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Camilo Thame and Maziki Thame | Poverty, pandemic and public priorities

Published:Sunday | May 9, 2021 | 9:33 AM
Finance Minister Dr Nigel Clarke during the Budget Debate told the Opposition 'if yuh live inna glass house, don't throw stones."

Camilo Thame and Maziki Thame | Contributors

In his final contribution to the Budget Debate, Finance Minister Dr Nigel Clarke argued that Jamaica's democracy is alive and well and that decision-making included the people.

It was not made clear what measure of inclusion Clarke was using but even in healthy democracies, economic decisions are seen as the domain of experts, not of the people. This does not mean economies should not be democratized.

In Clarke's version of democracy, “every day decisions by free economic agents aggregate to influence the progression of the economy.” What makes people “free economic agents”?

Poverty is a perfect impediment to freedom. It affects our access to education, our capacity to demand liveable wages, to set prices for what we produce or for our labour, our movement to find the cheapest prices for goods, our capacity to feed ourselves and those we care for, to save, invest or become upwardly mobile.

We must, in Jamaica, settle the question of the state's responsibility to address the needs of the poor and vulnerable. This means firstly asking, who is vulnerable?

THE PROBLEM OF POVERTY

Clarke argued that his government was moving in the right direction in addressing the problem of poverty based on the fact that in 2018, it declined to the lowest levels in 12 years under the Andrew Holness Administration.

Historically, the percentage of people living below the poverty line approached lows when real GDP per capita rose. This means we should have expected a significant rise in poverty in 2020 with the decline in GDP and that special attention should be paid to that reality. Beyond this, however, a larger number of Jamaicans are vulnerable than those deemed poor.

According to a study of the Jamaica Survey of Living Conditions, published in the United Nations Development Programme's Caribbean Human Development Report of 2016, around half of Jamaicans live on US$4 a day or less, that would classify them as poor but less than US$11.50 a day that would put them in the middle class.

We should consider what US$11.50 a day can buy in order to appreciate what it means to be middle class in Jamaica. We should also consider that these groups are vulnerable because sudden changes, like an elderly person in the household falling sick, can drag them into poverty.

Changes in remittance receipts is also a major determinant of vulnerability. Many Jamaicans are sustained by remittances from their relatives abroad in normal times and this is especially true in the COVID-19 pandemic.

People's vulnerability is directly attached to their income. Although Clarke says “inflation has been low, stable, and predictable for the past five years at slightly above 5 per cent per annum,” we must also pay attention to inflation relative to workers' compensation.

Based on inflation data from the Statistical Institute of Jamaica (STATIN), compensation of employees and the employed labour force, workers experienced a 13 per cent decline in real wages over the past 12 years (and a 25 per cent decline since 2002).

Compensation has fallen due to inflation and also relative to the minimum wage. Whereas in 2000, the real wage across the employed labour force was equivalent to just over five times the real minimum wage, it was just over three times the real minimum wage in 2019.

To put this into context, the current minimum wage could afford two people a balanced diet if they spent on nothing else, according to Professor Fitzroy Henry's 2020 study entitled 'Towards a Living Minimum Wage'. Increases in the minimum wage since 2007, when poverty was at its lowest on record, has not kept pace with inflation. In real terms, the wage floor in 2020 could afford a person 85 per cent of what it could buy in 2007.

COVID-19 AND PEOPLE'S NEEDS

According to STATIN, 46 per cent of people were still suffering from a loss to income due to COVID-19 up to last October. A UNICEF study published last September showed that 45 per cent of households experienced food shortages due to COVID-19 restrictions, and 74 per cent of households coped with food shortages by eating smaller meals, while 66 per cent ate fewer meals per day.

These grave conditions led Opposition Spokesman on Finance, Julian Robinson to recommend that the government commit millions more to the poor groups by reducing the primary surplus, or the sums remaining after spending on non-debt expenditure.

Clarke responded that not only has the government attended to the needs of the vulnerable but that they can do no more given that “debt payments are fixed, not discretionary.” Such commitments occur within the context of negotiations, they are not as Clarke says, given.

NO GLORY IN HITTING TARGETS

We see for instance in the case of Barbados, a push at the global level by Prime Minister Mia Mottley for debt relief for small island developing states given the COVID crisis. Mottley realized the Barbadian COVID stimulus through relaxing surplus obligations.

She argued, “there is no glory in hitting targets
and people are suffering”.

The intervention of Opposition Leader Mark Golding in the debates critiqued the government's foreign policy on the question of regionalism and solidarity with Venezuela, its perspective on the status of the Queen in Jamaica and on moving from decriminalization of marijuana to the inclusion of small farmers in the trade.

His critique rested on what he called the government's lack of consciousness. The prime minister told us in his response that this is a time of pragmatism, not ideology and Jamaica is beyond ideology. But the two are not mutually exclusive.

When in the past, Jamaica aligned itself with regional foreign policy or with the Non-Aligned Movement, it was being pragmatic. It was responding to limitations of size and a global political economy based on principles disadvantageous to developing countries.

The principles have not changed but our mobilisation against them have gone into decline. The pragmatism which Holness claims, has to be seen as a function of the defeat of alternative ideas about the nation, how it could be restructured and how we would locate ourselves in global politics to achieve change.

These conditions are intimately connected to how priorities are determined at the national level. That is, the question of who is centred in the concerns of the state, are reflected in public priorities and the pandemic is especially revealing.

A number of initiatives prioritised by the government since COVID-19 could well be questioned by the public. For instance, the last budget originally allocated $342 million on “pre-investment planning” for projects such as the new parliament building, and a “Government Campus” to be built at Heroes Circle.

By September (during COVID-19) that allocation ballooned to J$617 million. So far, the government has spent almost $1 billion in “pre-planning” on this project, and it plans to spend J$300 million more this year.

Also on the books this year is J$1.2 billion to kick-start a J$30-billion bypass of Montego Bay, ostensibly to reduce “congestion in the city” and J$8 billion to “support new projects which are approved for implementation under the Public Investment Management System”.

Some J$2.4 billion has been budgeted for the National Identification System. The Chinese-funded, J$57 billion Southern Coastal Highway Improvement Project forms the jewel of the government's capital spending programme to the tune of J$17 billion.

Apart from the J$1.3 billion earmarked for the long-delayed redevelopment of the Cornwall Regional Hospital, the budget is weak on expanding the capacity of the health sector.

WHERE THE SICK MUST LAY

In the middle of a pandemic that has claimed over 600 Jamaicans lives, we are led to believe that we can hardly bed more than 300 people before the sick must lay on benches and floors of the hospital or must fend for themselves.

The Falmouth field hospital that over-ran in cost at J$200 million due to bad weather and unplanned landscaping, only added 36 beds to the hospital there. Six times that amount is meant to be spent on starting construction of a road to reduce traffic in Montego Bay.

On May 6, the finance minister declared that the project will not be subject to the Public Procurement Act, (it will not go to tender) because of its importance for “national development.” Sixty-five times the amount spent on the Falmouth field hospital is to be spent on a highway that might see the least usage of motorists than any other leg of Highway 2000. Whose priorities are these in our “alive and well” democracy?

Camilo Thame is a business analyst and data journalist. Maziki Thame is a senior lecturer at the Institute for Gender and Development Studies, at the University of the West Indies, Mona.