Many Jamaicans facing tight incomes, unpaid bills
Aubyn Hill, Financial Gleaner Columnist
THOSE WHO speak on the economy from both government and the private sector use the macroeconomic numbers to paint an economy that is improving beyond expectation, even a rosy picture.
They conjure up a future that is bright based on the recent past, and of Jamaica passing five quarters of International Monetary Fund (IMF) tests under the Extended Fund Facility agreement we signed with the IMF.
The positive numbers are these. The country's current-account deficit as a percentage of gross domestic product (GDP) improved from 11.5 per cent to 8.8 per cent between March 2013 and the same month in 2014. During the same period, the net international reserves (NIR) grew from a near-low of US$884 million to US$1.376 billion, and at the end of July this year the NIR had crossed US$2 billion with the injection of new borrowed funds of US$800 million.
The debt-to-GDP figure is moving down slowly and the all-important (to the IMF) primary surplus has moved from $72.3 billion last year to $111 billion this March, thereby meeting the 7.5 per cent target. It must grow to about $120 billion at the end of this fiscal year to maintain that almost sacrosanct 7.5 per cent ratio.
Many of the hearers of this repeated and good macroeconomic performance wonder in which foreign IMF territory these good things are occurring because they simply cannot feel any of these good effects in their wallets, supermarket baskets, taxi or bus fares, or in physician or dental charges.
In fact, they feel the exact opposite in higher prices which lead to fewer goods and services that they can purchase. Indeed, all many feel every day is real pain of no cash available even to buy food and basic necessities.
'CAN'T BUY FOOD'
One of the companies whose board I chair has a unit that focuses on collecting its own and selected other companies' receivables from ordinary Jamaican clients and borrowers.
A couple of days ago, the manager of the company told me of a conversation she had with a man who is delinquent in his payments. He told her he took the call although he knew who she was and what she would be calling about - sometimes multiple phones have to be employed to mask the number from an evasive debtor - because he wanted to speak to her.
He explained that he is in the car-duco business. He said his business is so slow these days that he is lucky to get one customer for the week. He confessed that his JPS electricity bills have not been paid for a while and considered it providential that his electricity has not been cut off.
He is unable to sleep at nights just wondering how he is going to survive and how long his understanding and gracious girlfriend is going to stay with him.
The most poignant part of his story was related to food. He painfully conveyed that some days he is unable to eat because he has no cash to buy a meal. The man who was without food was honourable and willing to pay his debts; he simply did not have the means to pay at this time.
The repeated macroeconomic numbers and IMF tests passed for the last five quarters meant 'didley squat' to him and had no bearing - except possibly a negative one - on his ability to eat.
GROWTH AGENDA CONVERTS
Good macroeconomic numbers without growth spells disaster.
I detect a stirring to give some focus on growth among our political rulers and their private-sector partners. Calls for this focus were disregarded before.
If disregard is the wrong word then, for sure, economic growth was outside the scope of consideration during and long after the negotiations with the IMF were completed.
Those of us who were clear and consistent in our call for, in my case as early as December 2012, a minister of knowledge and economic growth, were either ignored, told to go and study and send better particulars, or accused of seeking to effect cosmetic and meaningless Cabinet changes.
The fact that Jamaica had never really focused on economic growth in most of its five decades ofindependence was lost on most of these folks.
With that kind of no-growth historical
focus, these detractors couldn't see that they were the ones in 'la-la
land' if they continued to expect that the essentially contractionary
IMF programme was going to produce any growth without a prime
ministerial-empowered economic growth minister.
believe the reality of impending disaster, were we to continue accepting
growth within the statistical-error range, is beginning to sink into
some important policymakers and business practitioners'
The fact that international news agencies
revived talk of the risk of Jamaica's debt default, in spite of our good
reception of the US$800 million bond, is a wake-up call. It is a timely
reminder of how important it is for the Government to fix its
inefficient self and take the policy decisions which will facilitate
growth and engender confidence in local and foreign investors to
re-enter the Jamaican economy.
My desire for this
growth to occur is to help so many Jamaicans, like the borrower
mentioned above, to get sustainable jobs that will provide income to buy
food, pay down their debts and keep their mortgages current so that
they do not lose their single most valuable investment - their
Aubyn Hill is CEO of Corporate Strategies and
chairman of the Opposition Leader's Economic Advisory Council.Email: