Let's really talk hope

Marlon Morgan, Contributor

It is generally accepted that the People's National Party (PNP) was able to mobilise a strong crowd of supporters into the National Arena and rock the gathering of comrades at its recent party conference.

It is one thing to mobilise supporters and energise one's base in an environment where the customary hustings and political jabs are likely to supersede all else. It is another thing, however, to underestimate the intelligence of the onlooking public by attempting to misrepresent and distort the facts, thinking you can get away with it.

The opposition leader's presentation had an apparent disconnect with reality as it relates to the state of the national economy over the past two decades. By speaking highly of where the PNP left certain macroeconomic indicators with absolutely no regard to the levels at which those indicators generally stood under the previous administration, the opposition leader was most disingenuous in failing to paint the full picture and present the facts in the appropriate context.

We are at a juncture in our political development where greater objectivity and dispassionate analysis of issues and policy positions are required. Both the PNP and the JLP need to be mindful of this, for the Jamaican people demand it and quite frankly, I believe, they are most deserving of it.

The PNP marketed the 72nd staging of its conference on a platform of hope, undertaking to inspire and restore the hope the current administration, in its opinion, has ravaged. It is clear, however, that they failed to restore that hope not only by virtue of what was espoused at the conference, but to an even greater extent by the spectre of policy missteps, mismanagement and corruption that continues to haunt the PNP.Alas, civil society has matured politically and with that maturity have become more discerning today than ever before. It is against this backdrop that they are questioning the sincerity of a party and government-in-waiting which they recall as having decimated, in the first place, that hope being talked about today.

In fact, the Jamaican people would hasten to point out to the opposition leader that in spite of the many challenges and the missteps of the JLP, missteps with which we are all too familiar, the current administration's efforts to repair the breach are the closest we have ever come in two decades to truly "restoring the hope". I will be the first to admit, however, that the hope cannot and will not be restored overnight. Nor will it be possible to repair the breach in an instant.

enumeration of achievements

And before I get into a more technical assessment of Mrs Simpson Miller's presentation, I must disabuse the minds of those persons, JLP supporters included, who would want the rest of us to believe that the PNP accomplished nothing over the 18 and a half years it formed the government. Any such assertion is simply unfortunate and it is for this reason that I welcomed Mrs Simpson Miller's enumeration of the achievements of the PNP government in respect of: telecommunications liberalisation, infrastructure development and social programmes such as PATH and the NHF.

While it was good to have invested, for example, in infrastructural development such as highway and other road construction, the previous administration kept going about well-intended programmes and policies in the wrong manner. As the current finance minister would argue, a country simply cannot afford to construct roads on 24, 17 or even 12 per cent money for that matter. Those interest rates are simply too onerous and this is what unfortunately pertained under the PNP's different financing programmes, Highway 2000 included.

As far as a more technical analysis is concerned, it is useful to begin with an assessment of the opposition leader's main question: are you better off today than you were three years ago? It is extremely disingenuous to ask the Jamaican people that question at this juncture.

No well-meaning person can fairly compare their standard of living today following the unprecedented global economic fallout with their standard of living three years ago (before the crisis impacted). While there have been upward adjustments in salaries (for example the public-sector wage bill has increased by over 50 per cent since September 2007) and other improvements in conditions of service among many workers, the compounded effect of inflation, unavoidable revenue measures, job losses and other adversities would make persons inclined to feel worse off today compared to 2007.

highest level of impoverishment

This situation is not unique to Jamaica, as the official poverty rate in the United States (14.3 per cent) in 2009 represented the highest level of impoverishment recorded in that country since 2004. In fact, the absolute number of persons in poverty as at 2009 is the largest number recorded in the 51 years that poverty estimates have been available.

The opposition leader went on to assert that because of the current administration's 'failings', the country is facing a national crisis. But lest we forget, upon demitting office in 2007, Mrs Simpson Miller handed over a structurally weak and deficient economy. While other Caribbean countries enjoyed per capita incomes of between US$8,000 and US$15,000, Jamaica's per capita income was hobbling along at just over US$4,000. And while other economies in the region had growth rates of between four and 12 per cent, Jamaica has over the last 15 years averaged 0.7 per cent annual GDP growth. To make matters worse, the national debt became unbridled with the cost of servicing that debt standing at unsustainably high interest rates, leaving both the previous and current government no room to manoeuvre in response to crises and shocks to the economy.

Needless to say, the foregoing was exacerbated by virtually no fiscal discipline, and the result was a history of profligacy and runaway expenditure, whether due to having "ran with it" or the loose and ineffective monitoring of the expenditure of public entities.

As it relates to the thousands of Jamaicans who have either lost their jobs or have otherwise been dislocated, my concern and empathy knows no bounds. We must be mindful, however, of the fact that job losses have been very significant across the globe in the last three years. Recessionary environments typically throw up numerous job losses. It is equally important to note, also, that Jamaica has manoeuvred relatively better than many other countries (some of which have had to considerably reduce the size of their public sector and drastically cut public-sector salaries) during these extremely harsh economic times. Indeed, the government has managed to stabilise the economy, enhance the social safety net, preserve public- sector jobs and initiate other programmes aimed at mitigating the plight of the most vulnerable among us.

There are many encouraging macroeconomic indicators at this time. The exchange rate is stable, benchmark interest rates are at a 33-year low at 7.75 per cent and the inflation rate has moderated considerably over the past few months and is projected in the range of six to seven per cent this year. Our net international reserves are at a healthy US$1.9 billion, with gross reserves standing at a robust US$2.7 billion.

national debt a perennial concern

Admittedly, the size of the national debt has been and remains a perennial concern. And whereas the increase in the debt stock over the past three years has been unavoidable, one must understand that there are ways to treat with a stifling debt burden. Steps have and are being taken at present to do precisely that. They include: i) replacing high-cost debt with lower-cost debt by borrowing smarter and cheaper - particularly within the context of accompanying fiscal responsibility measures, ii) executing a debt operation such as the Jamaica Debt Exchange, and iii) growing our way out of debt by creating an enabling environment to stimulate investments, domestic production and aggregate demand, ultimately generating the income to repay.

Following the agreement with the International Monetary Fund and other multilateral institutions, over US$2.4 billion is guaranteed to be injected into the economy over a two-year period at interest rates of between 0.63 per cent and 1.51 per cent. And while the opposition leader speaks glibly about "good governance", the Government has, by way of legislation (for example the Public Bodies Management Accountability Act) and the Fiscal Responsibility Framework, committed itself to a new and higher level of transparency and fiscal prudence. These best practices have already been ushering in a new wave of accountability in the entire public-sector machinery which includes both central government and public bodies. Economically challenging times like these call for good governance and bold leadership. In restoring hope, a responsible government has to remain committed to fundamental reforms and remain assertive in taking the tough yet necessary decisive action that will redound to the benefit of the governed. The opposition leader must sooner rather than later understand and appreciate that while policy decisions may not be palatable or popular, those taken by the current administration have been prudent and pivotal to the restoration of the national economy and the very hope of which she speaks.

Irrespective of which political party forms the government, the decisions taken over the past three years will undoubtedly make our economy more competitive and growth-oriented, with foreign exchange being generated and jobs being created at desired levels.

Marlon Morgan is a former parliamentary research intern and graduate fellow in the Department of Government, UWI, Mona. He is also chairman of the Jamaica Labour Party affiliated Generation 2000 policy committee and technical adviser to Audley Shaw, minister of finance and the public service.