One of the sharpest, most scintillating and intellectually stimulating analyses of the crisis facing Jamaica that I have seen was given by former Prime Minister Bruce Golding in his New York Caribbean International Network (CIN) lecture recently.
If we ever needed any reminder that we can't afford to lose this fine intellect from the public square, that penetrating and poignant lecture provided it. Bruce Golding has a way of communicating profound truths in the clearest of ways. And he generally has a scorn for simplistic analysis, and this aversion was amply demonstrated in that lecture. Golding, for one, was very lucid about the limitation of this International Monetary Fund (IMF) path we are on, while articulating why we had to have an IMF agreement.
Golding was unequivocal: "I caution against the belief held by many and, indeed, articulated by the stipulated agencies that if we stick to our guns and are able to meet all the stipulated commitments, we will finally be on the road to recovery and sustained growth. It is contended that fiscal consolidation, which essentially means cutting spending and increasing revenue collections and a targeted-debt reduction programme, will put us in good stead for economic growth in the medium to long term."
I have, for long, been making this exact point, emphasising the limitations of the neo-liberal model.
Finance Minister Peter Phillips has done an excellent job in selling the necessity and, indeed, inevitability of an IMF programme. His arguments are flawless. But his and the Bank of Jamaica governor's optimism about the pay-offs of this path, and their bullishness about the light at the end of this IMF tunnel, I find too hasty.
We need to interrogate the growth assumptions of the IMF programme. We have to bring more critical, nuanced reasoning to our economic discourse. Now that Bruce is out of the political fray - and 'ray-ray', he can reason even more soberly - though even when he was in the cut and trust of political activity, I found him generally well reasoned and rational.
In that CIN lecture, he singled out the 7.5% primary surplus target, as well as the targets to eliminate the fiscal deficit within two years and the plan to reduce our national debt from 140% to 96% within six years of the programme. But, said Golding: "The difficulty with this construct is that it has internal contradictions that, while they cannot be eliminated, must be countered if the programme is to be successful. Put another way, the conditions imposed by themselves could be impediments to investment and growth."
Golding pointed out that when a government's expenditure is so constricted that it can't provide resources to effectively tackle crime and violence, maintain and develop infrastructure and deal with education and training, job creation and growth will be "but a fleeting illusion". He was quick to add that "this is not a criticism of the Government. It had very little room in which to wiggle".
And this is precisely the kind of recognition which must undergird all our discussion on the Jamaican economy. This is what is lost in our ray-ray politics and our meaningless chatter masquerading as economic dialogue in Jamaica.
This People's National Party Government, as the previous Jamaica Labour Party (JLP) administration and any other to come, has very little wiggle room. Whether delegates elect Andrew Holness or Audley Shaw, the same binding constraints will face the victor and those delegates foolish enough to believe Audley that it's only because Peter Phillips and Omar Davies don't know how to run a capitalist economy why we are having problems will be wringing their hands in disillusionment later.
It's time we have some intelligent discourse on the economy. Bruce Golding gave us a sumptuous treat in that lecture recently. Listen to him: "What we are required to do under the IMF agreement is necessary, though it is not sufficient; for while it speaks to conditions necessary for growth, it does not embody the proactive steps to stimulate growth."
This point I have made over and over in these columns. In fact, I have criticised Mr Golding himself for too carelessly adopting this minimalist, non-interventionist state view, with his repetition of Ronald Reagan's famous line, "Government is not the solution. Government is the problem."
Those "proactive steps" required to stimulate growth represent Government action, Mr Golding. I am glad he is smelling the coffee more clearly now that he has more time to think, read and reflect. Hear Mr Golding again: "The challenge facing the Government, therefore, and indeed all of us, is not just passing quarterly quantitative IMF tests, but (and indeed in order to do that) how to generate growth while pursuing a constrictive, 'growth-passive' fiscal policy as required under the agreement ... . We have to go beyond the IMF programme. We have to be not just IMF-compliant but IMF-plus." Brilliant point!
RAISED THE BAR
This is the discussion we need to have on our shores. Bruce Golding has raised the bar of discourse considerably, as he is so eminently gifted to do. I heard a senior journalist bemoaning recently how many business people and others were weeping and wailing when we didn't have an IMF agreement, and now, they are weeping and wailing because we have one! That journalist and others like him should have seen that the IMF terms themselves are constrictive, fiscally repressive and demand-depressive.
What is happening with the dollar, with prices, with incentive programmes, with depressed demand, reduced consumer spending, etc., is all part of the IMF plan. Omar Azan needs to understand this and stop the bawling. Our media people should have been telling our business sector and the Jamaican people what to expect from an IMF programme.
Mr Shaw, on 'Impact' last Thursday night, sharply criticised Peter Phillips for raising taxes in areas where he had decreased them and for adding burdens on business where he had released them.
If Peter Phillips did not do that, how could we achieve our primary surplus target and achieve other IMF targets? How can we sustain our IMF programme if we do things which Shaw did when he tossed aside the IMF programme? We want to eat our cake and still have it! That's madness!
I am with government spokes-persons when they dismiss silly arguments about a non-IMF path and when they show that fiscal discipline is crucial. But they need to be more realistic in letting people appreciate the real dilemmas we face. Audley Shaw has shown greater scepticism of IMF policies and programmes than Andrew Holness, who has been too much of a True Believer in neo-liberal economics.
Audley, while he has not articulated it in the intellectually crisp way Golding has, is aware of the serious limitations of IMF approaches. He was excellent in his Budget presentation this year and in his critiques earlier in the year on the IMF programme. We need more critical analysis of IMF policies (The October 12-18 issue of The Economist has a cover feature on globalisation showing IMF policy zig-zags).
Bruce Golding has a way with words: "The IMF targets are one wheel of the bicycle." After enumerating five binding constraints - education, energy, infrastructure, crime and violence, and bureaucracy - he said, "These constitute the other wheel that we must have if we are to move forward instead of just balancing on one wheel."
Golding made it abundantly clear that we have to take our bitter medicine. What he is proposing would be "distinctly unpopular", but he was equally clear: "No one has yet enunciated a credible alternative." He added: "We have to bite the bullet - now!" And clearing the deck will not "come about by simply sticking to the IMF agreement". Golding's lecture should be shown all over Jamaica. There should be discussion groups around it. The two political parties should have their party workers study it.
EXTRAORDINARY ALL ROUND
But I must wake up! This is Ray-Ray Land, where we create messiahs - and crucify them. And now, we come to another crucial point Golding made: The country needs both extraordinary leadership and extraordinary followership. "That extraordinary leadership has to come from both political parties - Portia and Andrew or Audley - whoever emerges from the current leadership contest. Because only then will we ensure that the cantankerousness of our politics does not become the most binding of all constraints to our hopes for a brighter future."
He then made this extraordinarily important point about us, the people - the followership: If Jamaica is to grow, it will have to experience "even greater pain". This, Golding said, required "extraordinary followership - one that will recognise and eschew glib political rhetoric that we politicians offer in place of the unvarnished reality of our predicament and the imperatives we embrace. People cannot be fooled unless they allow themselves to be fooled. They have too much access to information that enables them to sift sense from nonsense, the wheat from the chaff."
You are asking people to read, Mr Golding? Who has time for that? And are our media properly digesting these issues so they can enlighten the people? Isn't ray-ray commentary and bar-talk journalism also a hot item in Jamaica?
People have to stop preferring myths and empty promises over stark, inconvenient truths. Many JLP delegates preparing for this leadership contest are consumed by who can best "tek it to Portia" and put back the JLP in power; not thinking that no Jamaican Government can completely 'tek it to the IMF'. Golding seeks a Jamaica "where followership will abandon its yearning for messiahs - godlike figures that will put us on their backs and take us to the promised land. The Government must be bold enough to take the tough decisions it considers necessary and ... get on with it." But populism rebels against that realism.
The pity is that despite his commanding and arresting lecture, people will be more interested in discussing the ghosts of his past and his role with Dudus than fixing their minds on his surgically identified issues.
Boyne is a veteran journalist. Email feedback to email@example.com