On the face of it, Wednesday's wage restraint agreement between the Government and some public-sector unions was a significant step by the Simpson Miller administration towards concluding an economic support agreement with the International Monetary Fund (IMF).

But it is not a done deal. There is still substantial room for slippage.

The problem is that unions representing such groups as the police, teachers, doctors and nurses have not yet signed the agreement, by whose terms they are to be bound. An absence of deftness and skill on the part of government negotiators, and good sense all round, could mean the whole thing could fall apart. That would be bad for Jamaica.

The wage deal, we remind, is aimed at lowering the public-sector wage bill from nearly 12 per cent to around nine per cent of gross domestic product (GDP), over the next three years. It is part of a programme to reduce the public debt, now at an unmanageable 140 per cent of GDP.

An alternative to a freeze on basic wages would be to cut several thousand public-sector jobs. But the Government believes that this would be politically - and socially - too costly.

There are obstacles for the Government to navigate.

The IMF had a staff-level agreement with the Government on the prior actions to be completed before it signs off on a US$750-million loan and, more important, provides Jamaica with an imprimatur that will unlock financing from other multilateral financial institutions.

Timing is important here. Jamaica's domestic undertakings have to be completed soon if the agreement is go before the IMF's executive board this month for ratification. Further, Jamaica's new fiscal year begins in April, and an absence of an agreement with the Fund will cause a funding gap in the Government's Budget, which would exacerbate the problem of uncertainty and low economic confidence.

That several unions have embraced the wage agreement, on the face of it, strengthens the Government's hand - or at least places moral pressure on any perceived hold-outs to come aboard.

Not fully engaged

But there are two significant points to be noted here. First is the claim by the leaders of some of these unions that they are yet to be fully engaged by the administration. When they are, they have to consult, in accordance with the requirements of their constitutions, before arriving at a position. They could, therefore, not be blamed for any delays in the Government's timetable.

More critical, though, is the fact that the police, teachers and doctors are not in those segments of the public sector deemed to be bloated, or from which Jamaica could afford an exodus, although their options outside the public sector, even abroad, may, at this time, be limited.

The larger point here is that Wednesday's agreement is supposed to "apply to all remuneration under contract of employment for any kind of work to be performed in the public sector of Jamaica". This presumably includes those categories that are not yet aboard, which are the ones with the most elbow room. They could be spoilers.

We expect, however, they will appreciate the crisis facing Jamaica and that the Government - if it has not already done so, which would be scandalous - urgently engage them in serious and frank dialogue.

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