Clarke

It is hard to believe that after so much has been said, by so many, for so long about the Meeks review of the People's National Party's (PNP) 2007 election loss, I have only just read it.

A 2007 pre-election poll showed that the electorate overwhelmingly cited economic hardships, including joblessness and job insecurity, as their greatest concern. However, the Meeks Report does not attribute the loss of the elections to the failure of the PNP administration to manage the economy in a manner that satisfied, or provided the hope of satisfying, the economic and social needs of the people.

Jamaicans have historically voted based on their judgement of the performance of the incumbent government, while taking into account how comfortable they feel about the prospect of the opposing party sitting in government. It was the late Carl Stone who said that governments in Jamaica are never voted into office, governments are only voted out of office (forgive the ugly paraphrase).

why the PNP lost

To properly understand why the PNP lost the elections we must first recognise that during the entire period following the 2002 elections, in which the party lost considerable ground, its support was waning. The electorate had begun to look more favourably at the JLP, particularly after Edward Seaga, the PNP's most powerful electioneering asset, left the political stage. Thereafter, the prospect of a JLP government was no longer seen as a greater evil than the deteriorating economic and social conditions which had characterised much of the PNP's tenure in office. At that point the tide turned decisively against the PNP and its loss at the next elections seemed a certainty. The emergence of Portia Simpson Miller as leader changed all that, and dramatically reset the election equation overwhelmingly in favour of the PNP.

The analysis in the Meeks Report focused principally on the PNP's loss of popularity after the political equation was reset by Simpson Miller's ascension to the leadership. But the real answer to the question why the PNP lost the 2007 election lies in the factors that caused the erosion of the party's popularity before Simpson Miller's leadership began.

The fact is that as the Seaga factor receded, people were more prepared to admit dissatisfaction with their economic and social circumstances and began to look for alternative leadership that could improve their lives. They were excited by Simpson Miller's emergence as leader of the PNP, as they saw it as an opportunity for that change, because as they said at the time 'She fi wi'. Unfortunately, her incumbency as prime minister did little to satisfy the people's expectations and as her time in office wore on led to increasing levels of 'buyer's remorse'.

By the time the elections were called in late 2007, the people had substantially reverted to their pre-Portia posture; and again began to weigh the PNP government's performance in the balance. They found it wanting.

It is pure self-indulgent delusion for the PNP to believe that its 2007 loss was primarily due to weak political organisation and poor election campaign strategy. Nor were scandals of any moment to an electorate which had come to view corruption in government as being as natural as sunshine in Jamaica. It was the deteriorating circumstances of their social and economic lives brought about by the economic policies of the Government that most influenced their decision. To put the loss down to poor political organisation is to completely miss the message of the elections and lead the party to repeat its tragic mistakes to its own detriment and, more importantly, the detriment of the country.

economic policies

Unless the PNP objectively reviews the economic policies it pursued during its time in office, any new economic policies it develops are likely to be contaminated by the errors of past policies and their destructive consequences. Consequences that the country should never again be asked to bear: The decimation of our productive and wealth creating sectors, the society's descent into lawlessness and the destruction of our social capital, the substitution of productive employment with street corner hustling and scuffling, thousands of our potentially productive citizens giving up on finding work and the large scale export of jobs. Economic plans that fail to draw on the lessons of these past failures will be doomed to even greater disaster in the future.

But the unwillingness of the PNP Opposition to confront the failures of its past economic stewardship, while deeply worrying, pales into insignificance against the absolute obliviousness of the current JLP administration to the depth of the economic crisis it inherited and the incongruity of continuing to pursue the policies which created it. How can we explain this administration's blind acceptance of the macro economic policy template left by the PNP? Instead of developing new policies to reverse the anti-production, pro-import consumption, economic conditions it found, the only new policy that the present government seems to have adopted is one to 'out PNP, the PNP'; a blind man following the lead of one equally sightless. Since coming to office, this administration has operated from the same disastrous economic policy playbook as the previous administration, and it is no surprise that it is reaping the same pitiful results.

It is incomprehensible that an Opposition party, having had such an extended opportunity to observe the persistent deterioration of our economy over so many years - the decline in our productive competitiveness, the rapid deterioration of our trade, current account and fiscal deficits and the build-up of a suffocating debt which consumed ever-increasing amounts of the resources needed to finance our social services - did not realise from the moment it came to office that the economy was in need of major surgery to halt the slide and put the country back on a path of development.

Now, nearly two years later, we are about to enter the embrace of the IMF, which may finally force the Government to adopt the policies it ought to have employed when it first entered office.

According to the finance minister, the fund has already laid down the non negotiable aspects of its conditionality: reducing the budget deficit, divesting or consolidating public-sector enterprises to reduce cost and reorganising our debt to reduce debt service costs. But the Government should have known it had to take these actions from the moment it came to office. It is ironic that it is now being forced to adopt these necessary policies only because of the need to borrow US$1.2 billion, an amount not very much different from the value lost by either Air Jamaica or Clarendon Alumina Production.

The impression being given by many is that our return to the IMF has come about only because of the international economic crisis and that the pre-existing dysfunctional state of our economy had nothing to do with it. But we can be sure that the IMF is unlikely to be similarly deluded. It has to protect its financial exposure to Jamaica and is, therefore, likely to insist on major changes in our macro-economic policies to ensure that we put the economy in a position to service our debt. The IMF, the Government and the Jamaican people will now be locked in a partnership. And it is a partnership from which it is possible we could all ultimately benefit.

benefit of the IMF

The benefit of the IMF to the Government is more than the obvious access to substantial soft-loan financing. It is also the political cover it can provide the Government by becoming a villain on which the unpleasant economic decisions which will have to be made can be hung. The Jamaican people should also benefit because the IMF is likely to force the Government to override its own political priorities and pursue policies which will enable the economy to develop and grow, and personal prosperity to rise over time.

The IMF is likely to recognise that for its investment in Jamaica to be beneficial, the economy will have to be restored to a position of competitiveness. The present unsustainable disequilibrium in the make-up of our GDP must be corrected. Goods production and export services (essentially tourism) which constitute the base of our wealth creation have declined by almost thirty percent since 1995.

The IMF is also likely to recognise that for production of goods and export services to increase, competitiveness has to improve significantly; and that for this to happen, the cost of living measured in hard currency must be brought to levels that will allow the cost of local inputs to the production process to be competitive. They should also realise that to achieve this, incomes, specifically at the upper end, must better reflect value created. The fund must also be aware that the outrageously uncompetitive price of capital has to be rectified, for Jamaica to be brought to a satisfactory level of competitiveness; and that for this to be done we must end the situation in which the Government continues to outbid its citizens for available domestic capital.

The IMF's worldwide exposure and decades-long experience might also allow it to convince our policy-makers that we cannot achieve and sustain prosperity without increasing our capacity to produce value-added goods and services. Those who have tended to limit the ability of Jamaicans to success in sports and entertainment (as valuable as they are) must be liberated from that manifest self-contempt and brought to the realisation that they and the country will be condemned to poverty if we do not embrace and promote our ability to make and create manufactured goods and high-value services.

policy changes

Should the Government become sufficiently convinced of what is required and summon the courage to make the necessary policy changes, not only can Jamaica overcome the economic crisis in which we have been gripped for so many years but we will be able to prosper and grow for a long time to come. However, if the Government continues to follow the economic course it inherited, with or without the IMF, it will only succeed in landing the country in a ditch far deeper than that into which we now find ourselves.

Once Seaga left the political stage, the JLP began to look more attractive politically.

Shortly after Portia Simpson Miller was elected prime minister, 'buyer's remose' set in.- file

The US$1.2 billion being sought from the IMF is not very much different from the value lost by Air Jamaica.

Claude Clarke is a former trade minister and manufacturer. Feedback may be sent to columns@gleanerjm.com.