Flawed IMF strangulation exercise
THE EDITOR, Sir:
In his recent Economic Programme Oversight Committee report, Richard Byles refers to the contraction of the economy as just a "blemish". I thought economic growth was the whole point of this International Monetary Fund (IMF) strangulation exercise. And if that sentence sounds like a contradiction (which it is), it only points to the implausibility of the current economic strategy imposed on Jamaica (and many other countries) - imposed because Jamaica is in a weak financial position through the lack of radical foresight by successive administrations.
And why is the Government cutting expenditure even more than the tax shortfall and even more than the IMF agreement requires?
Last November, questions were asked about similar underspending by the National Integrity Action (and me). No response was forthcoming.
It is crazy to be cutting spending by J$16.4 billion when economic growth surely requires stimulus (which, despite promises, is not coming from foreign capital). Not just (possibly) efficiency savings on recurrent expenditure (down by J$9 billion) , but also J$7.5 billion cuts in what should be economy-enhancing capital spending.
Why are corporate taxes allowed to underperform, especially when the hard-pressed and wage-constrained PAYE taxpayers are exceeding expectations?
The negative growth may be largely because of the drought last year affecting agriculture, but is a fall of 5.6 per cent in manufacturing really due to the temporary closure of Petrojam?
If these non-catastrophic events can knock growth backwards so easily, then surely the whole strangulation exercise is, as I have said above, fundamentally flawed.
Campaign for Social & Economic Justice (CSEJ)