- JUNIOR DOWIE/STAFF PHOTOGRAPHER
Finance and Planning Minister, Dr. Omar Davies, about to table the Estimates of Expenditure in the House of Representatives on Wednesday.
Don Robotham, Contributor
OMAR DAVIES has won round one. He has presented a Budget which seeks to restrain Government expenditure to a level below what it was in the last financial year in real terms. Last year the Government spent $328 billion.
This year, the plan is to spend $358 billion or 9.1 per cent more. Since the rate of inflation was 11 per cent, this represents a small but real reduction in Government expenditure for the financial year 2006-2007.
The Minister of Finance is seeking to keep the public sector wage bill within the $9 billion limit. He is trying to get the country to stick to the objective of reducing the deficit to two per cent of GDP this year. He is trying to ensure that our debt to GDP ratio is reduced and our rate of inflation continues to fall. His aim is to stay the course of continued reduction of interest rates in the only sustainable manner - by tight macroeconomic management. Without this stability, progress in the real economy, in investment and productivity, will be impossible.
ANOTHER ROUND COMING
The problem Davies faces is this: The leadership of the Government obviously does not agree with his course. The leadership wants jobs to be 'created'. The leadership wants to fix the exchange rate politically. The leadership wants to decree a reduction in domestic interest rates. In short, the leadership wants to reinflate the economy and embark on a path of financial recklessness. This is only round one. After the elections, comes round two. Will Omar Davies be there after the elections?
The tension between the sober expenditure targets and the grandiose pronouncements captures this contradiction between the policies of Dr. Davies on the one hand, and the aims of the leadership on the other. The Budget speaks with a forked tongue.
On the one hand there is talk of pursuing "economic policies to reduce inflation; cut the debt/GDP ratio; slash the fiscal deficit." On the other hand, there is talk about bringing about universal primary education, reducing unemployment and "revitalising" inner-city communities.
On the one hand we have the Ministry of Finance; on the other hand we have Jamaica House. The notorious phrase that "the Government recognises that while it must balance its books, it must balance people's lives" which originated in Jamaica House, was repeated with a flourish.
DANCEHALL ETHIC
This phrase is the giveaway of what round two will bring. By formulating the choice in this manner, it shows no understanding of the fact that balancing the books is, in reality, the only way to balance people's lives. Like so many others in Jamaica, the Government has a consumerist orientation and a dancehall ethic. This bling ethic - the love of the Escalade and 'name-brand' goods financed from a government contract - is the reason why our productivity is so low and our trade deficit so enormous.
Such persons do not have a clue about how modern goods and services are produced and marketed. They are not interested in learning either. They are at one and the same time suspicious and envious of higher education. Parasitism on the state is their way of life.
Many of our pastors are the living embodiments of this bling ethic so their enthusiasm for the new leadership should surprise no one. The gospel they preach is about 'harvest' and 'winning.' They are not interested in the old -fashioned virtues of modesty, savings, sacrifice and postponing gratification. Such notions are dismissed as 'the Drumblair ethic' and those who oppose vulgar self-seeking and want to balance our books are said to be possessed by demons! Such pastors are 'worldlians' with a vengeance. They are theologians of bling.
ABSENCE OF ETHICAL STANCE
This is why some of my religious friends who are sincere in their convictions and who bitterly reject this dancehall ethic are doomed to disappointment at the hands of their own colleagues. Rather than acting as a restraining influence on the Jamaican consumption frenzy, many of our pastors effortlessly champion their own version of it. They are coming to reap not to sow - as far as they are concerned they have sown enough already.
Ethically speaking, many of them are part of the problem, not part of the solution. Rastafarianism made this criticism of Jamaican Christianity, including the established churches, Revivalism and Pente
costalism, long ago. It is this absence of a deeply ethical stance which has for long compromised Jamaican Christianity and prevented it from offering moral guidance to the society in a time of crisis.
Too many pastors belong to Babylon rather than to Jerusalem. What they object to is not consumerism per se. Their goal is to replace one set of privileged consumers with another, not to do away with consumerism and privilege tout court. They would have to remove the bling from their own eyes first and there is not the slightest chance of that occurring.
It is clear from these consumerist pronouncements that the Government will be seeking to reintroduce crash programmes in this financial year. This is the true meaning of the J$1.9 billion inner city revitalisation programme and the J$1 billion small business loan programme. The problem they have is in financing it.
BAUXITE LEVY
In the 1970s, the bauxite levy played the role of 'boops' for the crash programme. In the 1980s, the U.S. government was assigned that role with the food stamp programme. In the early 1990s Michael Manley got his Dutch friends to play the boops role and they ended up pumping millions of good Dutch guilders into microenterprise development with zero results. Now, some in the government are hoping that the PetroCaribe funds will be our 21st century boops. But there may be a slight problem: President Chavez does not look like a boops to me!
The proposed trip to Venezuela of the former Prime Minister to introduce the new Prime Minister to President Chavez vanished without a trace. I wonder who scotched that one!
The stated aim of improving inner-city water, electricity and other infrastructure are admirable. But anyone who knows anything about the record of the People's National Party (PNP) administration will know that there is not the slightest chance of these aims being achieved.
Just to give one not so small example. Do you realise that J$1.5 billion has already been spent out of the J$5 billion educational transformation fund! Yes, J$1.5 billion, or nearly one third of the fund. Have you noticed any transformation?
One thing we can safely predict therefore: The J$1.9 billion and the J$1 billion will be spent and our inner cities will remain the very same or even get worse. An election is coming and the point is to spend and spend quickly.
THE JLP OPPOSITION
One awaits anxiously the position that the Jamaica Labour Party is going to take on the Budget and the macroeconomic dangers facing Jamaica. So far, both Mr. Golding and Mr. Shaw have been silent. They have not told the nation whether they support the proposal to fix the exchange rate and unilaterally decree a new political interest rate. This is highly irresponsible.
In the Budget Debate they have an excellent opportunity to stand up for principle and to declare publicly that these proposals are suicidal and to repudiate them. It is no use just nitpicking the Budget and condemning corruption. They need to go beyond this and to show the nation that they have a coherent view of economic policy. The stance from which they should criticise the Budget must be not on the basis of some mythical alternative economic model. They know as well as I do that no such alternative exists.
What they need to do is to show up how the PNP is implementing macroeconomic stability with a forked tongue. They need to show the country that this is only the round one budget and that another round two Budget is being planned which will threaten all the macroeconomic sacrifices we have made over the years.
MACROECONOMIC MODEL
The criticism that they should make of the Budget is not that the macroeconomic model is wrong but that the leadership of the Government obviously rejects the macroeconomic model that its own Minister of Finance is pursuing and is straining at the leash to expand the deficit. The Opposi-tion needs to latch on to this blatant contradiction and expose it for what it is.
I doubt they will do any such thing. It would not be a popular position with their supporters. But it would show the country that they are not just another bunch of opportunists pandering to the lumpen.
It would show that that they are people of conviction who put the interests of Jamaica first. This is how Bustamante would have approached it. But does the current leadership have the guts?
