EDITORIAL - Lethargy in privatisation

Last month, as Peter Phillips faced a public revolt against his proposed bank transaction tax to raise a mere J$2.25 billion, a noticeable absence from his projected inflows were earnings from privatisation.

Nor was there any such projection in the finance minister's previous budget, nor any of significance in the four presented by Dr Phillips'predecessor, Audley Shaw. Indeed, the Jamaican Government has, in recent years, earned little from the sale of assets.

Yet, the Government talks much about privatisation. For example, it has, via the Development Bank of Jamaica (DBJ), listed for divestment the Kingston trans-shipment port, the Norman Manley International Airport, the Caymanas Park horse racing track, the petroleum retailing company, Petcom, plus a handful of other assets. The Government's stake in the Jamalco alumina refinery is supposedly also on the block.

But privatisation, this newspaper believes, has not been pursued with the aggressiveness expected of a government which, under its economic support agreement with the International Monetary Fund, is committed to running a primary surplus of 7.5 per cent of gross domestic product as it seeks to reduce borrowing and contain a debt that is 140 per cent of annual national output.

The seeming privatisation lethargy rests, it appears to us, not only with DBJ. Other agencies, including the Urban Development Corporation (UDC) and the energy and mining ministry, among others, appear reticent in how they engage the process.

The UDC sits on a wide swathe of assets, including Dunn's River Fall in St Ann and real estate in downtown Kingston and elsewhere in Jamaica, to whose offloading it has clearly been weak-willed. It confounds us that the energy ministry not only still holds in its portfolio the Wigton Windfarm, but tendered and was awarded bids, in competition with the private sector, for the expansion of electricity-generating wind capacity.

Of course, the sale or other forms of privatisation of large, complex entities, such as seaports and airports, will require far more complex and timely negotiations, but we find it difficult to appreciate why it seems so hard to find buyers for properties such as the Bath Fountain and Milk River spas, a building in downtown Kingston, or a former orange plantation if the assets are appropriately priced and the Government is really keen on selling.

MUSCLE BEHIND POLICY

Indeed, had there been muscle behind the privatisation policy, it would, in all likelihood this fiscal year, been easy to raise substantially more than the J$2.25 billion, on which Dr Phillips' budget nearly foundered and which he may yet still find difficult to raise via the imposition of the general consumption tax on premium income paid by Jamaicans to foreign insurers.

The Government, we suggest, needs to get serious about privatisation.

Prime Minister Portia Simpson Miller deemed it important to appoint, in Luther Buchanan, a minister of state in her office, a czar for rural health clinics. He is likely to be kept busy where they are located, counting how many there are and ensuring that the health minister, Fenton Ferguson, keeps them stocked with bandages.

A czar of privatisation would, in our view, be of greater merit.

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