With the public's attention now drawn to Jamaica's unique economic experience of having an economic meltdown in the midst of an unprecedented global economic expansion during the 1990s, much name-calling, scapegoating and buck-passing on all sides of the issue can be expected. People are going to push their point of view, peddle their ideas and draw parallels, analogies and conclusions even where they don't exist.

But the public should not allow itself to be distracted from what should be the real purpose of the FINSAC Inquiry: to discover what caused an economy which was performing quite satisfactorily at the beginning of the decade of the 1990s suddenly to fall in on itself, destroy its ability to produce and sustain itself; and be left gasping for breath in the arms of its financial doctor, the International Monetary Fund (IMF), an institution feared and despised by its people.

The expression 'voodoo economics' was a cutting repartee directed at Ronald Reagan by George H.W. Bush as they battled for the Republican Party nomination in 1979. However, it provides a useful context for understanding the philosophy which seems to have guided the economic policies pursued by our governments since the early 1990s. Voodoo economics has come to refer to the economic theory promoted by Reagan. Essentially, it posits that moving resources from the Government, primarily through tax cuts, to the holders of capital would lead to investments in the economy which would in turn stimulate economic growth and generate increased revenue to the Government in the end.

The economic policies of the former People's National Party (PNP) administration and now this Jamaica Labour Party (JLP) Government appear to be based on a similar brand of voodoo: that of transferring ever increasing amounts of taxpayers' money to the rich holders of capital through high interests paid on government debt instruments. But the second part of the theory - that which relates to investments and expansion of the economy - has not even been factored in or suggested as being possible, nor has it been set as an objective by either administration.

The policy has not only been lopsided but also hare-brained: lining the pockets of the rich and requiring nothing of them but their willingness to profit from Government's ballooning interest rates. It, therefore, does not even rise to the level of voodoo economics and because of the surrealism of its expectations and the horror of its outcome would better be described as a duppy story.

At the point where the JLP assumed responsibility for the country's economic stewardship in September 2007, it was already clear that the economic dilemma the country faced needed to have been tackled aggressively and comprehensively. The disastrous policies of the previous administration had already gone a far way in eating away the innards of the economy and substantially undermined the country's wealth-creating productive sector. It was already obvious that registering a near zero per cent growth in per capita income, while others of our Caribbean neighbours were enjoying growth of over five per cent, had sent our country's economy into virtual reverse. The economy needed to be urgently rescued.

Delay was not an option. To suggest that a new government coming to power on a platform of change would flinch in the face of such an urgent call to duty out of concern for negative public reaction would be to accuse it of political cowardice.

Escalating debt

The new government must have known that maintaining an overvalued currency which crippled its productive sector's competitiveness would lead eventually to an explosion of its current account, balance of payment and Budget deficits. It should have known that this would lead to the continued escalation of the country's debt. It would also have been aware that the source of debt financing was ultimately the county's own domestic capital; and that this would continue to rob local productive businesses of the financing they need to operate, to develop and to help the economy grow.

Government's unprecedented presence in the domestic credit market triggered and sustained an environment of high interest rates which eventually became like a vampire at its neck, sucking over half its tax revenues just to pay interest.

The usurious interest rates caused by Government's presence in the domestic credit market, compounded the uncompetitiveness of legitimate productive businesses and encouraged activities designed to circumvent the formal system. It is this that fuelled the explosion of bandooloo financing schemes, street hustling, gangsterism and general lawlessness. To believe that a new government would have waited two years to address these urgent and debilitating problems and not fulfil the mandate it received from the people to change course to a path that would lead to economic stability and growth, for fear of negative public reaction to tough but necessary economic measures is to suggest the JLP was not really ready for prime time.

The crisis the country has endured since the early 1990s is much more than high interest rates and the JLP should have been ready to deal with it when it came to office. Economists define an overvalued currency as one whereby the price of which relative to other currencies makes the goods produced by that economy overpriced in world markets. Jamaica is perhaps the world's most outstanding example of this phenomenon. It is the objective of keeping our currency priced at levels which make the goods produced by our economy overpriced that has been at the root of the problem crippling our economy.

This policy, after giving people a false, temporary feeling of prosperity, could have had no other result than inflating the foreign-currency cost of Jamaican production and deflating the Jamaican dollar price of imported competition, leaving Jamaican products uncompetitive in both the export and domestic markets.

Double whammy

The high interest-rate policy, which is the tool the Government has used to sustain the overvalued-currency policy, completed a double whammy to our producers, saddling them with excessive interest expenses, a cost burden their overseas competitors did not have to bear.

The bull-in-a-China-shop mandate given to FINSAC and the Jamaica Redevelopment Foundation was the final and fatal blow delivered to countless Jamaican producers, throwing them out of their homes, their machinery out of their factories and their employees out of work.

I have argued that the situation had gone so far beyond the point of no return that the new administration needed to have approached the IMF from the very outset. But the Government dithered. It was only the force of the international financial crisis which shook it out of its sanguinity and led it to the doors of the IMF. This refusal to seek the IMF's help when the country so desperately needed it can be explained only by political expediency, not temperance or prudence.

This reticence to take decisive action on the economy and to approach the IMF earlier has been attributed to fear of disruptive public reaction to the pain of change. But we assume too easily that ordinary people cannot think, are unable to weigh issues and act rationally.

In 2007, because they wanted a change of policies, they turned their back on the overwhelmingly popular appeal of one of our most charismatic politicians ever and voted in a party with a relatively dour and colourless leader. It is inconceivable that those same people, immediately after, would not have been willing to allow the bitter medicines that real economic change would require.

Country before self

It should not be beyond the capacity of the Government to implement policies to restore competitiveness to our currency, enable interest rates to properly reflect inflation and risk and restore an environment that encourages productive investments for our economy to grow again. George Chambers and Arthur Robinson in Trinidad, Erskine Sandiford in Barbados and Edward Seaga in the mid-1980s in Jamaica had the courage to do just that: by putting country before self. I refuse to accept that Bruce Golding, faced with the same challenges that all of these men successfully confronted, albeit at great personal political sacrifice, cannot do likewise.

The task of good government is to make hard choices from among difficult options: always with the objective of achieving positive national outcomes at the end. The choice is never to resile from challenges, do nothing and leave the people to face the certainty of hardship. Good political leaders are not only expected to make difficult decisions, but to have the skill required to garner the public trust and bring people along: even if they are punished by the same people later.

We underestimate our people if we think they really expect their political leaders to solve problems overnight wielding a 'rod of correction'. Their confidence in Golding's ability to bring change has waned not because they were expecting magic or miracles, but because he has so far shown no sign of being serious about or capable of effecting change.

The prime minister can redeem the public's confidence by engaging them through a real debate in Parliament on his plans for turning the economy around, not through a show-debate staged elsewhere. The Government's plan should be brought before the House and debated, with the Opposition having ample opportunity to offer its alternatives: all designed to arrive at the best solution to the predicament in which the country has found itself. That is the purpose of Parliament in our Westminster democratic system. Let's make use of it. Or we can just sit around and listen to 'duppy story'.

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