EDITORIAL - PM's encouraging stand on economy

This newspaper is encouraged by the tone and posture of ownership of Jamaica's economic policy that is increasingly being adopted by Prime Minister Portia Simpson Miller in the face of pushback by critics, who, if allowed their way, would undermine the programme.

There is, of course, no question that the majority of Jamaicans face tough economic times as the Government implements the austerity measures required by its agreement with the International Monetary Fund (IMF).

In the circumstance, it would be easy for the administration - and Mrs Simpson Miller - to play to populist antecedents and blame it all on the Fund. We have been on that road before. Ultimately, it led to nowhere.

It is against that backdrop that the prime minister's remarks at the stock exchange's investment conference on Tuesday have deep resonance with us and ought to be applauded by those who wish Jamaica's emergence from its economic crisis, and appreciate Mrs Simpson Miller's potentially great value in this effort.

She said: "My administration does not, in any way, seek to resile from taking responsibility for the tough decisions which had to be made. We have not presented these decisions as being impositions by the IMF. That would be a cop-out.

"Whilst we may disagree with the Fund in terms of the pace of some of the adjustments, we accept that the adjustments are necessary."

IMPORTANT STATEMENT

That statement is important on several fronts.

First, it represents a renewed declaration of the administration's commitment to the policies, which, we take it, include the Government's pledge that it would not be swayed by political considerations as it faces the inevitable election cycle.

Additionally, we read into the prime minister's declaration an undertaking to allocate some of her immense political capital in rallying public support for the economic project and ensuring its ultimate success. This is important, for no one in the political arena rivals Mrs Simpson Miller's talent for effectively communicating with the majority of the Jamaican people.

By rallying her natural constituency, the prime minister brings an additional value. She weakens the opportunity for a new wave of Keynesian extremists gaining purchase with the majority to orchestrate the overthrow of the economic programme.

FACING REALITY

Jamaica was forced into austerity because, for too long, we borrowed too much, running up a debt that was one and a half times the value of our annual output, which became too burdensome to service. Further, no one was willing to lend us any more money - at least not at rates we could afford.

The Government is being forced to spend less while attempting to have more people pay their fair share of taxes and, at the same time, reform the economy to make it more globally competitive. The schemes to reduce corporate income tax and general lower-factor costs are moves in the right direction, even though there is much more to be done.

The policy extremists, however, would insist that a broke Government engage in 'stimulus' spending and provide other ill-defined benefits for industry. What is not revealed is how these mostly nebulous programmes are to be funded, except, perhaps, it is assumed that Jamaica's is a powerful economy, with a dollar that is globally a reserve currency, to which people are willing to lend at low rates of interests even as it rides out an economic hump.

That, though, is not the reality.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.