The 2019/20 budget, by-election and Buju Banton

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The 2019/20 budget debate enters its second week tomorrow in a climate of heightened political interest generated by the current campaign for the Portland Eastern seat left vacant by the killing of Member of Parliament (MP) Dr Lynvale Bloomfield.

Visitors, especially Diaspora Jamaicans, should be happy that the by — election activities are taking place some 31 kilometres from the capital city, Kingston as the re-release of an overused travel advisory from the US State Department last week curiously warned visitors to avoid:

* walking or driving at night;

* public buses;

* secluded places or situations, including in resorts;

* physically resisting any robbery attempt;

* to be aware of their surroundings; and

* keep a low profile.

Well, they certainly were not keeping a low profile in places like New Kingston, where restaurants like KFC, Burger King and Island Grill were attracting large numbers of customers, nor on the city’s roads and public transportation where their presence was obvious and very revealing of their determination to demonstrate their familiarity with the local culture and infrastructure despite the advisory.

The presence of so many visitors for a single night’s show at the National Stadium featuring the irrepressible Buju Banton may have suggested to Minister of Culture, Gender, Entertainment and Sport Olivia “Babsy” Grange the need to remind the Minister of Finance and the Public Service Dr Nigel Clarke of the value of entertainment to the economy and his growth momentum, as well as the possibility that a few more concerts like these in the city, annually, could add to the economy.

But, a couple days after the frolic, the fact is that the country must return to serious business and none so demanding as the resumption of the annual budget debate at Gordon House, as well as the need for the by-election campaigning in Portland Eastern to be conducted, not only peacefully, but in a cerebral atmosphere.

The campaign itself, while not violent as some people might have feared, seemed to have lost some intellectual clout, especially in a context where one candidate is being caricatured as plain and simple and the other as bright and messianic.

In a situation like this, it might be wise to recall the words of Max Ehrman’s Desiderata:

“As far as possible, without surrender, be on good terms with all persons. Speak your truth quietly and clearly; and listen to others, even to the dull and the ignorant; they too have their story. Avoid loud and aggressive persons; they are vexatious to the spirit. If you compare yourself with others, you may become vain or bitter, for always there will be greater and lesser persons.”

Although the by-election has been generating a great deal of excitement in and around Port Antonio, it will certainly have to play second fiddle to the 2019/20 budget debate in Parliament, which must be one of the most important in our history, considering that about six months from now Jamaica will be released from the current Precautionary Stand-By Agreement with the International Monetary Fund (IMF), and will no longer have a loan-generating or non-loan generating agreement with the fund for the first time in several years, raising some serious issues to be discussed in the interim.

It is fortunate for us that as we face these challenges, we have been able to produce two highly qualified, ambitious and courageous financial spokesmen in Dr Clarke and the Opposition’s spokesman Mark Golding.

Dr Clarke gave the House of Representatives a futuristic view of what the budget debate should be and will be like in the future: No longer an exercise in which the minister tells us how much we need to pay down the debt and meet its recurrent and capital expenditures over the next 12 months but, most importantly, how we plan to use the resources in a way that will generate more growth and encourage research and development in creating the structures which enable development.

As a member of the media, I must confess that I have come to respect Dr Clarke’s intellect and vibrancy in how he asserts himself in this new role as a member of parliament.

It was classical that in his very first public address to Jamaica in 2018, he gave an indication of where he was headed: towards a Jamaica that was not only politically independent but also economically independent, as the late National Hero Norman Manley is credited with urging during the early years of independence.

As Dr Clarke noted in his first annual budget opening speech two weeks ago:

“It is inconsistent with the Jamaican identity — our identity — of a proud and independent people with a message for the world. Yet for my generation, all we have ever known is life in and out of structural adjustment programmes with the international community. It falls to my generation — our generation — to change that.”

Dr Clarke is convinced that 30 months into the 36-month-old Precautionary Stand-By Agreement, Jamaica is set to complete its engagements under the programme, having fully lived up to its commitments.

As far as he is concerned, the economic reform programme has delivered for Jamaica, is delivering and will continue to deliver for the country, which is headed in the right direction.

“For these reasons, the fundamental essence of Jamaica’s economic reform programme will be maintained, even when our agreement with the IMF ends,” he said, assuring that the nation is past the period of puberty and is now fully adolescent and emerging as an adult ready to stand on its own two feet.

It was a pity that the Opposition could not have been less cynical about his opening stand when they responded, but our politics does not allow that and, with the scent of elections in another 24 months, spent so much time reiterating their contribution to Jamaica achieving this feat, as if any Jamaican would have considered that it was entirely the work of only one of the two major political parties.

Golding charged that, despite having a Ministry of Economic Growth and Job Creation, headed by the prime minister, the current Administration had failed badly at “continuing the successes of the past Administration in improving Jamaica’s world ranking for Competitiveness and Ease of Doing Business”.

He accused the Government of an inability to drive growth-inducing reforms, to make Jamaica’s climate more business-friendly which, he said, was clearly having negative consequences for Jamaica’s international competitiveness.

“This Government’s poor performance in this vital area of reform has been a contributor to the disappointing growth results that we have been seeing,” he said.

In light of these failures, he was convinced that the fact that all this was happening under the Government’s watch, was evidence that the country was moving in the wrong direction.

In fact, he described the JLP Government as a “Chaka Chaka Government, which does not have what it takes to transform the system”.

Yet, that is a bold statement from one of the two major parties, considering that they have been in-and-out of government for the past 56 years. Both parties should really be sharing the blame for the successes as well as the failures, bearing in mind that the PNP has spent 30 years in Government in comparison to the JLP’s 26 years.

It is obvious that Golding has a point, but the distribution of blame could have been much more even.

For example, in February 2010, the Bruce Golding Administration and the IMF entered into a 27-month agreement to seek assistance in coping with economic challenges brought on by the global financial crisis of that period.

According to the Caribbean Policy Research Institute (CaPRI) many of these challenges were the result of long-standing structural weaknesses which, added to the global financial crisis, had seen the Government being unable to unilaterally introduce recovery programmes and other measures to respond to the crisis.

Among these were the crippling debt; falling earnings and exports in bauxite and alumina; rising unemployment; and a public sector deficit of 13 per cent of GDP (2009/10).

A total of US$1.27 billion was promised under this fund, with US$640 million being made available immediately.

The country managed to obtain some stability in its financial market, due to the restructuring of much of its public debt under the Jamaica Debt Exchange (JDX). Gains were also made in tax administration. However, none of these measures were sufficient by themselves.

The PNP returned to Government in 2012 and, under a new Extended Fund Facility (EFF) agreed in 2013, started renewed, post-global financial crisis efforts to get the economy moving again.

Those measures appeared to be working, however slowly, but in the meantime there came a general election which resulted in a change of Government. Fortunately, however, the new Government was objective enough to continue its predecessor’s economic programme, albeit the Administration changed to a new IMF programme called the Precautionary Stand-By Arrangement.

Interestingly, the leader of the opposition, Dr Peter Phillips, commended the current Administration for “maintaining fundamental aspects of the economic reform programme which they inherited from us” during his presentation last Thursday.

He said that the progress made by the programme has continued in the following areas:

* The debt has been reduced;

* Job creation has continued;

* Economic growth has been maintained; and

* Revenues are up.

He said that he had noted, with particular satisfaction, the increase in revenues that has come as a result of much-needed comprehensive tax reform that his Government put in place, strengthening the powers of Tax Administration Jamaica (TAJ), as well as passing legislation to allow access to “third party information”, introducing transfer price rules and measures to incentivise the productive sectors and improving the rate of return on investments.

“The role of the economic reform programme, together with the sacrifices by the Jamaican people to restore Jamaica’s financial stability, should not be taken lightly,” Dr Phillips suggested.

However, he insisted that “an objective assessment of the budget shows that it allocates available resources in a manner which deepens and not reverses this inequality in the country”.

He suggested that it is the PNP which is committed to building a more equitable society, in which poverty and social marginalisation would no longer be the reality of the majority, “while a chosen, connected few enjoy prosperity”.

In a more discreet way than Golding, Phillips argued that “it has always been the mission of the PNP — beginning with Norman Manley and carried more passionately during the prime ministership of Michael Manley and sustained by the succeeding leadership — to create a more equitable society.

“Equality and social justice have been the guiding light of the People’s National Party; and it remains so, today,” he said.

Golding had warned of the consequences of Bob Marley’s lyrics that peace and harmony could not exist “until there’s no first-class and second-class citizens of any nation”; and Peter Tosh’s warning that there could be no peace without equal rights and justice.

It was also interesting how Golding twice noted the difference between his reaction to the huge benefits of the Government’s $14-billion giveback revenue package to his clients as a corporate lawyer and investment broker, as against what he saw as a lack of benefits for his constituents in inner-city St Andrew Southern.

Golding claimed that the package was the most “regressive tax system” in his living memory.

But Clarke insisted that growth and equity are not mutually exclusive.

“Rather, they go hand in hand, and are mutually reinforcing. Higher levels of growth provide the means through which greater levels of equity can be achieved,” Dr Clarke said.

“Greater societal equity increases the productive potential of our people and fosters greater social harmony, both of which are conducive to higher economic output,” he stated.

“We need equity for all for all Jamaicans. However, we often speak about equity from our own perspectives without recognising the legitimate equity aspirations of others or of the broader public good,” he added.

Prime Minister Andrew Holness will be the speaker when the budget debate resumes tomorrow. The House sits at 2:00 pm.

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