Joan Grant Cummings & Judy Wedderburn, Guest Columnists
Many Jamaicans are waiting to exhale over the outcome of the International Monetary Fund (IMF) negotiations. But many of us have decided that now is the time for action to effect long-term solutions to our economic and social development problems.
We see opportunity in this seeming chaos. We recognise that within the current alignment of issues, there lies the possibility to flip things.
A priceless boon of the times is the maturing of Jamaica's civil-society movement. For despite our multiple backgrounds that span different identities we claim in terms of our culture, race, social class, age, education and economic background, gender, sexuality, ability/disability, we seem to be exhibiting a true example of our motto - 'Out Of Many, One People'.
As we listen to the views being expressed by Jamaicans in every space, several things become apparent: chief is people's thirst for knowledge and understanding of the issues. People want to contribute to the dialogue. Jamaicans have real questions and real solutions. Children ask: "What/Who is the IMF really?" Their parents want to know: "Is how we wrack up dis damn debt, eeh? Some answer: "Is de politician dem!" Others: "No! Is de 21 families?"
Others want to know if we can ask de contractor general a who 'tief' de money? What de government an de Big Man dem really doing? What Obama can do fe help we out? What is dis ECONOMY anyway?
Just as we lobby our governments to enact evidence-based policies, we need to engage this issue of our economy based on our lived and learned experiences as well as our 'classroom' learning. We need to become the 'experts' on our economy and development, not only the 'victims' or the 'vulnerable'.
Important research from the South Centre - an independent intergovernmental policy think tank of developing countries, with observer status at the UN, that principally supports South-South cooperation - and the United Nations Conference on Trade and Development (UNCTAD) have concluded that developing countries are more greatly affected by external shocks encountered in the global economy.
Within the current international trading regime, we are at great disadvantage and have ended up being open to greater risk from the boom and busts in the global economy. As a result, we feel the instability in global markets more, experience great volatility of our currency value, experience fluctuating interest rates in addition to the effect of extreme weather conditions and other disasters,
However, as a sovereign nation, we have the right to: prioritise how we will grow our economy; our terms of engagement with the global trading systems; prioritise spending on services and support to the most vulnerable in our society - especially women, children, people with disabilities, rural folk, and other groups. Our Government needs to remember this.
THE IMF - HELP OR HINDRANCE?
The recent retreat from which the GOJ emanated gave us half of the story that Jamaicans needed to hear. While the Government seemed forceful about some issues, the sense that 'ordinary' Jamaicans mattered in the process was not an overwhelming one. Jamaicans are asking to be included and to actively participate in the process.
We want our Government to fully level with us. Is the IMF our only way out? What are the viable alternatives? We want to 'go there' in the discussions. After much thought, sections of the population have come to the conclusion that the IMF deal is at best a stopgap, and at the other spectrum, dead on arrival.
If one reads Article 1.2 of the Articles of Agreement of the IMF, it reveals that the Fund's intention is:
"To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of ALL members as the primary objective of economic policy."
Yet it is most likely that with an IMF agreement, we will end up wringing out of Jamaicans, especially the poor, what's left of their dwindling resources. The IMF is most likely to demand a regime of aggressive debt payment; a cut in social spending; reduction of real wages; increased tax for some - usually the contracted middle class, PAYE payers. It's doubtful we will see growth and job creation.
The IMF may not be our best partner if we expect to balance peoples' lives in our Budget. Even if we do go with the IMF, our Government, private sector, and civil society cannot assume a posture of business as usual. There must be consensus on the way forward that includes a programme of work to grow our domestic economy and our productivity.
An audit of the public debt is needed to inform the country as to how the debt was wracked up! Not to assign blame but so we do not 'buck our toe' on the same stone yet again.
We know that like Greece, in Jamaica, there has been socialisation of the debt (Government has assumed a lot of the private sector's debt). Going forward, should we impose conditionalities on entities that the GOJ acts as guarantors for?
We need to have real public debate about: the merits of toughing it out with an IMF deal versus defaulting/debt restructuring and cancellation. What are the implications of each? People need to know.
And what of our domestic economy, and the real economy powered by people, not paper? China, one of the few countries that have benefited from international trade, is indicating that the best route to continued growth in their economy is strengthening their domestic economy. We need to discuss domestic resource mobilisation and having a domestic-driven economy that includes savings; investment; and productivity of labour and capital.
This would necessitate a real responsiveness and responsibility by the Government, private sector and the wider civil society, including students, low-income workers, women, children and youth, the poor, and especially rural folk.
The fact is, nothing can be taken off the table!
We need to study the cases of Argentina, Iceland and, more recently, Cuba, where all-island consultations were held as to whether to go with the IMF or not. Eight million of 11 million people participated in the many discussions in schools, community centres, workplaces, etc. We are only 2.7 million people. What happened to our code on public consultations?
Government must exhibit the leadership in the process to bring together the different groups in the society so that they can make an informed, reflective and democratically formulated plan of action towards our economic survival. The real economy, after all, has at its core the people and our natural resources.
THE FUTURE WE REALLY WANT
The IMF we know is not the only challenge we face. The global economy expects to experience food, water and energy crises. Employment is expected to take another five years to start growing again. The International Labour Organisation has indicated that up to 2012, we have lost about 210 million jobs globally because of the financial crisis. We still have to contend with climate change and other fiscal battles looming.
In addition, the violation of people's human rights, in particular violence against women and children, is growing, as well as other citizen-security issues. These are all interdependent issues.
As researchers at the South Centre and UNCTAD have pointed out, there is a gap in the global financial architecture as it pertains to positively assisting and supporting countries, in particular developing countries experiencing debt crises. There is no real resolution mechanism.
Based on their review of the work of the IMF, they have also concluded that the IMF is acting in a conflict of interest in relation to its articles of agreement. They advance that countries confronting a debt crisis need the assistance and support of a supranational, impartial body that assists nations to: in a timely, pre-emptive manner, work on debt restructuring; promote pro-growth interim measures, with a timeline, such as financially assisting debtors to grow out of debt distress; develop a mechanism that is fair to creditors and debtors.
In other words, a body that advances a predictable, equitable, non-arbitrary approach. UNCTAD is also promoting four key reforms to the international system as well as developed 'Principles for Responsible Sovereign lending and borrowing in Debt Resolution'.
We need to embark on a path of greater productivity and successful economic diversification. We do not lack regional economic giants to assist us, either nationally or regionally. Jamaica is a member state of the South Centre and UNCTAD. Effectively, we supported the research and outcome actions! Recommended!
At the last global conference on climate change, governments named the outcome document the 'Future We Want'. I encourage Jamaicans to read this document, too, and ask, is it really the future WE want?
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