Turning the economy around
Delroy Chuck
SUDDENLY, BELATED economic naysayers, especially those close to the government's economic bosom, have awakened to the reality of an economy in an advanced state of decay. Where were they when economic rigor mortis was setting in? Still, they seem quite incapable of properly diagnosing the cause, much less the remedy to our deep economic plight. Not surprisingly, government pundits and economic gurus see the problem as one of debt - the burden of paying the foreign debt, the escalating domestic debt, the FINSAC bailout debt, and so on. I daresay debt is not the real problem. In fact, if all our debts were cancelled forthwith it wouldn't be long, under the present regime and economic policy, before we revert to the same economic predicament. Much more is required. The debt crisis is merely a symptom of economic paralysis, of a failed economic model, of living beyond our means, of the distributive economic policy of a confused socialist government, of a government willing to mortgage the future of our country to help its friends and party supporters and, worst of all, of economic injustice; because, in the long run, it is the poor and middle classes who will bear the brunt of sacrifice and hardship for the mistakes, failures and excesses of poor government. Why is debt now a burdensome problem? Was it the main problem of the economy 10, 5 or even 3 years ago? In truth, it has always been a problem but once the economy was growing then it could be kept within manageable limits. Now, with a shrinking economy, the burden of debt has become unmanageable, unsustainable and unrepayable. Those who argue that debt is the main problem should bear in mind the gigantic debt of the USA, of over 5,000 billion US dollars whereas Jamaica's overall indebtedness is under 7 billion US dollars. Examined per head of population, every individual in the USA owes just around forty thousand dollars whereas in Jamaica the indebtedness is under three thousand US dollars. Yet, in spite of its indebtedness, the USA - with a free, open, market economy - is experiencing its most prosperous, productive and prolific economic boom in its history. Here, in backward Jamaica, with a bankrupt economic model, we excoriate the wicked capitalists for being overly generous to lend us money or invest in government paper thereby creating the unbearable burden of debt, and now contemplate or even demand that these filthy rich be punished for their generosity by capitalising the due interest payments or even writing off, rescheduling and defaulting on the debt. Let me warn however that to fail to service our debt would be the gravest mistake this country could ever make as defaulting would haunt us for decades. How then do we go on from here? What can we do to turn the economy around to growth, jobs, investments and opportunities? First, the government needs to change its economic culture of distribution to one of production and creation of wealth. To be sure, it is nice, powerful and endearing to be the chief distributor of lands, houses, titles, largesse, benefits, scarce resources and so on. But, eventually, as the government is fast discovering, it will be the main and most unpopular distributor of debt, hardship and poverty. A cultural change is necessary but it will not be easy. A government so dedicated to socialism, populism and the supremacy of politics to make things happen cannot easily think in straight and sensible economic terms. However, if we are to make a turn around in the economy then we need to implement policies that generate value, service, wealth, production, investment and economic well-being. Second, we cannot lament and complain about the burden of debt yet continue with policies that only increase instead of decreasing the debt burden. The mounting fiscal deficit is simply unsustainable. Something has got to give. Government is trying to do too much yet end up doing so little. One simply has to listen to the Ministers and government backbenchers in Parliament deploring the conditions of their constituencies, the state of the nation but placing the blame firmly elsewhere. One would never believe this government has been in office for ten years which, for this country, must certainly rank as the worst ten years of non-performance. A competent and honest government would accept the blame and mistakes for the state of the nation, change course or resign. Third, the government needs urgently a few success stories. How is it possible for a government, in office for ten years and more, to be unable to attract and enjoy praise for any outstanding achievement? On the economic front, no worthy government highlights the NIR, low inflation and currency stability as major achievements; they are only major achievements for governments with low economic standards.
Opportunities Where governments get praise, and countries make massive leap forwards, are in those situations in which their economies are growing rapidly, jobs are being created to satisfy the expanding population, exports are booming, the quality of life is improving, and the population benefits from increasing choices and opportunities - which are the very reverse of what is happening here. So, by any measure, the present government is a story of failure, of confusion, and unless it charts a new course and turn the economy around then its final chapters will only be epilogues to chaos and disaster. When one considers however, that only a year ago we were being told we are on the right track, I have no real confidence that we are likely to see a turn-around in the economy through any change in policies. Like the TITANIC, we are heading for disaster but it is full steam ahead. Alas, I think we have already hit the economic iceberg and it is only a matter of time before we sink. The mounting debt appearing everywhere, like the water rushing into the ill-fated ship, is the surest indicator we are sinking fast. The economy is in such a parlous state, the debt so mammoth, that debt relief and resheduling cannot really help. Thus, to those who have the foresight to evacuate onto economic lifeboats will be the task, perhaps the challenge, to save and rebuild our ill-fated country. They will understand that what is really needed is not debt relief but a resurrection of a dead economy. Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. 
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