Neither Peter Phillips, the finance minister, nor Brian Wynter, the governor of the central bank, is likely to have been enamoured with Aubyn Hill's column in last Friday's Financial Gleaner.
Their major concern, we expect, would be that Mr Hill's arguments, in the midst of Jamaica's negotiations with the International Monetary Fund (IMF), might cause jitters in the financial markets, domestic and external, placing greater stress on the Jamaican dollar.
Aubyn Hill's central thesis is that with a crisis-riddled economy, exemplified by a public debt of J$1.7 trillion, or 140 per cent of GDP, Dr Phillips can choose from two difficult options:
(a) He can propose that Jamaica follow Belize in an outright default on its debt; or
(b) Rather than using the country's limited foreign reserves to shore up the Jamaican dollar, he can allow a sharper and deeper devaluation of the currency.
Of the two options, Mr Hill, a banker, seems to favour the first the least. For it would wipe out vast chunks of the balance sheets of domestic banks and other financial institutions that are heavily invested in government bonds. The upshot would be great pain to savers and pension investors.
Dr Phillips, however, has repeatedly ruled out the devaluation tool, telling this newspaper in August that not only would it severely and extensively damage the health of the domestic financial system, but freeze Jamaica out of foreign financial markets.
At the same time, Mr Wynter is not in favour of a precipitous devaluation of the currency. Indeed, in the June quarter, the Bank of Jamaica spent a net US$134 million to prop up the Jamaican dollar, and Mr Wynter has declared that he has the resources, and the will, to iron out market bumps and defend the currency against speculators.
Dilemma facing Government
All this notwithstanding, Aubyn Hill's observations highlight the dilemma facing Dr Phillips and the Government, giving credence to his call for a robust debate of the issues.
We, however, do not believe that his discourse ought to be limited in scope to devaluation or default. For, there may be other options which, if grasped and implemented, may, even at this late stage, save us from either extreme.
Many of the things we refer to are now the subject of negotiations with the IMF, such as fiscal targets and public-sector, pension and tax reform. The point we make is that Jamaica could very well decide to be more aggressive in cutting its fiscal deficit for this fiscal year more than the 3.8 per cent of GDP now projected. Or it might want to run a primary balance higher than six per cent.
But doing such things, while implementing policies to fire up private-sector investment to offset the public-sector fallout and drive growth, will demand tough economic decisions. But the Government has to be cohesive and its policies coherent. And it has to be energised to sell them.
The process, therefore, is not merely economic but demands a high level of political communication. In this administration, by far the best communicator with the majority of people is Prime Minister Portia Simpson Miller.
It is her obligation to lead the process - which is beyond touching on the issues in the occasional speech - but mass mobilisation. Unless we are resigned to either drift aimlessly, or call either of Mr Hill's scenarios into play.
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