Inevitably, Prime Minister Bruce Golding will take a fair amount of flak for the perceived insufficiency of the measures he announced on Sunday to help cushion the fallout from the global economic crisis.

There will be arguments that the administration, having taken too long to respond, did not provide the aggressive stimulus package, which some insist is necessary to prevent the economy from sputtering to a crawl. Another complaint, not without merit, will be of the unevenness, between sectors, of what the Government has placed on the table. The lobbyists with the greatest influence and loudest voices got the most.

The truth is, Mr Golding found himself between the proverbial rock and hard place from where he had to make difficult judgement calls. The prime minister, in that regard, has to be credited with delivering a reasoned speech that set the global situation, and its effect on Jamaica, in its unvarnished context, ditching the saccharin-coated version that, hitherto, had been the preference of his ministers.

Running behind budget

The bald fact is that the Government's revenue inflows have been running behind budget. The situation is likely to get worse. For, as Mr Golding pointed out, Jamaica's tourism markets have grown soft, alumina prices have collapsed and imports into the country have slowed.

The impact of these is clear in the fiscal numbers. Revenues, between April and October, were $8 billion, or five per cent, below projection. When debt-servicing costs are taken into account, the fiscal deficit was $10.8 billion, three times the expected level. A major part of the reason for this was a significant shortfall in the take from general consumption tax (GCT), which is symptomatic of the slowdown in economic activity.

In that scenario, with the coffers low and the Government facing a debt burden of 110 per cent of GDP, which Jamaica is determined to service, the administration would have had little room within which to manoeuvre. Viewed through that prism, the Government's offer of tax concessions to any sector - and it has halved the GCT to be paid by hotels, shaved downwards the transfer taxes on real-estate transactions and removed the withholding tax on dividends paid by firms - can be considered bold, notwithstanding the critics who will complain that it was not enough.

Shedding jobs for survival

These measures, along with moves to retain a portion of government procurement for domestic small business and hiking the turnover threshold at which firms join the roll of GCT payers, are welcome. So, too, is the $650 million in new loan schemes announced for small and micro-enterprises.

These initiatives acknowledge three things, the first being that many larger firms, including tourism stakeholders, need support to ride out a difficult period, and even stimulate activity. Additionally, the administration recognises that it is almost inevitable that many larger firms will have to shed jobs to survive. Employees, therefore, will be looking for opportunities in small, and micro-enterprises. Some will start their own businesses. It is important, therefore, that the processes for accessing the new loans are not overly complicated, or prove to be a disincentive to the entities that manage them.

One notable absence from Mr Golding's package, though, is an incentive to the agriculture sector, around which there was so much fanfare at Budget time when talk of food security was high on the agenda.

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