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Independent body needed to set salaries of public service executives
KEN CHAPLIN
Tuesday, November 10, 2009
The extravagant compensation which was paid to former Bank of Jamaica Governor Derick Latibeaudiere and the high payment to Aubyn Hill for his work in the divestment of the sugar industry indicates that compensation for certain public service executives should be removed from the hands of politicians and placed in a competent, independent authority.
KEN CHAPLIN
No politician should have anything to do with the setting of compensation to holders of public offices like Latibeaudiere and Hill. Prime Minister Bruce Golding has described the compensation to Latibeaudiere as "unacceptable, embarrassing and repugnant", and many people, including members of the PNP, have agreed with him in essence and that the BOJ governor's dismissal was justified.
The compensation packages paid to Latibeaudiere and Hill stunned many Jamaicans, including those who work in the public service. In the case of Latibeaudiere, his compensation package was $38 million per year, two-thirds of which was rental and upkeep for his own home. In addition, taxpayers also paid for a fully maintained car, entertainment expenses, medical and life insurance, guaranteed pension and all other benefits to which non-contracted service employees of the bank are entitled. He had a generous loan of $51 million at five per cent. How former Finance Minister Dr Omar Davies could have approved Latibeaudiere's compensation package is one of the mysteries of the PNP's governance for more than 18 years. No governor should be allowed to set his own terms.
Hill's income from taxpayers was nearly $2 million monthly. Now there is no doubt that, given the importance of the divestment programme for the sugar industry and the huge sum he saved the country in the process, Hill should be well paid, but the amount was far too high. In both cases it was basically a matter of how much the country, which is under enormous financial constraints, could afford to pay. The country cannot afford to pay such hefty sums.
There is a new breed of public servants in the top echelons who want the most they can get out of taxpayers. They are more concerned with the pay they receive than with the national interest. One retired public servant told me that all honest public servants who were in the service before 1993 are now suffering because of the pittance they accepted. They were idiots because they put the interest of their country above remuneration. Another retired civil service head of department remarked to me that it was not that they were idiots, but they regarded their jobs as a public service and considered the non-financial benefits they received to further their education as adequate.
It was not a matter of any great conflict of fiscal policy between Latibeaudiere and Minister of Finance and Planning Audley Shaw that caused the problem, but rather the approach. I have had discussions with Latibeaudiere on several occasions on interest rates and the foreign exchange rate stability. Incidentally, some people are saying he was arrogant. I think that he displayed great confidence and a forthright manner, not arrogance.
Shaw wants a low interest rate to push production, earn foreign exchange and create jobs. In this respect he is supported by the Jamaica Manufacturers Association. Latibeaudiere's position was that if the rates are too low, this would put a lot of money into circulation and drive up inflation. Inflation is generally caused by the expansion of the volume of currency and bank credit available for purchasing goods and services, resulting in considerable price hikes, wages and costs as happened in the 1990s. People would also be able to borrow to buy more foreign currency to save abroad as happened many years ago. This caused pressure on the country's international reserves. Of course, a healthy international reserve is critical to trade with other countries.
The BOJ believes that low inflation ought to be the focus of monetary policy. It is imperative that the country should have a low and stable inflation. A high and unpredictable inflation is deleterious to social and economic welfare, stable labour market and work environment as well as business confidence and growth. In the recent past, the BOJ has been successful in holding down inflation to within single digits.
http://www.jamaicaobserver.com/colum...XECUTIVES_.asp
KEN CHAPLIN
Tuesday, November 10, 2009
The extravagant compensation which was paid to former Bank of Jamaica Governor Derick Latibeaudiere and the high payment to Aubyn Hill for his work in the divestment of the sugar industry indicates that compensation for certain public service executives should be removed from the hands of politicians and placed in a competent, independent authority.
KEN CHAPLIN
No politician should have anything to do with the setting of compensation to holders of public offices like Latibeaudiere and Hill. Prime Minister Bruce Golding has described the compensation to Latibeaudiere as "unacceptable, embarrassing and repugnant", and many people, including members of the PNP, have agreed with him in essence and that the BOJ governor's dismissal was justified.
The compensation packages paid to Latibeaudiere and Hill stunned many Jamaicans, including those who work in the public service. In the case of Latibeaudiere, his compensation package was $38 million per year, two-thirds of which was rental and upkeep for his own home. In addition, taxpayers also paid for a fully maintained car, entertainment expenses, medical and life insurance, guaranteed pension and all other benefits to which non-contracted service employees of the bank are entitled. He had a generous loan of $51 million at five per cent. How former Finance Minister Dr Omar Davies could have approved Latibeaudiere's compensation package is one of the mysteries of the PNP's governance for more than 18 years. No governor should be allowed to set his own terms.
Hill's income from taxpayers was nearly $2 million monthly. Now there is no doubt that, given the importance of the divestment programme for the sugar industry and the huge sum he saved the country in the process, Hill should be well paid, but the amount was far too high. In both cases it was basically a matter of how much the country, which is under enormous financial constraints, could afford to pay. The country cannot afford to pay such hefty sums.
There is a new breed of public servants in the top echelons who want the most they can get out of taxpayers. They are more concerned with the pay they receive than with the national interest. One retired public servant told me that all honest public servants who were in the service before 1993 are now suffering because of the pittance they accepted. They were idiots because they put the interest of their country above remuneration. Another retired civil service head of department remarked to me that it was not that they were idiots, but they regarded their jobs as a public service and considered the non-financial benefits they received to further their education as adequate.
It was not a matter of any great conflict of fiscal policy between Latibeaudiere and Minister of Finance and Planning Audley Shaw that caused the problem, but rather the approach. I have had discussions with Latibeaudiere on several occasions on interest rates and the foreign exchange rate stability. Incidentally, some people are saying he was arrogant. I think that he displayed great confidence and a forthright manner, not arrogance.
Shaw wants a low interest rate to push production, earn foreign exchange and create jobs. In this respect he is supported by the Jamaica Manufacturers Association. Latibeaudiere's position was that if the rates are too low, this would put a lot of money into circulation and drive up inflation. Inflation is generally caused by the expansion of the volume of currency and bank credit available for purchasing goods and services, resulting in considerable price hikes, wages and costs as happened in the 1990s. People would also be able to borrow to buy more foreign currency to save abroad as happened many years ago. This caused pressure on the country's international reserves. Of course, a healthy international reserve is critical to trade with other countries.
The BOJ believes that low inflation ought to be the focus of monetary policy. It is imperative that the country should have a low and stable inflation. A high and unpredictable inflation is deleterious to social and economic welfare, stable labour market and work environment as well as business confidence and growth. In the recent past, the BOJ has been successful in holding down inflation to within single digits.
http://www.jamaicaobserver.com/colum...XECUTIVES_.asp