Editorial | Listening for Dr Clarke's voice

Except for a brief parliamentary foray into the politics of government vehicle purchases and on how Jamaica has transcended the International Monetary Fund (IMF), not much has been heard from Nigel Clarke in the month since he was drafted into the Cabinet as finance minister. He, like Portia Simpson Miller, is probably too busy "working, working, working" to be often in the spotlight.

Dr Clarke, though, is accountable not only for the technical management of the country's fiscal accounts. His portfolio includes a related subject - public-sector employment. Which is an issue in need of urgent public engagement to arrive at consensus for its reform. Delay will mean that the country is soon to be in another election cycle, causing the proverbial can to be again kicked down the road.

Indeed, the urgency the IMF attaches to this issue is highlighted in the Fund's latest Article IV review of the Jamaican economy.

Said the IMF: "The Government urgently needs to reduce the public-sector wage bill. So far, containing the wage bill has mostly relied on nominal wage freezes and accounting changes that shift spending outside of wages (including reclassifying government statutory contributions and increasing non-wage and quasi-fiscal benefits). This has created a complex and inequitable wage structure and precipitated extended negotiations with unions. Sustainably reducing the wage bill will require fundamental reforms."

Public-sector wages were this year projected to consume around a third of the Government's Budget and approximately 40 per cent of tax revenue. These, however, are unlikely to be settled numbers, given the fancy accounting to which the IMF alluded and lingering pay negotiations with a handful of critical public-sector unions, including those representing teachers and the police.

As it now stands, the public-sector wage bill remains above 10 per cent of GDP, as against the nine per cent called for by the IMF. And it seems that meeting that target over the next year or two will, like the previous deadline, not be met.

As an economic adviser to Prime Minister Andrew Holness, including when the PM was in Opposition, Dr Clarke was a strong, even hawkish, though quiet, proponent of the need to lower the wage-to-GDP ratio. While he appreciated the political difficulties this represented for governments, intellectual understanding has been overridden by ownership and accountability. The best option for any government, in the circumstance, is to be honest and transparent.

PRINCIPAL ROLE

So, Mr Holness may have the principal role of making the case for reforms - as he does from time to time - but it is Dr Clarke who will have to negotiate with unions and manage the accounts to make it happen.

Among the reforms suggested by the IMF are:

- A pay structure that better rewards performance and keeps quality staff;

- Improved control hiring in the public sector;

- Divesting functions that are better handled by the private sector, which the Government can't afford; and

- A greater use of technology to improve efficiency.

"These measures have been consistently proposed in the course of the IMF's engagement with Jamaica for over a decade, but progress has been minimal," the Fund lamented in the Article IV document. "Unavoidably, implementing such measures will require a reduction in public-sector employment. Nonetheless, to create space for productive spending on the Government's priorities - on crime reduction, infrastructure, health, education and social assistance - these changes will be essential."

It is a difficult conversation for a government to have with its employees. The dialogue, however, must not only take place, but implementation must happen.

A close confidant of the prime minister and, critically, as his finance minister, Dr Clarke's is a crucial voice in this discourse, which we expect to hear quickly and loudly. He has no time for a political learning curve. The matter is urgent.