That 'Blooming' Portia statement!

Ian Boyne, Contributor

The fiery controversy over the prime minister's reference to Greece in that Bloomberg interview has died down, but the release of the transcripts reveals that she made some other noteworthy statements which have so far not generated any comment in the media.

The prime minister has clearly signalled to the International Monetary Fund (IMF) that Jamaica should not be assessed purely on macroeconomic criteria, but also in terms of the need for social equity and the protection of the vulnerable. In fact, the thrust of her controversial statement, which was blown out of context, was that a country like Jamaica needs special consideration from the IMF and the developed world in light of its challenges to adjust to the global economic crisis and its socio-economic status. Of course, Bloomberg is the last place you would want to take that message, as it is the mouthpiece of the international financial elite which sees nothing but numbers.

But the PM was determined to speak and to send her message to those who have ears. "I would really love to see the IMF take into consideration that while trying to balance the books - that's very critical and important - we should at the same time try to balance people's lives."

She continued: "A struggling country like Jamaica ... if we could get something, if we could get some consideration from some countries, IMF or otherwise, then we would be on our way to growth, development and progress." This was exactly what her former Comrade leader, Michael Manley, struggled for when he made his clarion call for a New International Economic Order. But Bloomberg's audience would see this as reckless Third World fantasy and perhaps another sign that Jamaica is not really ready for serious internal reforms; rather, it is looking to others to bail it out.

Misguided views

There are many here who hold that view also, and who feel that all Jamaica needs to do is to get its own house in order, "take the hard decisions", "bite the bullet", deal with production and make Jamaica business-friendly and then "watch Jamaica grow". The neoliberal vision. I believe that is a misguided view, as regular readers know.

Jamaica certainly needs to pursue fiscal prudence and it needs to remove macroeconomic distortions. But unless the IMF team now in Jamaica is prepared to negotiate with Jamaica pragmatically and realistically, rather than follow its usual theological dogmas, meaningful growth will continue to elude Jamaica. Oh, yes, we will be able to pay back our debtors and achieve certain macroeconomic targets. But, Lord, have mercy, the poor will feel it!

Portia understands this. She told Bloomberg, significantly: "And what I am hoping is that the negotiators of the IMF will take what she's (IMF Managing Director Christine Lagarde's) been saying into consideration in terms of looking at countries that are suffering tremendously and that people are hurting."

Of course, the IMF has no such concern, blinded as it is by its dogmas and macroeconomic rituals. Prime ministers can only plead. They have no power to compel the IMF to follow logic or to think about what economic growth is really for.

But those with no inflexible dogmas to defend must make their voices heard and must bring reason, research and rigour to bear on public discourse.

In that regard, I was extremely delighted by the intervention last week of the Jamaica Civil Society Coalition, which made a highly cogent presentation to the Special Select Committee of Parliament looking at tax reform. The presentation was a model of eirenic reasoning.

The paper presented began with a quotation from Bishop Robert Thompson, who wrote in a recent Sunday Observer column: "If our economic and monetary policies are shaped by market forces alone ... with little regard to the social reality of the marginalised, no one in the long run benefits ... the poor must be seen as part of the social capital for national development."

And as though that were not enough to establish the Coalition's philosophical foresight, long-time social activist Horace Levy, who made the remarks before the committee, hit the entire tax-reform proposals at its philosophical roots. "We wish to see social equity placed alongside growth, so that the two together form the joint objective of the whole reform, the overarching perspective guiding it."

I had told you before that under Carol Narcisse's leadership, this group was shaping up to be a most potent force, intellectually and socially, being a truly non-partisan voice in the society. (They will be sorely needed now, with so many who were formerly critics of the State now complicit with it.)

Levy went on to make a profound philosophical point: "We recommend, therefore, that the Green Paper should explicitly acknowledge in its preamble the wider societal context, concerns and realities - we live in a society, not an economy." Profound, profound point not lost on those acquainted with the development literature. The IMF itself was originally set up not only to deal with price and exchange-rate stability but also with employment expansion; however, it has lost its way over the years, succumbing to a more narrow agenda and exhibiting a monetarist fetish.

BALANCED AND NUANCED

No one could accuse the Civil Society Coalition of making "old-fashioned, knee-jerk ideological claims for rich corporate interests looking out for their own at the expense of the poor," as The Gleaner, predictably, dismissed critics of the Private Sector Working Group's (PSWG) recommendations in last Tuesday's editorial. No, the Coalition was balanced and nuanced in its report. It started by commending past and present governments, as well as the private sector, for their commitment to tax reform.

The Coalition even advises the Government and the private sector to build a wider consensus to sell the tax-reform package.

Levy gave good advice to the committee: "As the voices of opposition to the removal of GCT exemption get louder, it will be critical for Parliament's tax reform to set out clearly the benefits to the poor, naming specific categories, both directly and through increased tax intake, that can be ploughed back into education, health and general social welfare. The 'selling' of tax reform is not be easy. But it is absolutely necessary." So these are not people giving knee-jerk reactions against hard-working business people, as supposed.

The Coalition, like me, expresses strong reservations to the removal of general consumption tax (GCT) exemption from basic foods and goods and recommends a phased, one-year implementation schedule for removal. Like me, the Coalition is concerned about the mechanisms to replace the GCT exemptions for the poor, and says, sensibly: "A phased removal, we urge, would give time for the mechanisms for increase and other needed changes to be put in place."

The Coalition has done what the PSWG has not done publicly, which is to pay attention to the replacement mechanisms for the poor. The PSWG also seems to underestimate the challenge involved in the State's efficiently designing a system to compensate the poor. Levy told the parliamentary committee that the Coalition was also concerned about other poor and vulnerable Jamaicans who are not direct beneficiaries of the Programme of Advancement Through Health and Education (PATH).

"These are especially the 690,000 persons who make up the rest of the population of 1,080,000 million ... the 40 per cent of the population with the lowest incomes." And while the PSWG has adduced figures to show how the wealthy consume most of the subsidies ostensibly designed for the poor, the Coalition adds the significant fact that: "According to the Survey of Living Conditions, these (poor) households, the majority of them headed by women, spend nearly three out of every five dollars on food."

And the Coalition's written submission says: "Data from submissions by the private sector suggest that only minor increases in expenditure would be experienced by the poor with the removal of GCT exemptions. The data do not reveal the reality of consumption patterns - the number of repeat purchases of exempted goods in a given day, week, month, year, and therefore the real cumulative costs as a percentage of income of the poor/working, poor/lower middle class. This income has limited or no elasticity."

It is this kind of careful nuancing which characterises the Coalition's paper and its presentation last week.

This is what is needed: A calm, sober, data-driven and philosophically sensitive discussion on economic-development issues. A very important, if at times heated, exchange took place in Parliament two weeks ago. Audley Shaw and Andrew Holness were at their best in questioning and critiquing Finance Minister Dr Peter Phillips. Audley debunked the view that the JLP Government was fiscally irresponsible. Phillips had talked about the country losing credibility with the IMF because of delays in the programme. The PNP has lambasted the JLP for not moving apace with the IMF programme, but let us gauge its eagerness - in applying the IMF's bitter-medicine prescriptions.

JLP blunder

Andrew Holness asked Phillips some poignant questions. For when all the propaganda is over, Phillips and his Government will have to face the hard issues the JLP faced in dealing with the IMF. I reject the view that the JLP Government was fiscally reckless. Phillips was right: The JLP blundered significantly to design an IMF programme without factoring in agreements it had made with workers. But it was generally fiscally prudent.

But I rather suspect that the JLP was stalling in the interest of the people and, yes, its own popularity, too - but the two happened to coincide. Let us see whether this PNP administration will rush into any new IMF agreement and let us see what it is willing to do that the JLP was not.

For if the prime minister is as concerned about balancing people's lives as the IMF is about balancing the books, this PNP Government would have to be as reluctant to sing the IMF tune as the JLP was. I believe the JLP was unfairly criticised on economic management and performed better than it was given credit for.

Phillips said recently in Parliament that his Government was prepared to "undertake the necessary actions and commitments to rebuild our credibility" with the IMF. He had better know what that will involve.

Ian Boyne, a veteran journalist, is the winner of the 2010-2011 Morris Cargill Award for Opinion Journalism. Email feedback to columns@gleanerjm.com and ianboyne1@yahoo.com.