Prime Minister Bruce Golding and his finance minister, Audley Shaw, have been wisely attempting to temper public expectations about the budget that Shaw will table in Parliament this week.

There will be funding of around $3.5 billion for the campaign promise of expanded free health care, but nurses can hardly expect, at least not any time soon, a doubling of their wages that Shaw promised, perhaps in a moment of exuberance.

The hike in the public sector wage bill for the fiscal year will perhaps lag behind the rate of inflation, but on the premise that upwards of 15,000 jobs will be 'saved'. There will be some subsidies, geared towards the poor, to help cushion the impact of rising food prices.

Shaw has discovered, as he remarked in that Montego Bay speech, that there is no "magic wand" with which to solve Jamaica's economic problems. And Golding remarked in his broadcast last week that the global environment is not particularly welcoming at this time.

"We are caught in the middle of a global economic cyclone that is battering even countries with strong economies," Golding said.

The underlying message, therefore, is that the Government's major focus will be on tight fiscal management. It is working hard to keep the budget deficit for this fiscal year to no more than 5.5 per cent of gross domestic product (GDP) and that for 2008/2009, at 4.2 per cent of GDP. As we have noted in these columns before, there is little room within which the Government can manoeuvre.

Confronted with this stark reality, the administration, having deemed it important to its credibility with voters to fulfil its more politically sensitive promises, has concomitantly tough decisions to take.

Of course, the fundamental solution to Jamaica's problem of deficit and debt is robust and sustained economic growth, which demands not only sound fiscal management but spending on infrastructure and education. In the circumstance, finding the cash to spend in these areas is difficult - and made more so when the Government is committed to pumping cash into lossmaking public enterprises.

This is one area where we believe that Golding and his ministers need to be more aggressive - the divestment of public enterprises. Indeed, the Government is narrowing this year's fiscal deficit by booking US$60 million for the sale of 49 per cent of the Petrojam oil refinery to Venezuela's state oil company, PDVSA.

It is important that the administration pushes ahead with the planned divestment of the Sugar Corporation of Jamaica, which will demand upward of $1 billion in subsidies.

But, the real big ticket item is Air Jamaica, the carrier to which Jamaicans are sentimentally attached to the exclusion, up to now, of pragmatic business and economic decisions. In the past dozen or so years, this airline has lost nearly $100 billion. Jamaican taxpayers have had to carry the bulk of this bill. It is very likely that in his budget, Shaw will have made an allocation of more than $2 billion in support of Air Jamaica, ostensibly to tide it over until divestment. In addition, Air Jamaica's debt is a contingent liability for the Government.

The rhetoric of the administration notwithstanding, it is unlikely there is a buyer around the corner. Moreover, any future divestment must be real and definitive.