Tweet
JAMAICA is teetering at a crisis over its debt, similar to what brought Greece to the brink of collapse and is now threatening Italy.
In the cases of those countries, their partners in the common currency, the euro, forced them to acknowledge the truth and the actions necessary to save themselves. In Jamaica, neither of the political parties seems either willing or ready to face the reality of the depth of our problem and what will be required to fix it.
Jamaica's debt at the end of August was over $1.6 trillion which, shared among all 2.7 million of us who live here, amounts to nearly $600,000 apiece. Indeed, in the first seven months of this year, the debt rose by $86.55 billion, or more than $408 million per day.
Even with last year's Jamaica Debt Exchange (JDX), after the Government serviced its debt, what was left over from all revenue, as well as gifts from foreign governments and agencies, could pay less than two-thirds of the public-sector wage bill.
In the current fiscal year, even as it underspent in critical areas, the Government's obligations have grown, but revenue has not kept pace. The inevitable upshot: rising debt.
Unsustainable
The situation is unsustainable. If we do nothing, the economy will collapse. So, spending has to be brought closer in line with income, even as the Government increases its revenue.
The reality is that the public sector has to be reformed and rationalised. The system to fund civil-service pension has to be overhauled so that employees contribute to their future benefit. The reorganisation of the tax system, so that more people pay, or pay their fair share, can no longer be delayed.
But, for this to happen, the political parties first have to acknowledge the crisis and resolve to tell Jamaicans the truth. This will require aware and strong leadership capable first of building internal consensus.
To paraphrase Greece's outgoing prime minister, George Papandreou, a failure to act would be "historically irresponsible".
http://jamaica-gleaner.com/gleaner/2...ead/lead2.html
In the cases of those countries, their partners in the common currency, the euro, forced them to acknowledge the truth and the actions necessary to save themselves. In Jamaica, neither of the political parties seems either willing or ready to face the reality of the depth of our problem and what will be required to fix it.
Jamaica's debt at the end of August was over $1.6 trillion which, shared among all 2.7 million of us who live here, amounts to nearly $600,000 apiece. Indeed, in the first seven months of this year, the debt rose by $86.55 billion, or more than $408 million per day.
Even with last year's Jamaica Debt Exchange (JDX), after the Government serviced its debt, what was left over from all revenue, as well as gifts from foreign governments and agencies, could pay less than two-thirds of the public-sector wage bill.
In the current fiscal year, even as it underspent in critical areas, the Government's obligations have grown, but revenue has not kept pace. The inevitable upshot: rising debt.
Unsustainable
The situation is unsustainable. If we do nothing, the economy will collapse. So, spending has to be brought closer in line with income, even as the Government increases its revenue.
The reality is that the public sector has to be reformed and rationalised. The system to fund civil-service pension has to be overhauled so that employees contribute to their future benefit. The reorganisation of the tax system, so that more people pay, or pay their fair share, can no longer be delayed.
But, for this to happen, the political parties first have to acknowledge the crisis and resolve to tell Jamaicans the truth. This will require aware and strong leadership capable first of building internal consensus.
To paraphrase Greece's outgoing prime minister, George Papandreou, a failure to act would be "historically irresponsible".
http://jamaica-gleaner.com/gleaner/2...ead/lead2.html
Comment