Editorial: Why EPOC must continue
As Andrew Holness constructs his Government, he must resist any temptation to dismantle a number of the initiatives of the outgoing administration if the Jamaica Labour Party (JLP) is keen to maintain the growing confidence of global financial markets and the domestic private sector in the Jamaican economy. Perhaps the most important of these is the Economic Programme Oversight Committee (EPOC).
For the past three years, Jamaicans have grown accustomed to EPOC, through its chairman, Richard Byles, and via formal communiquÈs, issuing monthly assessments of the state of the island's economy and, each quarter, the likelihood of the Government meeting performance criteria under its agreement with the International Monetary Fund. In the absence of an independent agency like, say, America's Congressional Budget Office, EPOC has acted as something of an honest broker on the country's economic data.
It is important to recall the background to EPOC's establishment and, therefore, why it is relevant. In 2010, as part of the conditions under which the then JLP administration secured an economic support agreement with the IMF, domestic creditors, largely banks and pension funds, agreed to the rescheduling of more than J$700 billion of debt. That Fund programme, unfortunately, soon collapsed.
When the successor People's National Party (PNP) sought a new agreement with the IMF, a further rescheduling, dubbed the National Debt Exchange, was among the preconditions imposed by the Fund for doing business with Jamaica. But the banks, seeking to protect their money and not always trusting official data, wanted independent oversight to ensure that the Government did what it undertook to do, a kind of insurance policy. The upshot was EPOC, a public-private-sector body, with Mr Byles, the CEO of one of Jamaica's biggest corporations, as its co-chairman, and with the private-sector portion of the group being its public face.
This newspaper believes that the efforts of Richard Byles' team helped to provide the finance ministry and its technocrats with insulation against political pressure that would have eroded fiscal discipline and, in the process, contributed greatly to the Government's successful completion of 11 successive IMF reviews, and, barring something catastrophic over the next months, a 12th.
While Mr Holness' party has declared its commitment to maintaining the IMF agreement and has softened its criticism of the Fund and the programme, it's no secret that JLP officials, particularly the incoming finance minister, have in the past ridiculed the PNP administration's compliance with the targets. Moreover, some of those criticisms have been in the form of personalised, ad hominem criticisms of Mr Byles for his periodic pronouncements on the economic data and his declaration that Jamaica remained on the correct economic track. Mr Shaw branded him a "PNP mouthpiece".
There is hardly any question, though, that the work of EPOC not only contributed, but helped, to inspire confidence and trust in Jamaica's economic management. The dismantling of EPOC, or the replacement of Mr Byles with a politically more amenable figure, would not necessarily shatter confidence in Jamaica, but it would, at least in the short term, weaken it. Jamaica cannot afford that.
Mr Holness may need to swallow hard and digest some crow, but he should invite Mr Byles and EPOC to continue. Mr Byles should accept - and be as spunky as he has been. It's worth it for Jamaica.