Tue | Sep 25, 2018

EDITORIAL - An economic dilemma

Published:Tuesday | October 7, 2014 | 12:00 AM

Andrew Holness and his Jamaica Labour Party (JLP) should take no particular comfort in the findings of a poll commissioned by this newspaper that showed three-quarters of Jamaicans believe the country is heading in the wrong direction and that Mr Holness enjoys a 21 percentage-point advantage over Prime Minister Portia Simpson Miller as the better leader for the country.

Nor should Mrs Simpson Miller and her administration despair over these numbers if they are serious about lifting the Jamaican economy out of the mess in which it has wallowed for more than two generations.

For the poll data have to be analysed in their broader historical context, including the narrowness of the policy options that will confront any Jamaican government and, therefore, the tight space within which a leader, whether Mrs Simpson Miller or Mr Holness, will have to manoeuvre.

Indeed, the most obvious thing in this narrative is that Jamaicans continue to be concerned about the state of the economy, especially high rates of joblessness, and how this impacts on their personal well-being. Notably, 65 per cent of the respondents believe unemployment is the major issue facing the country, 21 percentage points more than those who list crime. When other related top-priority concerns are taken into account, concern about the state of the economy is far more pervasive than the figure about unemployment suggests.

Painful adjustment

That, of course, is understandable, given the painful adjustment Jamaica is being forced to undertake to fix the effects of more than 40 years of bad economic policies, during which we grew at an annual average rate of less than one per cent. During those years, Jamaica accumulated debt of nearly 150 per cent of gross domestic product (GDP), which it struggled to pay even as the private sector was starved of capital to invest and create jobs.

There are nascent signs that after its initial contractionary impact, the Government's retreat from its pervasiveness in the economy may be bearing fruit. The Government is on the cusp of balancing its Budget; its debt is declining relative to the size of the economy; and with four consecutive quarters of growth, there are hints of increased efficiency in the economy. But while the employment rate has edged down, the fact is that the economy is now creating enough jobs to make a significant dent in the rate of joblessness and underemployment, especially among young people.

Painful lifting to be done

The larger point is that there is still much heavy and painful lifting to be done in this economic-reform project, which is not an easy political message to carry in a competitive democracy and with elections imminent.

But the Simpson Miller Government should be aware that to stall the project now would be to squander the gains achieved thus far, and worse, to have caused the Jamaican people to have borne a painful burden to no account. Going all the way might be at the risk of losing an election, but at the greater potential gain of placing Jamaica on a path of sustainable path of economic stability, job creation and growth.

Mr Holness and his party may tinker around the edges of the reform project, but there is little in terms of the fundamentals of the programme they can change. Or, if they can, we await to hear how they will. That, perhaps, is Mr Holness' dilemma.

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