans about the sacrifices they will have to make. Communicating the requirements is not merely an economic discussion that is the preserve of the finance ministry. It is also a big political discourse that demands that the governing party's most able communicator speaks to the larger constituency that must be reached about the necessity for reform.

That person is Portia Simpson Miller, the PNP's leader and prime minister. It is really her obligation.

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