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he politics of the economic debate CLAUDE ROBINSON
Sunday, January 24, 2010
AFTER dramatically reporting for work and declaring readiness to debate the Government's tax package and economic programme weeks ago, the People's National Party (PNP) appeared confused and indecisive Thursday when the leadership stunningly announced that they were not ready.
On Tuesday, January 5, the Opposition staged a theatrical unilateral Parliamentary session demanding immediate debate on the January 1 tax package of J$23 billion and the Government's medium-term economic programme. They insisted that Prime Minister Bruce Golding's offer of a January 19 debate was unacceptable. Bring it on now, they taunted.
So it was surprising when on the appointed January 19, Derrick Kellier, leader of Opposition Business in the House of Representatives, asked for more time.
Opposition spokesman on finance Dr Omar Davies was not available; the PNP wanted more time to examine the Letter of Intent the Government has agreed to with the International Monetary Fund and an accompanying medium-term economic programme as the basis for a US$1.2-billion loan the Government desperately needs to stave off disaster.
Mr Kellier did not help his side much with an unnecessarily combative and poorly communicated explanation of what had all the appearance of an about-face. Nor was there sufficient clarity and support from his front-bench colleagues.
Not surprisingly, the turnaround drew venom from the government benches who relished the chance to blow back after the PNP had won some support for the January 5 gesture. The immediate result was a raucous exchange across the aisle as political point-scoring triumphed over rational and serious examination of strategies and policies to respond to the economic crisis that is a major concern for most Jamaicans.
The bad behaviour prompted the PNPYO to chide its parent body for fumbling the debate ball and the Government for its quarrelsome response. "We are of the belief that this display shows the limited level of seriousness with which the country's affairs are being handled as well as the continued partisan approach to governance," the PNPYO said in its statement.
Pushed back on the defensive by widespread criticism of its decision, PNP Leader Portia Simpson Miller went into damage control mode Wednesday, explaining that what the nation saw on live television was really not as bad as it appeared.
According to the PNP leader, the demand for the postponement was because the Government provided crucial information for the debate less than 24 hours before it was due to start.
Further, some of the details in the Letter of Intent had not been outlined in the briefings Government gave to the Opposition. Also, the practice in Budget debates of allowing a week between the presentation by the minister of finance and the response of the Opposition should be observed in this case, given the gravity of the information.
Some of this makes sense. However, Mrs Simpson Miller's explanation would have carried more weight had she made her observations in the House.
In any event it was not a sufficient case for not having the debate. Given the large amount of information and data in the public domain -- the huge Christmas tax package, the debt exchange programme, for example -- there was a lot to start talking about.
All that was required was for the Opposition to press the Government to continue the debate next week; the Government would have refused such a proposal to their political embarrassment.
After all the fuss, we now know that the debate will continue on Tuesday. This means that the Opposition has had all the time in the world to consider the full package Government has placed on the table -- the Christmas tax package, the Letter of Intent and the Memorandum of Economic and Financial Policies (MEFP) in which Audley Shaw, the minister of finance and the public service, provides details of the medium-term economic programme.
Moving beyond the dramatic exchanges in the House and the PNP's inept handling of the situation, there will be much focus on the political response of the PNP to the Government's decisions to deal with the economic crisis.
Given Mrs Simpson Miller's consistent identification with the poor and marginalised, her natural instinct might be to oppose vigorously much of the programme for putting them at further risk.
But she and the PNP leadership will have to address two fundamental issues: 1) What alternatives do they have; and 2) what form the should opposition take and what the end game should be.
One of the more anticipated issues will be the Opposition's response to what some would consider the lynchpin of the strategy, namely the Jamaica Debt Exchange (JDX) programme where major players in the financial sector have 'agreed' to 'voluntarily' give up about $40 billion by accepting lower interest on some $700 billion in government bonds.
Dr Davies had earlier proposed an alternative approach which would see bondholders having to pay higher taxes on interest income. Hence, he can hardly quarrel now with a programme which is more far-reaching and which goes to the heart of one of the fundamental weaknesses in the Jamaican economy - unsustainable high interest rates over decades.
Furthermore, the big holders of government bonds have 'agreed' to take the cut in interest payments, especially as Government has provided a pool of funds to shore up the balance sheets of financial institutions that might be impaired by the loss in interest income.
What we can expect is that Mrs Simpson Miller will press the case of 'regular' bondholders including pensioners and retirees who will not only have to live on less but will have to wait longer for their bonds to mature. "Maybe I'll be dead by then," one such affected senior remarked to me Thursday after receiving advice from his financial institution.
She will also complain about the 40 per cent bus fare increase -- a hike that will cut deeply into the take-home pay of the working poor.
We can also expect Dr Davies to question the credibility of key government targets like reducing the size of the public sector wage bill from 11.75 per cent of GDP in this financial year to 9.5 per cent by 2013/2014; maintaining the wage bill at the current level of $126 billion in nominal terms for the next two years; keeping inflation at eight per cent over the next two financial years; and growing the economy by 0.5 per cent in 2010/2011 -- rising to two per cent a year afterwards.
But to make the Opposition a credible alternative to the Government, he will have to go beyond 'I told you so' and poking fun at Mr Shaw's competencies. What would the PNP do differently?
Given the seasoned political campaigners in the PNP it cannot be lost on them that the 27-month accord with the IMF ends in June 2012, just when the Government's five-year term ends. If the programme works the JLP will have a good chance at being re-elected.
But while the PNP must keep an eye on recapturing state power, they should not want to be seen as too hungry for power. They could not want to preside over ruins, misery and failed lives, hence they have to be a responsible Opposition. So what appears to be bungling and waffling about readiness for a debate may actually be indecision about what to say and how to oppose.
The Government has said their piece and Mr Golding clearly knows the political risks. We need similar clarity from the Opposition.
http://www.jamaicaobserver.com/columns/Claude-jan-24
Sunday, January 24, 2010AFTER dramatically reporting for work and declaring readiness to debate the Government's tax package and economic programme weeks ago, the People's National Party (PNP) appeared confused and indecisive Thursday when the leadership stunningly announced that they were not ready.
On Tuesday, January 5, the Opposition staged a theatrical unilateral Parliamentary session demanding immediate debate on the January 1 tax package of J$23 billion and the Government's medium-term economic programme. They insisted that Prime Minister Bruce Golding's offer of a January 19 debate was unacceptable. Bring it on now, they taunted.
So it was surprising when on the appointed January 19, Derrick Kellier, leader of Opposition Business in the House of Representatives, asked for more time.
Opposition spokesman on finance Dr Omar Davies was not available; the PNP wanted more time to examine the Letter of Intent the Government has agreed to with the International Monetary Fund and an accompanying medium-term economic programme as the basis for a US$1.2-billion loan the Government desperately needs to stave off disaster.
Mr Kellier did not help his side much with an unnecessarily combative and poorly communicated explanation of what had all the appearance of an about-face. Nor was there sufficient clarity and support from his front-bench colleagues.
Not surprisingly, the turnaround drew venom from the government benches who relished the chance to blow back after the PNP had won some support for the January 5 gesture. The immediate result was a raucous exchange across the aisle as political point-scoring triumphed over rational and serious examination of strategies and policies to respond to the economic crisis that is a major concern for most Jamaicans.
The bad behaviour prompted the PNPYO to chide its parent body for fumbling the debate ball and the Government for its quarrelsome response. "We are of the belief that this display shows the limited level of seriousness with which the country's affairs are being handled as well as the continued partisan approach to governance," the PNPYO said in its statement.
Pushed back on the defensive by widespread criticism of its decision, PNP Leader Portia Simpson Miller went into damage control mode Wednesday, explaining that what the nation saw on live television was really not as bad as it appeared.
According to the PNP leader, the demand for the postponement was because the Government provided crucial information for the debate less than 24 hours before it was due to start.
Further, some of the details in the Letter of Intent had not been outlined in the briefings Government gave to the Opposition. Also, the practice in Budget debates of allowing a week between the presentation by the minister of finance and the response of the Opposition should be observed in this case, given the gravity of the information.
Some of this makes sense. However, Mrs Simpson Miller's explanation would have carried more weight had she made her observations in the House.
In any event it was not a sufficient case for not having the debate. Given the large amount of information and data in the public domain -- the huge Christmas tax package, the debt exchange programme, for example -- there was a lot to start talking about.
All that was required was for the Opposition to press the Government to continue the debate next week; the Government would have refused such a proposal to their political embarrassment.
After all the fuss, we now know that the debate will continue on Tuesday. This means that the Opposition has had all the time in the world to consider the full package Government has placed on the table -- the Christmas tax package, the Letter of Intent and the Memorandum of Economic and Financial Policies (MEFP) in which Audley Shaw, the minister of finance and the public service, provides details of the medium-term economic programme.
Moving beyond the dramatic exchanges in the House and the PNP's inept handling of the situation, there will be much focus on the political response of the PNP to the Government's decisions to deal with the economic crisis.
Given Mrs Simpson Miller's consistent identification with the poor and marginalised, her natural instinct might be to oppose vigorously much of the programme for putting them at further risk.
But she and the PNP leadership will have to address two fundamental issues: 1) What alternatives do they have; and 2) what form the should opposition take and what the end game should be.
One of the more anticipated issues will be the Opposition's response to what some would consider the lynchpin of the strategy, namely the Jamaica Debt Exchange (JDX) programme where major players in the financial sector have 'agreed' to 'voluntarily' give up about $40 billion by accepting lower interest on some $700 billion in government bonds.
Dr Davies had earlier proposed an alternative approach which would see bondholders having to pay higher taxes on interest income. Hence, he can hardly quarrel now with a programme which is more far-reaching and which goes to the heart of one of the fundamental weaknesses in the Jamaican economy - unsustainable high interest rates over decades.
Furthermore, the big holders of government bonds have 'agreed' to take the cut in interest payments, especially as Government has provided a pool of funds to shore up the balance sheets of financial institutions that might be impaired by the loss in interest income.
What we can expect is that Mrs Simpson Miller will press the case of 'regular' bondholders including pensioners and retirees who will not only have to live on less but will have to wait longer for their bonds to mature. "Maybe I'll be dead by then," one such affected senior remarked to me Thursday after receiving advice from his financial institution.
She will also complain about the 40 per cent bus fare increase -- a hike that will cut deeply into the take-home pay of the working poor.
We can also expect Dr Davies to question the credibility of key government targets like reducing the size of the public sector wage bill from 11.75 per cent of GDP in this financial year to 9.5 per cent by 2013/2014; maintaining the wage bill at the current level of $126 billion in nominal terms for the next two years; keeping inflation at eight per cent over the next two financial years; and growing the economy by 0.5 per cent in 2010/2011 -- rising to two per cent a year afterwards.
But to make the Opposition a credible alternative to the Government, he will have to go beyond 'I told you so' and poking fun at Mr Shaw's competencies. What would the PNP do differently?
Given the seasoned political campaigners in the PNP it cannot be lost on them that the 27-month accord with the IMF ends in June 2012, just when the Government's five-year term ends. If the programme works the JLP will have a good chance at being re-elected.
But while the PNP must keep an eye on recapturing state power, they should not want to be seen as too hungry for power. They could not want to preside over ruins, misery and failed lives, hence they have to be a responsible Opposition. So what appears to be bungling and waffling about readiness for a debate may actually be indecision about what to say and how to oppose.
The Government has said their piece and Mr Golding clearly knows the political risks. We need similar clarity from the Opposition.
http://www.jamaicaobserver.com/columns/Claude-jan-24
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