EDITORIAL - Mature signal on the IMF from PNP

WE DO not believe that the People's National Party (PNP), like the Government, has as yet gone far enough in articulating the depth of Jamaica's fiscal crisis and the tough choices that will have to be made if the country is to be rescued from its economic miasma.

Nonetheless, we sense that the parties are now appreciating that it cannot be business as usual, and have begun an attempt to sensitise the electorate to the situation. In the historic context of Jamaica's competitive politics, this is an advancement, which many might regard as substantial.

It is against that backdrop that we note and welcome yesterday's statement by Peter Phillips, the PNP's shadow finance minister, committing the party to negotiating an extended fund facility with the International Monetary Fund (IMF) should it form the government after the general election later this month. Significantly, the PNP has conceded that in this hostile global economic environment, in which financial markets are unlikely to be too welcoming of Jamaica, an agreement with the Fund is crucial to this country's economic stability.

Said Dr Phillips: "This agreement will be based on the establishment of credible, predictable and achievable macroeconomic targets that would inspire confidence among local and international investors and stakeholders."

important undertaking

The undertaking is important on two levels. Notwithstanding the several agreements between past PNP governments and the IMF, the party carried them unwillingly, often with a sense of resentment towards the Fund. The devil is in the detail. There, however, was a sense of pragmatism among the PNP spokesmen in this concession to the electorate about Jamaica's circumstances.

Second, it came on the heels of the equivocation by the finance minister, Mr Audley Shaw, on whether the Jamaica Labour Party, if it returns to office, will maintain a borrowing relationship with the Fund or opt for either an Article 4 consultation or intensified surveillance. This was, at best, a mixed signal from the Government that could spook the rating agencies and financial markets that are not now too receptive to borrowers with the profile of Jamaica. Moreover, Mr Shaw has the current lesson of withheld cash from bilateral and multilateral agencies because of Jamaica's fractured standby agreement with the IMF.

ill-advised grandstanding

Perhaps, though, the finance minister was engaging in a bit of ill-advised grandstanding, borne of misapprehension of the realities of the global environment, the role he occupies or the signal he sends when he speaks. The Government must clarify its position on a future IMF deal.

In any event, this issue and Jamaica's economic situation, more broadly, underline the need for technical proficiency, as well as skilled and prudent management at the Ministry of Finance, the existence of which has been insufficient. This has been evident in the generally poor management of the Jamaican economy over several decades, inclusive of the missteps of recent vintage. The poor oversight of the Jamaica Development Infrastructure Programme is a howling example.

The Government may not, within its elected ranks or the civil service, have a sufficiency of technical and managerial talent to grapple with all the difficulties that confront the country. To address this deficiency, the leader must not be afraid to bring skilled people, including from the private sector, to the political executive via the Senate.

The Government should also be ready to recruit technical skills from among the Jamaican diaspora, or wherever it is available.