EDITORIAL - No to silence in the face of crisis

The Jamaican electorate must be wary of the slithery tongues of the pedlars of snake oil. Their products cure nothing.

Which, in the case of Jamaica, is the larger point to be taken from John Rapley's column in this newspaper Monday, reflecting on the collapse of the Greek and Italian governments because markets lost confidence in the capacity of their leaders to steer them out of financial crises.

Said Rapley, who is now a research associate at the London School of Economics: "For too long, politicians in democratically elected states have used credit to boost their popularity with voters. Who would say no to free health care, generous pensions, government jobs and new roads?"

In the case of Greece, the government's debt reached more than 150 per cent of gross domestic product (GDP). For Italy, the ratio is close to 120 per cent of GDP.

With the large public-sector deficits being run by Athens and Rome, their creditors demanded high borrowing premiums and, in some cases, even bolted from their bonds. The upshot is that both countries have been forced by their partners in the euro, fearful of being dragged down by the recalcitrants, to take strong curative medicine.

Time to remove the blindfolds

Jamaica has long avoided its own, convinced by the confidence tricksters and their sidekicks that things are not all that bad. Except they are.

The government debt, officially at $1.6 trillion, is 130 per cent of GDP, or nearly a third more than the value of all the goods and services produced in the country. The debt figure, though, does not capture some off-book obligations.

Put baldly, Jamaica's debt is unsustainable, as our Government has been warned by the International Monetary Fund (IMF) and the rating agency, Standard & Poor's. The IMF has insisted on adjustments to the Government's finances as a condition for its continued support.

This means the Government must either bring its spending closer in line with its income or earn more. Or, more practicably, both. The public sector will have to be rationalised, which will include job losses, restructuring its non-contributory pension scheme, as well as reforming the tax system to bring more persons into its net.

None of these will be easy, or without pain, the arguments of the carnival crowd notwithstanding. Political leaders, however, are unwilling and afraid to tell the truth, for fear they will face a penalty.

Thinking Jamaicans must speak out

And that, in part, is the failure of thoughtful Jamaicans, who have failed to speak out. Indeed, the country's debt didn't just materialise, but is the result of decades of artless borrowing by successive administrations, whose investments did not produce incremental output or income. They borrowed some more to cover past bills and to accommodate a lifestyle that was unaffordable.

It ought to be apparent, despite the attempt by politicians to skirt the hard issues in this election campaign, that the reckoning is imminent. Thinking Jamaicans must not stand for it.

We will be asked to shoulder high taxes, fewer government services and a social safety net with less cushion - the price for our silence of the past. Thinking Jamaicans have to end this silence, demanding of the Government its strategy for dealing with the crisis, the alternatives of the current Opposition, and how either party, if it ends up losing the election, will contribute to the rescue.