EDITORIAL - The PM's next step

If nothing else, Portia Simpson Miller could claim the cohesion of her Government and the country's relative stability as signals of achievements of her nearly two years as prime minister. Indeed, she could even make a case, credibly, that in the circumstances, with a leader other than her, things might have fallen apart.

Yet, Mrs Simpson Miller, if she holds her nerve, resists the populists, and leverages the special talents that have brought her success so far, could be on the verge of something far greater: placing Jamaica on a path to economic transformation and sustainable growth.

Mrs Simpson Miller's success, thus far, has to be appreciated against the backdrop of Jamaica's economic crisis and what is being done to put it right. The crux of the problem is Jamaica's debt of J$1.8 trillion, or over 140 per cent of the value of goods and services the country produces in a year. Even after restructuring of the domestic portion, this fiscal year, it will cost the Government J$316 billion to pay interest and principal on the debt, which is over 40 per cent of its budget.

Looked at another way, debt servicing was expected to consume 88 per cent of the Government's tax revenue, but the ratio is likely to be higher, given that collections are falling behind projections. Even if the Government meets its target for taxes and grants, that will be able to cover only 58 per cent of the salaries of its employees, a freeze on wages notwithstanding.

Contractionary and Painful

It is in that context, and with few willing lenders, that the administration, under its agreement with the International Monetary Fund, is implementing an austerity programme aimed at bringing the debt under control. The Government has had to raise taxes, spend less, and borrow less. The programme is both contractionary and painful.

It says much about Mrs Simpson Miller's well-honed emotional intelligence, her empathy and ability to communicate with the majority of Jamaicans that the programme, despite its limited cushion for the most vulnerable, has not triggered the upheavals of some countries forced into austerity. Yet, the programme of reform is not over, so Mrs Simpson Miller cannot afford to flinch. Rather, her job now must be expanding her engagement, mobilising the country for the projects that remain outstanding.

Part of this effort includes articulating the Government's fiscal measures, which will not of themselves grow the economy; they will lessen the Government's appropriation of resources that ought to be available to the private sector for investment and job creation.

The Government, however, has to ensure that the environment is conducive to the private-sector activity.

One critical activity in this regard is the 360-megawatt electricity project to deliver cheaper energy to the country. Mrs Simpson Miller must ensure that the process is pursued with transparency and efficiency. The reform of education to ensure better outcomes in schools and better returns on taxpayers' investment is also crucial.

But most important and urgent is the overhaul of the public sector and the dismantling of bureaucracy, and the development of a state that is a willing and eager facilitator of enterprise, rather than being suspicious of private capital.

If Mrs Simpson Miller has the will to drive hard in this direction, put the country back on the track of economic growth and development, her legacy will be ensured for all times in Jamaica.

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