By Kent Gammon
Op-Ed Contributor
The Peoples’ National Party led by the Hon. Portia Simpson-Miller, was handsomely rewarded by the Jamaican people in the country’s 16th general election, taking 42 of the 63 seats in the House of Parliament. The Jamaican people seem to have made a direct association with the current very high cost of living, caused in large part by the global financial crisis, with the incumbent Jamaica Labour Party government.
The new government has to tackle the lingering global financial crisis and a declining per capita income set against an International Monetary Fund (IMF) agreement to end in May 2012.
The first order of business is for the new government to meet with the IMF and establish new terms of engagement given the history of the PNP’s aversion to the IMF. The IMF’s representative in Jamaica, Dr. Gene Leon, sated this week quote “Jamaica is at a crossroads and the country can either choose to do something or it can choose to do nothing. Every challenge presents an opportunity, but how you manage that opportunity is an exercise in choice, and that choice is either one of action or one of inaction, but it is a choice nonetheless.” end quote.
The new government has to resist any temptations to go back to the private equity markets, not that there is much room there to operate, where the interest rates on financial instruments are bound to be much higher than when they left office in September 2007.
Placing the horse before the apple cart
The new government campaigned aggressively on creating jobs through a programme called Jamaica Emergency Employment Programme, (“JEEP”). Their mode of creating these jobs would be by employing people to, among other things, clear land and with river training techniques.
The nature of such work, not denied by the PNP when confronted with this, tends to be short term, but there must be the prospect for medium and long term job creation. The types of industries that create such jobs are technology driven industries that only come when the economy is stable and there are large pools of skilled labour.
The Jamaican economy has been stabilized over the last 4 years, albeit anaemic and highly indebted.
The new government will need to put more resources in large-scale training programmes so as to create larger pools of skilled labour.
The public sector will need to be pared down and made more efficient so as to contain the public sector debt ratio to Gross Domestic Product (GDP).
The private sector is the only true creator of real and sustainable economic growth. The PNP has not adopted this philosophy in their modus operandi, preferring to resort to their socialist philosophy of the state being the creator of jobs.
The latest ranking by Transparency International has Jamaica ranked as 86 out of 183 countries, not impressive by any means. If the country is to attract much needed foreign investment. The new government has to curb the corruption epidemic that has been setting in, particularly strongly since the 1990s, if the economy is to have a real chance of expanding to meet the demand for jobs.
And now for the bitter medicine
The current Prime Minister Honourable Andrew Holness may have been too candid in his recent campaigning that there was bitter medicine to be taken. While this may have been understood by rational-minded individuals, given the current global economic context, such candidness doesn’t resonate with individuals who are only concerned with the here and now.
The PNP know that the Jamaican people have no stomach for such fiscal discipline and riled up the Jamaican people as they know so well how to do. But there is no denying that the Jamaican economy has to resort to the IMF to get through its short and medium term financial demands. The JLP government agreed to the IMF conditions, being left with no choice when they inherited office in September 2007, and paid for the most part the political price for it that should have been to the account of the PNP.
Kent Gammon is a former candidate for the Jamaica Labour Party and an Attorney-at-law.
Note: the opinions expressed in Caribbean Journal op-eds are those of the author and do not necessarily reflect the views of the Caribbean Journal.