Mark my word, Peter will be back

Ian Boyne, Contributor

It would have been hard to ignore the torrent of protest and fiery opposition that followed Peter Phillips' announcement of the withdrawal tax, and if the finance minister thought that announcing it on the eve of the most solemn weekend on the Christian calendar would cause Jamaicans to forgive him, he was dead wrong.

Indeed, what awaited him was his own crucifixion. Last Wednesday, he rose from political death when he withdrew his despised tax proposal. His reasoning made political sense: He needed the people's support for his tough economic reform programme, and he could not risk divisiveness and street protests at this crucial time of the International Monetary Fund (IMF) programme. And Jamaica Labour Party Leader Andrew Holness had signalled that his nice-boy, well-behaved Portia's son's days were over and that he had now come of age and was ready for road. Peter could not risk that. Had he not bowed on Wednesday, the Government would have two major crises to deal with this weekend, not one.

And Peter can't take any chances with his political future. Better to risk the economics than the politics. For he won't get anywhere near that $2.25-billion he needs from those hard-to-track-down taxes he substituted last Wednesday. You mark my word. He will have to come back to us for more taxes down the road (where he kicked the can), but perhaps, by then we will cool down.

We have to give credit to ourselves as a people. We have taken a lot. When you look at the various tax packages we have absorbed without a whimper of protest; when you look at the various austerity, band-your-belly, bite-the-bullet programmes we have endured, with very little to show for it, we have been a supremely patient people. We have absorbed a lot. That withdrawal tax was the straw that broke the camel's back.

More taxes are coming

But whether we think we have reached our taxable limit or not, one thing is sure: That limit will be stretched, for more taxes are coming if we are not to continue on our borrowing binge - though, as the minister has been pointing out, the international capital markets are tired of us. That's why we have gone to the banker of last resort, the IMF. The fact that Jamaicans will increasingly have to get into their heads is that it is the IMF that has the upper hand in any negotiations with any of our governments.

Our political leaders are merely reacting to external influences. Whether you start your analysis from 1991 when we liberalised the foreign-exchange market prematurely, as Edward Seaga has always charged; or start from our financial meltdown a few years after, as the opposition leader spent much time doing in his Budget presentation; or whether you look at what happened in those "four missing years", as Prime Minister Portia Simpson Miller did last week in her parliamentary address; or focused on what happened between 2010 and 2012 when the Golding administration abandoned the IMF programme, as Phillips did Wednesday, we are merely reacting to external influences.

It was instructive to listen to Peter Phillips' closing the Budget Debate last week. He showed how the severity of the adjustment is directly related to the JLP's abandoning the IMF programme in 2010 and closing off significant multilateral funding which could have come in. But it was not because the JLP was wicked why it abandoned the programme. Nor was it, in my view, because it was just maliciously reckless.

JLP's
gamble

The JLP realised the pain those measures would
have caused the people. It could not afford, politically, to implement
those harsh measures so close to an election. So it called the election
early, hoping to get a mandate to administer the bitter medicine. But
the JLP lost its gamble and the People's National Party Government could
not get a programme going early because the IMF had a
once-bitten-twice-shy attitude towards Jamaica.

The
JLP was trying to postpone the pain. The same thing the minister did
when he applied his own withdrawal method on Wednesday, backtracking
from his previously announced no-escape withdrawal tax. The people
decided that the pain would have been too much and the minister could
not afford to risk continuing anger from the
people.

Bruce Golding, now out of the political
hustings, could see clear enough to tell a New York audience last year
that if Jamaica were to grow, it would have to experience "even greater
pain". And this, he said, would require "extraordinary followership -
one that will recognise and eschew glib political rhetoric in place of
the unvarnished reality of our predicament and the imperatives we
embrace. People cannot be fooled unless they allow themselves to be
fooled".

Harsh reality

Our political
leaders respond to us and our urging, just as Peter Phillips did. I am
happy not to pay it now. But I know I will pay later - and higher - when
the chickens come home to roost. When tax revenues fall woefully short
again this fiscal year because these two substitute taxes are not
collected, I will be asked to pay some easily collectible taxes. Our
people will simply have to take a hard, cold look at the realities that
stare us in the face and analyse what is plainly hidden in sight.
Golding, in that Caribbean International Network (CIN) lecture in New
York, talked about a Jamaica "where followership will abandon its
yearning for messiahs - God-like figures that will put us on their backs
and take us to the promised land". He advised then that "the Government
must be bold enough to take the rough decisions it considers necessary
and ... get on with it".

You can always be cynical and
say why he didn't do it in 2010. Go on. That does not negate the truth
of his statement. But Golding knows that when you are in the hot seat,
the temptation is to postpone the hard decisions, and not always just
for political expedience. For it makes good sense to survive another day
to fight for economic development.

What seems clear
to me is that the sooner we understand what we are facing and that we
are in a hostile international economic environment, the better. Andrew
Holness' telling us it's the PNP's fault and focusing on those FINSAC
years; Portia's wailing about those woeful missing years; and Peter's
telling us about what was abandoned and did not happen in 2010-2012, do
not help us in the final analysis. Economic sovereignty is still out of
our hands, and our masters are overseas.

I hope the
IMF sees the revolt on the plantation and is prepared to allow some
adjustments to the programme it has given to the overseers. One
potential value of the withdrawal protest is that the IMF might see that
people are reaching their limit and have had enough, and the fund
might, indeed, ease the pressure a bit on the Government. In this way,
the people's protest may have helped Peter Phillips, after all. We will
see.

Ian Boyne is a veteran journalist. Email
feedback to columns@gleanerjm.com and
ianboyne1@yahoo.com.