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EDITORIAL - To avoid Greece, parties must level with voter..s
Published: Wednesday | October 12, 2011
Having fought your way through the stubborn argot of the bureaucrats, the message from the International Monetary Fund (IMF) bureaucrats quoted by this newspaper last week is clear: Jamaica's standby agreement with the fund is severely stressed and will require tough decisions by the Government to save it.
"You cannot grow wages faster than you grow GDP," said the IMF's country representative, Dr Gene Leon, in relation to the administration's recent increase of public-sector salaries.
He added: "The point we would like to stress is there must be, on the revenue side, a permanent increase to match a permanent increase in wages."
In other words, either the Government find ways to permanently offset the extra $30 billion a year to its wage bill, or cut the size of the public sector. Or contract it deeper than what was initially envisaged when the target was set to reduce the public-sector wage bill to nine per cent of gross domestic product, from close to 12 per cent.
This, of course, is not all. The Government has also to rein in its fiscal deficit and slash the debt-to-GDP ratio from the current 130 per cent, to 114 per cent, in two years' time and to 100 per cent by 2016.
Unveiling manifesto
In the context of what is to be done, we find refreshing the announcement by Mr Anthony Hylton, who chairs the policy commission of the People's National Party (PNP), that the PNP's election manifesto will be ready in another six weeks or so. We take this to mean that the party will publish that manifesto, even if Mr Andrew Holness, who by then, or shortly thereafter, will be prime minister, does not pursue conventional wisdom and immediately call an election.
It is easy for parties in opposition to be populist, promising voters all manner of undertakings without identifying how they will be financed and showing apparent unconcern for the state of the national treasury. That was largely the approach of the Jamaica Labour Party, whose leadership Mr Holness will assume with the planned resignation of the politically compromised Bruce Golding.
An early publication of the PNP manifesto will allow for a serious and rational debate of its offerings, which is not the case when these documents are, as usually happens, released in the middle of an election campaign. The Opposition's plans can be counterpoised against the administration's existing policies and any new ones it intends to pursue.
No easy pass for Holness
In that regard, Mr Holness should not expect to merely get a pass because of his newness to the job. Nor should he believe it to be a prudent tactic to, if possible, ride a wave of goodwill to an election victory without saying what he plans for the day after.
The fact that the Government and the Opposition have to bear in mind is that things can get worse. And they should hold Greece as an example of the result of failing to take the right decisions early.
Greek's debt-to-GDP ratio is 162 per cent, and is likely to worsen to 173 per cent next year and 200 per cent in 2013; its economy will decline 5.5 per cent this year; and its unemployment rate rise above 16 per cent.
If Jamaica is to avoid the Greece option, the parties have to level with voters.
http://jamaica-gleaner.com/gleaner/2...cleisure1.html
Published: Wednesday | October 12, 2011
Having fought your way through the stubborn argot of the bureaucrats, the message from the International Monetary Fund (IMF) bureaucrats quoted by this newspaper last week is clear: Jamaica's standby agreement with the fund is severely stressed and will require tough decisions by the Government to save it.
"You cannot grow wages faster than you grow GDP," said the IMF's country representative, Dr Gene Leon, in relation to the administration's recent increase of public-sector salaries.
He added: "The point we would like to stress is there must be, on the revenue side, a permanent increase to match a permanent increase in wages."
In other words, either the Government find ways to permanently offset the extra $30 billion a year to its wage bill, or cut the size of the public sector. Or contract it deeper than what was initially envisaged when the target was set to reduce the public-sector wage bill to nine per cent of gross domestic product, from close to 12 per cent.
This, of course, is not all. The Government has also to rein in its fiscal deficit and slash the debt-to-GDP ratio from the current 130 per cent, to 114 per cent, in two years' time and to 100 per cent by 2016.
Unveiling manifesto
In the context of what is to be done, we find refreshing the announcement by Mr Anthony Hylton, who chairs the policy commission of the People's National Party (PNP), that the PNP's election manifesto will be ready in another six weeks or so. We take this to mean that the party will publish that manifesto, even if Mr Andrew Holness, who by then, or shortly thereafter, will be prime minister, does not pursue conventional wisdom and immediately call an election.
It is easy for parties in opposition to be populist, promising voters all manner of undertakings without identifying how they will be financed and showing apparent unconcern for the state of the national treasury. That was largely the approach of the Jamaica Labour Party, whose leadership Mr Holness will assume with the planned resignation of the politically compromised Bruce Golding.
An early publication of the PNP manifesto will allow for a serious and rational debate of its offerings, which is not the case when these documents are, as usually happens, released in the middle of an election campaign. The Opposition's plans can be counterpoised against the administration's existing policies and any new ones it intends to pursue.
No easy pass for Holness
In that regard, Mr Holness should not expect to merely get a pass because of his newness to the job. Nor should he believe it to be a prudent tactic to, if possible, ride a wave of goodwill to an election victory without saying what he plans for the day after.
The fact that the Government and the Opposition have to bear in mind is that things can get worse. And they should hold Greece as an example of the result of failing to take the right decisions early.
Greek's debt-to-GDP ratio is 162 per cent, and is likely to worsen to 173 per cent next year and 200 per cent in 2013; its economy will decline 5.5 per cent this year; and its unemployment rate rise above 16 per cent.
If Jamaica is to avoid the Greece option, the parties have to level with voters.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
http://jamaica-gleaner.com/gleaner/2...cleisure1.html