Jamaica must reduce boastful spending to save economy
THE EDITOR, Sir:
TO DENY that we are now suffering the painful results of our largesse and government waste and corruption is to deny the facts that have guided our attitudes and opinions in regard to same.
Before the sale of Jamaica Public Service Co Ltd (JPS) to private interests as a means of filling a hole in the budget for that fiscal year (one of our many short-sighted moves!) - the organisation was a typical government-run entity - a feeding trough that created an atmosphere where wasteful spending and corrupt behaviour became the norm.
After the sale to private interests, the JPS was profitable in its first year, mainly because of raised rates on the consumer and tight fiscal constraints. Now, we, as a nation, are at the mercy of comparatively higher rates of electricity when compared to other nations with a similar energy-producing platform.
Corporations, by their very nature have to keep growing or they risk the wrath of their shareholders and, as a consequence, have to find a way to engineer this. The most convenient way of doing this is to raise rates at the consumer end, and this has consistently been the case, even through different ownerships.
So now The Gleaner is positing the mantra of less government and more fiscal responsibility. I am with you up to that point, but what happens to a society such as ours, where beyond agricultural products and the manufacturing which grows from that, and tourism, arguably our biggest income earner (reggae music generates hundreds of millions of US dollars a year), produces little else? What else do we produce, besides fast athletes, great food and beautiful fashion of all kinds? Not much.
LIVING TOO LARGE
Everyone knows that we have been living severely beyond our means and I would be the first to acknowledge that. Now that the realisation has taken root because of its reflection in our daily lives, we have to start making the necessary adjustments to the way we live - by reducing our personal debts and only purchasing necessities.
There is an economic downside to this: contraction of liquidity within the economy and the resultant spin-offs. However, I would argue that it has been the sale of the JPS that has seen the cost of electricity balloon nearly out of the reach of most low-income households and businesses. The cost of doing business in Jamaica is exorbitantly high. Are we going to put water in the same class - the class of an essential commodity that's barely affordable?
Some would say that we have little choice, what with the continuing debate regarding an agreement with the International Monetary Fund and given the state that we find ourselves in - almost all the money we earn is constitutionally bound to be repaid before any other payment is made.
You gentlemen at The Gleaner are suggesting a scenario that treads on dangerous territory. Granted, we will be free of the billions of albatross-sized dollars that we owe. How do you think a corporation or consortium of buyers would propose to quickly reverse that trend? Up the rates - and damn any inefficiencies - leaking water mains that cause the company millions in repairs and impact their bottomline would be ignored unless absolutely necessary. Any improvements would be cosmetic and designed to more easily separate consumers from the little money they earn after the taxes have been removed from it.
Public companies were essentially designed to run as NPOs (non-profit organisations), and any windfall would be put in a fund for any emergency-type scenarios - earthquakes and such. It is the waste and corruption that allow the bottomline of the NWC to look as it does. Tighter regulation, along with a modest increase in rates and a sliding scale increase during drought times, would give the NWC the shot in the arm it would need to grow out of its economic malaise.
Why is that seen as a tougher alternative than the one where we become more indebted - subjugated to the international banking technocrats and reduced to a situation in which we have no alternative but to succumb to the cost of business just to survive. Not many could survive in such conditions.