Ian Boyne, Contributor
The only real debate which can exist vis-à-vis the Government's $16-billion tax package and debt-exchange programme is whether there is a viable alternative to an agreement with the International Monetary Fund (IMF). Any other debate - certainly any engaged in by the Opposition Jamaica Labour Party (JLP) - is totally pointless and hypocritical.
I increasingly despair of public debate in Jamaica. It is too puerile, facile and obnoxiously partisan. It is usually an affront to reason and often to even common sense. We have been pressing the Government to quickly conclude a deal with the IMF. Every day, every week, every month.
The Government has apparently been bargaining hard, fighting to get its points across and to broker a deal the Jamaican people can live with. While it has been doing so, the dollar has been slipping, the net international reserves depleting, and business confidence tumbling. People have been adopting a wait-and-see attitude and workers have been worried.
Deal in sight
The Government can't negotiate forever. It has to come to a deal (which appears in sight with a staff-level endorsement last Friday, with hope for ratification by the IMF board in March). It has been 13 months. So after all its huffing and puffing, and Finance Minister Peter Phillips' sounding off about sovereignty recently, he has to face the IMF tune. And either we decide to dance to it or get out of the people's session!
We all know what an IMF agreement entails. Its "bitter medicine", as Opposition Leader Andrew Holness told us in 2011. He was frank with us. He told us we had been living beyond our means, chalking up debts which were unsustainable and an albatross. I have his speeches. They have articulately made the case for the necessity of painful adjustment. Bitter medicine.
Holness, champion of new-generation toughness and no-nonsense boldness, has continued to speak eloquently about the need for austerity; for us to break with our profligate past. Holness has never countenanced arguments about a painless, non-IMF. He has talked incessantly of the need for painful adjustment; of our courageously facing the hard decisions and taking them in our children's interest.In January, the finance minister finally gave us some concrete indication that new taxes were coming. He revealed that the already stringent doubling in one year of our primary surplus from 3-6% (which was still unachieved) would move further to 7.5% of GDP. This was a demand of the IMF. That had become non-negotiable. So he told us clearly we should expect "prior action" taxes before any IMF agreement. So we knew that if tax measures constituted part of the "prior actions" of the IMF, there had to be new taxes before April.
Yet the taxes are announced and people are shocked. Stunned. Like they came as a bolt of lightning, or that meteor shower in Russia from nowhere. Okay, Peter Phillips could have told the private sector and the Opposition that they were going to be announced without specifying what they were. In a crisis, relationships have be to be managed delicately, sensitively. People have to feel you respect, honour and trust them. And because unity is needed and cooperation imperative, everything should be done to foster confidence. Some say the minister could give a 'prips' to the stakeholders and to the public in general in that Monday night national broadcast done with the prime minister.
Can't be avoided
After all, it was the same Peter Phillips who, as CVM reminded us last Wednesday, had described an opposition member as "Nicodemus" regarding the way in which finance ministers imposed tax increases without consultation. But, hey, whether the prime minister told us two weeks or two days before the taxes were announced, the fact is they can't be avoided if we are going the IMF route.
That's why the only real debate is whether we go this IMF route or not. In my view, the only people who can legitimately and reasonably have an argument with the measures announced last week are people like Ronnie Mason of Nationwide, on the Right; and Lloyd D'Aguilar and Paul Ward of the Left, who believe there is a viable non-IMF path.
Holness and the JLP, who have never talked about a non-IMF path and who have always said we should drastically reduce our debt, would have to submit to the same demands of the IMF. One can argue about what was taxed to satisfy the overall IMF demands, but with Hobson's choice, I think the Government has done a good spread. If the $11 billion per year was not found from the National Housing Trust, it would have to be found somewhere else, more likely in more immediately painful ways to the poor. Tax on lotto, telecommunications, dividends, customs duties, property and for education seem eminently defensible to me - if we must go this IMF route. We are not calling the shots ultimately. This reality must sink in this our 51st year of our "Independence".
That the Government has been able to rally support for a second debt exchange is to its credit. Yes, it's undesirable and is bitter medicine, but Peter Phillips was excellent and at his best in terms of argumentation and logic in his briefing with journalists last Thursday at Jamaica House. He admitted that these measures represented a choice between "the difficult and the more difficult" and "the bad and the worse". He talked about being realistic and "understanding the real world".
It would be desirable, Phillips conceded, to pursue a stimulus approach and to engage in expansionary policies. Peering into his audience where this Keynesian columnist sat, he said, "I am more Keynesian than others." But, he said, he was a realist and he understood his constraints.
I want to see a debate between Audley Shaw and Peter Phillips on economic strategy. The media must arrange it. Not less than one hour and preferably an hour and a half. Have a senior, informed journalist put the hard questions to them. Let us see how the pain and grief of these measures could be avoided. Make no mistake: The poor are going to feel it bitterly.
If the Government had rushed this IMF deal, one could suspect that it didn't fight hard enough and just gave in to unreasonable IMF demands. But it has been one year of back and forth, toing and froing. The Jamaican people have got fed up with the wait. They have been clamouring for a deal now. Well, you are about to have it, for the bold tough decisions have been taken to deal with our debt.
Urged to bite bullet
This newspaper has, for a number of months in editorial after editorial, been urging the Government to bite the bullet, take the tough decisions and not pander to populist sentiments. The paper has asked for the prime minister to stand beside her finance minister and tell the nation she is for austere measures. She did so last Monday night, literally.
The Government has taken the tough decisions as it has been urged by The Gleaner and the Opposition. But now the JLP is bawling. That's why I remain a political agnostic, and could never be committed to any political party, for I can't stand the hypocrisy. Like the hypocrisy of the People's National Party (PNP) commentators and other tribalists who lashed the JLP when it introduced the Jamaica Debt Exchange, saying it was a default and disgraceful; that it would rape the pensioners; yet they are silent now, when other Comrades applaud. PNP spokespersons used to talk about Golding's "wicked tax package", yet in just one year multiple tens of billions in taxes have been imposed by the PNP.
Peter Phillips was very clear last Thursday in his briefing. He was saying to us, in effect, "Brethren, IMF run things. If we want dem money, we have to do certain things. Take it or leave it." Those who say leave it can have a meaningful debate on the tax measures, but those who say we have to pay down the debt and make that a priority can't quibble with these measures.
I don't like these measures. I have been hit from many angles with them. My savings have been plundered. I resent it. But the JLP would be following this same IMF path, and if you are foolish or naïve enough to believe that the Labourites have better talkers and samfie men to fool up the IMF to give us a better deal, I have a piece of property to sell you at King's House!
Chris Tufton had a well-reasoned op-ed in last week's The Sunday Gleaner ('Jitters of uncertainty as the IMF comes to town'). He wrote: "If the Government decides not to accept the terms that would lead to an agreement, the country would have to face an even more painful, some may even argue impossible, set of choices ... . This would likely mean massive cuts in public expenditure, in critical social services like education and health, and printing money - both options being disastrous to contemplate. Again, the Simpson Miler Government would quickly realise that under this scenario, the poor and vulnerable would suffer most. A no-IMF option is an unlikely option at this point."
But that's not sexy on the campaign trail. You can't inflame people's passions with that. You can't intellectualise and reason from party platforms. You must pander to the base, talk about "this wicked and uncaring Government" (as the PNP used to do in Opposition), raise hell about what these things will do to poor people.
My disappointment in Andrew Holness is that I have such a high regard for him and his intellect. Holness knows better. He could really be new and different. But the moment is too pregnant with political opportunity to squander it on political unity and nation-building.
Andrew, Portia, Audley and Peter should be holding town hall meetings around Jamaica to tell our people why we have to go this route, or else. But I have to wake up. This is Jamaica. It's politics I am writing about. Labourites remember how Comrades exploited their crisis under Bruce Golding. And Holness dare not be different. Same old politics.
Ian Boyne is a
veteran journalist. Email feedback to firstname.lastname@example.org and