EDITORIAL - Be open on IMF agreement

If last week's statement by Mr Audley Shaw on the status of Jamaica's negotiations with the International Monetary Fund (IMF) was aimed at convincing people that things are on track and heading towards a fine outcome, we would say to the minister that his effort fell well short of the mark.

Our observation is not to suggest that the minister is not right about what he sought to imply. Rather, there is need for more information, with greater clarity, if he is to be credible.

Minister Shaw, and the administration more broadly, would understand the context of people's scepticism.

First, the administration was early in trumpeting the outcomes of the first two quarterly 'tests' under Jamaica's US$1.27-billion standby agreement with the Fund. Jamaica 'passed' those.

However, the administration has been less than forthcoming about the results of the reviews for the quarters that ended December 2010 and March this year.

Initially, there was speculation that the December economic targets were not met. But the administration then announced that reviews for the two quarters would be bundled into one, the result of which both Jamaica and the IMF said would have been ready by June. That has not happened. Moreover, a third quarter, to the end of June, has been completed.

In meantime, as speculation swirls about the status of the agreement, the administration has spoken vaguely about extending the life of the arrangement, which was what many analysts had proposed when they first raised the idea of an IMF facility.

Not so fast, Mr Shaw

Mr Shaw's statement appears to infer that the completion of negotiations with public-sector workers for the clearing of outstanding salary arrears - a ticklish matter with the IMF - had gone a good way in establishing the parameters of an agreement with the Fund.

"Good progress has been made toward identifying measures to achieve the agreed primary surplus of the central government" for the current fiscal year, the minister said. That surplus is, or was to have been, $69.26 billion, as part of an overall public deficit of 4.6 per cent of GDP.

But that, apparently, is not all. There still have to be negotiations with public-sector unions on a strategy to bring salaries from nearly 12 per cent of GDP to nine per cent, by 2016. Tax-reform issues also have to be addressed.

We expect that Mr Shaw will assume that there is now sufficient information in the public domain to blunt negative speculation and to build confidence that the administration is on the right track. In this regard, he is misguided. First, it has taken several months to extract this basic information. Second, what has trickled out is, at best, opaque, demanding too much filtering to be coherent.

We understand, if we do not agree, some of the concerns that have driven the reticence towards openness by the Golding administration. It fears that opponents, in the nature of domestic politics, will exploit the fact that the IMF agreement has fallen off the rails and the economic miscalculations it will be forced to admit.

What is more important, though, is for the administration to rally Jamaicans behind a recovery agenda, starting with telling people the truth and leading a consensus around an economic programme.

Waffle and prevarication won't do.

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.