Sun | Mar 24, 2019

Government must tell Jamaicans what to expect beyond austerity - Meeks

Published:Tuesday | February 18, 2014 | 12:00 AM
Finance and Planning Minister Dr Peter Phillips (left) speaks with Director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES), Professor Brian Meeks, at a public forum on 'Jamaica and the IMF' held at the UWI Mona Campus in Kingston on February 12, 2014. - Photo by Michael Shaw

McPherse Thompson, Assistant Business Editor

As the Government's tight fiscal policy bites, the incipient restlessness evident among trade unions may translate into action unless Jamaica experiences dramatic economic growth, UWI professor Brian Meeks has suggested.

By the same token, the opposition Jamaica Labour Party will be, and is already, trumpeting failure; and staying the course on the International Monetary Fund (IMF) agreement may be trumped by those calling for the release of the fiscal brakes in order to win the next election, said Meeks, director of the Sir Arthur Lewis Institute for Social and Economic Studies at UWI Mona.

"The response to avoid such a scenario must lie at the level of political leadership and new strategies of involvement, participation and compromise that could pre-empt such an outcome," he said last Wednesday at a forum on 'The socio-political consequences of the IMF Agreement', organised by the Ministry of Finance and UWI Department of Economics.

He noted that the stance of the parliamentary opposition was vital, saying agreement between the Government and the opposition political party on strategic medium-term objectives was critical to successful programmes.

"Now this is an extraordinarily difficult one because ... which opposition would want to neuter itself by conceding the right to oppose. But at the same time, for the success of any agreement in the mid-term, it is going to demand that a set of strategic objectives can span electoral regimes," said the professor.

He adds that the frontloading of the hardest conditionalities in the IMF programme was partly to ensure that when the next electoral cycle comes around, presumably, the worse would have gone and the benefits would have begun to show.

Not An Anancy Tactic

"This is not an anancy tactic. It is the tactic of any good political party that if you have difficult things to give to the people, you do them early in your electoral term ... ," he said.

Meeks added that more adjustments are likely and that the Government needs to outline its vision for the future.

"I, for one, don't think that the Government has painted a sufficiently vivid picture of what kind of society we want beyond austerity," he said. "And, of course, this has to be done against the reality that we are in this for the long haul, so it cannot be a Utopian picture that is divorced from reality."

Regarding other dangers to the IMF agreement, Meeks cited the government-trade union wage pact as being at more imminent risk.

Trade unions have agreed to wage restraints aimed at reducing the Government's wage bill to nine per cent of GDP by March 2016 as a condition of the IMF loan agreement. But Meeks said the arrangement is already subject to stress as workers - both blue collar and middle class - are facing inflationary pressures fed in particular by movements in the foreign exchange.

"I think this is the most important immediate stress and storm cloud on the horizon," said the SALISES director.

He noted that lower debt to GDP ratio can lead to a more buoyant economy, can give the Jamaican Government and people greater elbow room, greater increments of autonomy to chart policies beneficial to the overwhelming majority in education, health, social welfare and culture.

"This is the ultimate purpose behind the present moment. But too often it seems to be hidden in the obfuscating language of the technocracy," he said.

mcpherse.thompson@gleanerjm.com