Peter stands firm - Finance minister accepts that Government must prove its commitment to sound economic decisions

Published: Sunday | February 17, 2013 Comments 0
Finance Minister Peter Phillips
Finance Minister Peter Phillips

Arthur Hall, Senior News Editor

Finance Minister Peter Phillips, the stern face of the Government's mission to move the country away from financial disaster, accepts that there must be unflinching commitment to the task ahead.

Hours after crossing his first major hurdle in his quest to restore confidence in the economy and arrange the microeconomic variables to ensure growth, Phillips remains resolute.

"I was glad that I could have had the satisfaction of knowing that we have reached this hurdle and overcome this hurdle, but there are other hurdles to overcome and that is what I'm putting my mind to," said Phillips in reference to the signing of a staff-level agreement for a new International Monetary Fund (IMF) deal.

The next major hurdle for the Government comes this Thursday, which is the deadline for bond holders to sign on to the National Debt Exchange (NDX).

The financial sector has made no secret of the fact that it is not thrilled to be asked to make another debt-swap sacrifice, having supported the Jamaica Debt Exchange (JDX) three years ago.

"We supported (the JDX) as it would have reduced interest costs and given Jamaica the opportunity and fiscal space to place the economy on a growth path.

"However, the lack of implementation of structural reform as a result of a lack of transparency and an effective oversight body in place to monitor the programme lead to the desired objectives not being realised," said CEO of the JMMB Group, Keith Duncan, late last week as he announced that his group would support the NDX.

Held to account

Duncan's sentiment echoed several others in the financial sector and Phillips is well aware that his administration will be held to account even as it appears that NDX will get strong support.

"The concerns really have to do with them wanting evidence of the general determination of the Government to do the things necessary, like public-sector transformation, put in place a growth agenda and an investment programme which will ensure the success of the programme overall and ensure that we don't get to this point again."

"I have said publicly what are the things we are doing to ensure that the programme gets done," said Phillips.

According to Phillips, the public-sector modernisation programme will get a boost with the addition of a new technical and administrative level, and the Cabinet has already confirmed the first set of changes that are to be made.

"I accept and the Cabinet accepts that the entire programme can only work if we not just sign up but implement all of the elements that are necessary to make it a success."

The finance minister also admitted that an agreement with the public-sector bargaining groups is critical to the success of the economic programme and indicated an interest to have urgent dialogue with the unions.

"The threshold that we require under the (IMF) agreement will be satisfied. I'm confident of that," said Phillips as he committed the Government to avoid any widescale job cuts in the public sector even as it speeds up the implementation of the public-sector modernisation programme.

"Wage restraints is not layoffs; that is not what we are talking about. In fact, it is that tradeoff that we have put to the unions," Phillips declared.

According to Phillips, the Government growth strategy will include the modernisation of some sectors such as started in agriculture, and the additional benefits from areas such as infrastructural development and information, communication and technology.

"While more work to refine elements of that needs to be done and will be done, and is part of our understanding with the stakeholders ... I think we have spoken about the elements where we see the prospects for growth."

The financial sector has made no secret of the fact that it is not thrilled to be asked to make another debt-swap sacrifice, having supported the Jamaica Debt Exchange three years ago.

  • NDX offer closes Thursday
  • Unions to sign off on wage agreement
  • No public sector redundancy expected
  • New boost for public sector modernisation programme
  • Going for growth in agriculture, ICT, infrastructural development

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