EDITORIAL - Discordant messengers

From a public-relations point of view, the past week can't have been the best for the finance minister, Dr Peter Phillips.

He was bombarded with scepticism by the Opposition - and others - over his ability to meet his year-end timetable for reaching an economic support agreement with the International Monetary Fund (IMF).

Additionally, quarterly briefings by the heads of the Planning Institute of Jamaica (PIOJ) and the central bank did not provide much good news - or not news of the kind that would have been welcomed by the minister's political constituents.

For instance, Brian Wynter, the governor of the Bank of Jamaica (BOJ), reported a 1.6 per cent depreciation in the value of the Jamaican dollar, a decline that was only moderated by the central bank's sale of approximately US$135 million into the market. In the process, with demand for foreign exchange outstripping inflows, the net international reserves slipped by US$236.7 million.

But perhaps more significant was the report by the PIOJ's Gladstone Hutchinson that economic growth was flat in the second quarter after its decline of 0.1 per cent between January and March. Additionally, the estimated unemployment rate of 14.3 per cent in April was 1.3 percentage points higher than a year earlier.

Unlock financial markets

Dr Phillips needs the IMF deal - to replace one that went awry under the former administration - to unlock private and multilateral financial markets. But first, he has to demonstrate to the Fund that he is making progress in meeting prior conditions such as tax and pension reforms and public-sector wage restraint. Against that backdrop, the rejection by the teachers' union of Government's wage offer and pension-reform programme would have been worryingly discordant for the finance minister.

Yet, it would not have been all gloom for Dr Phillips. He would have welcomed news that tax revenue for the first quarter of the fiscal year was running slightly ahead of schedule and the fact that he maintained a positive primary surplus. He seems on track to meet his six per cent target for the fiscal year, albeit that weak demand and a flat economy are part of the price that has been paid for this.

What is significant in all this is that Peter Phillips - despite the calls by populist bleaters for counter-cyclical policies, without saying how they are to be funded - apparently understands that he has little room within which to manoeuvre. He seems intent on sticking to his guns.

Dr Phillips' credibility, in the circumstance, is on the rise. That, however, is not enough.

For fixing Jamaica's crisis, with its underlying problem of debt, requires more than credible economic policies from the finance ministry. The solutions are as much political as economic; people have to be persuaded of the gravity of the situation and the necessity of the corrective remedies.

That is a job of communication, with the whole Government delivering the same message. We sense, however, that this is a discordant administration, or one in which most members do not want to be identified with the bad news.

Indeed, the most credible and best communicator of the lot, Prime Minister Portia Simpson Miller, seems the most reluctant to engage. That is very bad news for Jamaica.

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