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The politics of poverty - Turning opportunity into crisis

Published:Sunday | June 17, 2012 | 12:00 AM

Marlon Morgan, Guest Columnist

Two Thursdays ago, the International Monetary Fund (IMF) issued a statement on Jamaica following its Article IV consultations with local authorities. Everyone should find that statement quite instructive.

Although it failed to give a deep account as to why our economy is in its current position, it effectively brought our fundamental macroeconomic challenges into sharp focus. Beyond that, it sent a strong and unambiguous signal to the Government as to what our priorities should be, where we should be heading as a country, and the actions we should pursue in order to get there - especially if we hope to secure a new IMF deal soon.

The IMF's most recent pronouncements have come against the backdrop of a keenly contested debate between the Government and the parliamentary Opposition as to what exactly happened with the previous IMF agreement and what is happening with the current negotiations.

As it did while in office, the Opposition maintains that there were no IMF reviews or drawdowns since December 2010 as a result of a disagreement in relation to the pace at which agreed reforms (i.e., pension, public-sector and tax reform) were to be implemented, as opposed to a disagreement in the need for the reforms itself. Meaningful dialogue, preparatory work and consensus building, they assert, were critical to successful implementation of the reforms.

Notwithstanding the mitigating circumstances, some of which were beyond the then Government's control, I would be the first to concede that circumstances that cause an IMF agreement to hit a snag are generally discomforting, undesirable and uninspiring.

In its recent statement, the IMF argued as follows: "The current favourable political environment provides (the Government of Jamaica) an opportunity to address the significant macroeconomic imbalances and rising vulnerabilities ... ." The IMF is, in essence, signalling to the Simpson Miller administration that it has an unprecedented and tremendous opportunity to, once and for all, act decisively and implement game-changing reforms that are required to put this country on a path towards sustainable growth, development and social prosperity.

This "favourable political environment" to which the IMF refers is no chance occurrence. It certainly wasn't created by the Simpson Miller administration. How has this favourable political environment come about?

Praiseworthy opposition

The answer is to be found in a closer examination of what the IMF is actually saying. By referring to the favourable political environment, the IMF is literally spelling out to the Government that, in addition to the overwhelming parliamentary majority it enjoys and the work that has been done (e.g., the Green Paper on tax reform and the vast stakeholder consultations), the posture of the Opposition, thus far, is conducive to the implementation of the tough measures that are required to fix our economy.

It is to the Opposition's credit that the political environment can be deemed favourable, as that was not always the case. The political environment between 2007 and 2011, as we may recall, was everything but favourable.

With the change of administration, we no longer have an Opposition promising to be the Government's worst nightmare. We no longer have an Opposition that panders to expedience and confrontational politics - a politics which can only serve to divide the nation and distract Government from the work that has to be done, while promoting mayhem and social upheaval.

For too long, this country has practised a politics of divide and rule, opportunism and partisan one-upmanship which often sees political expedience rising above the national interest. That kind of politics must come to an end. It is the kind of politics the Holness-led Opposition has come to regard as the "politics of poverty".

Elsewhere in its statement, the IMF lamented the previous administration's failure to maximise the gains derived from the Jamaica Debt Exchange (JDX) by following it up with fiscal consolidation. Fiscal consolidation, by the way, simply refers to conscious policy effort by a government to reduce a country's debt and fiscal deficit by enhancing revenues and eliminating wasteful public expenditure.

It is to be noted, however, that while the former government made attempts at fiscal consolidation, the prospects of successfully implementing them were considerably hampered, if not sabotaged altogether, by partisan politics. Political opportunism saw the then Opposition doing everything in its power to destabilise and play upon the fears and concerns of the entire nation: public-sector workers, potential investors, small business operators and the poor.

One may readily recall the then Opposition's failure to provide much-needed support to the Government in critical areas of national development. It opposed the JDX, chastised the Air Jamaica divestment, sabotaged the six crime bills, condemned the imposition of a public-sector wage freeze (which the People's National Party (PNP) itself had to impose recently), tricked public-sector workers into believing they would be losing their jobs, and took to the streets whenever they could, inciting various protests and staging several bus tours.

At present, the actions of the Opposition are diametrically opposed to those outlined above. Indeed, the Opposition's stance on critical national issues has been refreshing and magnanimous. It has been advocating, stridently and soberly, and has been able to provide critical oversight to public policy, keeping the Government on its toes without resorting to nightmare politics.

We must all be concerned at this point with the Simpson Miller administration's dithering on the implementation of the necessary reforms to move the country forward. If the recent attempt during the Budget Debate to disguise an ill-conceived and iniquitous tax package as tax reform is anything to go by, we are all in for a rude awakening.

Cooperative JLP

It is to be noted that the Government enjoys an overwhelming mandate from the people, considerable political capital, and a favourable political environment - an environment created by the Opposition, not the Government. The parliamentary Opposition has been cooperative and has already signalled support in critical areas such as education, debt management and major public-infrastructure projects. The Government has a glorious opportunity to act, and must not turn that opportunity into a crisis.

Mrs Simpson Miller and her team must now forge ahead and do the things they promised. They must proceed with the implementation of tax, pension and public-sector reform, in addition to managing public-sector wage expectations and strategically divesting loss-making public assets.

After all, the previous administration paid a political price for taking many tough and unpopular decisions, including that controversial Air Jamaica divestment. Mrs Simpson Miller should, perhaps for the first time ever, use her political capital in a manner that benefits not just her and the PNP, but the country as a whole. She must be willing to expend some of her political capital if she truly cares for the poor and is serious about balancing people's lives.

Post-Independence Jamaica has not been able to successfully contend with that intersect between politics and economics. By that I mean, our politics has not been mature enough to effectively deal with the economic measures that need to be imple-mented in addressing and correcting the inefficiencies, inequities and structural imbalances that stymie our economic advancement.

SHUN SPITEFUL POLITICS

Successive administrations, in contemplating tough and game-changing measures, have had to look over their shoulders at every turn, warding off an opportunistic Opposition bent on engaging in political gamesmanship. The PNP did it to the Seaga administration of the 1980s as it rationalised the public sector and implemented measures aimed at fiscal consolidation. The JLP did it to the Patterson administration of the 1990s when it proposed the gas tax, and the PNP did not miss the opportunity recently to sock it to the Golding administration when it pursued the debt exchange, the gas tax, and the Air Jamaica divestment.

The current parliamentary Opposition has demonstrated that it has turned its back on that kind of politics - the politics of poverty. The politics of poverty does not allow for a sober, mature and responsible leveraging of political conduct in a manner that will allow us to do the things that are required to fix our ailing economy. The Government must act, and it must act now. It must grasp this opportunity with both hands. It must not turn this opportunity into a crisis.

Marlon Morgan is a vice-president of G2K and aide to Opposition Leader Andrew Holness. Email feedback to columns@gleanerjm.com and brianlara_400@yahoo.com.