Wilberne Persaud, Financial Gleaner Columnist

The Gleaner reported last week that Prime Minister Bruce Golding and Finance Minister Audley Shaw have gone on the offensive in the wake of strident demands from some public-sector groups still upset over the Government's decision to freeze wages this fiscal year.

They indicated that to honour the signed wage contracts agreed with the civil service would mean finding $8 billion - that relates merely to arrears.

Police and teachers were singled out and Prime Minister Golding is reported to have said in a post-Cabinet briefing that: "It is more than a little unfair to give the impression that this Government has been so heartless, it has been so stingy. As I said yesterday (at a Gleaner Editors' Forum), orthodox economists could very well indict the Government for having agreed to such significant wage increases," Golding added with a pained expression on his face.

There is no doubting that Jamaica will have to make significant adjustments in the way it consumes. We have said before, a Jamaican stimulus with our current ways of satisfying our people's needs will rapidly create further economic problems, not least of which is a tendency for the exchange rate to move further south.

As the financial secretary contemplates mee-ting public-sector wage bills, the question will certainly arise: should we just write the cheque? The Bank of Jamaica will not bounce it. But writing that cheque has consequences the minister of finance and prime minister are seeing as if through a telescope.

Political strategists

Yet it appears premature, if not counterproductive, even harsh, to single out specific public servants as targets for an 'offensive', as The Gleaner terms it. The prime minister is the big gun. Why is it he who immediately carries the ball, if indeed it has been determined by political strategists that an 'offensive' is required? In simple wonderful life, reneging on teachers', nurses' and police wage contracts immediately provides fiscal easement, but can it stand? There are many issues here to be considered. For how long have these categories of public servant been asked to hold strain? Some have argued that there must be strong correlation between corrupt acts of our police and their rates of pay. So too must be our teachers' wages and performance of our schoolchildren. Teachers often do more than one job. Some rely on extra lessons. Nurses find themselves unable to own a home and their accommodations while in training create what people now euphemistically call 'challenges'. Can anyone please tell me - apart from 'Schools' Challenge Quiz' - what 'challenges', as we now use the term, means? Then there is the minor issue of equity. Dissatisfaction is bound to lead to restiveness.

Prime Minister Bruce Golding (left) and Minister of Finance and the Public Service Audley Shaw make their way to a post-Cabinet meeting at Jamaica House in this August 26, 2009 Gleaner photo. - File

Arriving at an equitable sharing of the adjustment burden requires not a piecemeal but a comprehensive approach. While not an easy task, it nevertheless has to be done for all of Government's activities, including projects, cost overruns, priorities, discussions with the civil service about the trade-off between job cuts, proposed pay increases and the like. One hopes all ministries have completed or already done the bulk of this work. If handling staffing requirements at the Ministry of Finance is anything to go by, however, this might well be wishful thinking. Chatter abounds in the land about poor planning and confusion, 'die-heartedness' and incompetence. We wait for the IMF to tell us our shooter can't make the net? You don't treat the single most important technical job in your financial and economic line-up this way. In response, when a decision is taken and an offer made to a qualified person of competence it is assumed the answer shall be yes. Why? Because the ground has been pretested - you have to know the individual's personal commitments and proclivities, their 'baggage', so to speak. Private-sector revolt against the second pick for opening batsman in the first eleven does not help build confidence in selectors' acumen and judgement.

Those issues aside, the other pertinent question is whether the private sector becomes involved in the burden-sharing exercise as well. Will executives, for instance, accept less pay or keep company cars for six years instead of three? Will the sector finally admit that inefficiencies plague it, even if not as much as they do the public sector, and go on to address them? Such ideas, easy as they are to raise, are rather difficult to agree and implement. Why is it, for instance, allowable to change relations with public servants who operate on contractual obligations while it is impossible to do the same with holders of government debt whom it is claimed are willing to consider altered arrangements? These are not matters which economists - orthodox or otherwise - can decide. Economists may indicate potential outcomes but at the end of the day these are matters of policy subject to the political realities Government faces and must manage.

Calculating bonuses

While the United States (US) economy is recovering, it will not do so as quickly as we might wish. Principally because of the rescue scheme that pays more attention to Wall Street than Main Street and ordinary people, Wall Street firms have already started repaying bailout money. They are calculating bonuses as stock prices rise. But it is ordinary people who populate the malls, who provide the consumption drive that provides a big part of the fuel economic activity needs, who help create upbeat attitudes among real sector investors and producers. As currently arranged, US demand growth will pull the globe with it. We cannot count on a mere six-month downturn in tourism, bauxite activity and remittances. These all depend on rebounding US and OECD demand generally. Our salvation requires both a period of partly inward-looking investment and exploitation of our important current and potential export earners.

Such initiatives depend critically on stability within the society. This can only be guaranteed as people buy into shared sacrifice. The inescapable requirement for this is broad agreement on equitable sharing of the adjustment burden.

wilbe65@yahoo.com