EDITORIAL - Grabbing the good news

In an economy long starved of good news, recent developments are not only welcome, but, hopefully, will encourage our Government to continue along the course upon which it has embarked.

This week, the Planning Institute of Jamaica (PIOJ), echoing the sentiment of the central bank, reported that after six consecutive quarters of stagnation or decline, the Jamaican economy grew for the three months to the end of September.

That growth was modest and fragile - a mere 0.6 per cent. But more important is what it may portend; that we, finally, are emerging from recession.

Indeed, the PIOJ estimates that for the current quarter, the economy could advance by up to 1.5 per cent, although its director general, Colin Bullock, offered a proviso.

" … Until the tendency to growth strengthens, it remains susceptible to reversal if there are any sufficiently adverse social or economic shocks," Mr Bullock said.

The critical issue, therefore, is how to avoid the kind of shocks feared by Mr Bullock. Which brings us to the next bit of recent good news.

Just ahead of the announcement of the growth, a team from the International Monetary Fund (IMF), in town to assess Jamaica's performance under an economic support agreement with the Fund, confirmed that we had passed the second quarterly test.

On the quantitative side, we did better than required in keeping the fiscal deficit in check, our bad current account numbers are better than a year ago, and we were on target with the net international reserves. Additionally, Parliament has passed legislation that, effectively, lower input and transaction costs for firms, and importantly, remove the incentive regime from the discretion of politicians.

These cannot have been easy undertakings, demanding fiscal restraint of a kind that Jamaican governments have not had the discipline to maintain. They will only get tougher if the administration is to meet its target of a primary surplus of 7.5 per cent of gross domestic product, crucial to its strategy for reducing a government debt that is over 140 per cent of national output.

NOT THERE YET

In that regard, the behaviour of the Portia Simpson Miller-led Government has been admirable. But the administration must appreciate that it still has a long way to go with this IMF programme and that an absence of vigilance will invite the kinds of concerns raised by Mr Bullock and shared by this newspaper and others.

Indeed, fiscal prudence and a lessening of competition with the private sector for capital do not represent the end of the project to encourage economic growth. These efforts must now be girded by the untangling of red tape and bureaucracy, making it easier to do business in Jamaica.

The aim must be the creation of a public bureaucracy that understands, and believes in its role as facilitator of enterprise.

But we understand, too, that economic growth - or creating the environment thereto - is not only the job of the Government. The private sector, too, has to join the party.

Our hope is that the administration's fiscal discipline, thus far, its rolling out of a friendlier tax regime, and the recent glimmer of growth will help lift firms out of their funk and bolster private-sector confidence, leading to investment and job creation.

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