Letter of the Day | IMF policy always right even when it is wrong
Published:Thursday | May 16, 2019 | 12:00 AM
It is very galling to hear the IMF making excuses as to why its austerity prescription has not worked in Jamaica, and of course in many other places. We still have very weak growth, new jobs which don’t pay a living wage and strained social provision. Only Chinese loans provide an appearance of something happening.
Having first complained that the private sector is not responding to the golden opportunities that now apparently exist, we hear more recently that the real challenge is public sector governance. Not that I disagree – the decline in our Ease of Doing Business speaks volumes. But where was the emphasis on this when we were told to tighten our belts to bring down the national debt via a crippling primary surplus of 7 per cent of GDP?
How can we pass all the IMF tests and still effectively fail? Because the IMF has a purely financial approach, and an orthodox one at that, pandering to the banks and the creditors who continue to make record profits despite the 2008 global crash and our local debt exchanges. PATH is the only social element but included only to help prevent the hardships boiling over into real unrest, as is happening in so many countries. For those a little above the need for PATH assistance, we now read that loans are providing the prop, with personal debt servicing now absorbing as much as 70% of household incomes.
The squeeze has made ‘impossible’ any effective social intervention part of the ZOSO programme, as we hear from Denham Town residents – so what hope for reducing crime except through more repression and figments such as the now discredited NIDS nonsense? Why the need to go to the Chinese now not only for Belt and Road but also for money (U$100m) for the coffee industry? Education and health are also underfunded because that IMF ‘magic medicine’ includes always cut the public sector wage bill.
Without social development for those not at the top of our society, we shall always have crime, which is largely uncontrollable through policing and security measures.
We need the social development reaching all, not just economic (financial) stability. It can’t be first one and then the other, which is what the short-sighted fiscally focused IMF policy has always been about. Exactly the same applies to fighting crime, which is substantially the result of this stringency advocated by the IMF, but also part of our historically unchanged plantation society. Without the social rebuilding being more than a footnote to the ZOSO strategy, the hard policing cannot and will not work to generate meaningful development and a more natural decrease in crime (through less inequality and greater opportunity for all).
Yes, root out the corruption and inefficiencies in government but don’t allow this to be used as an excuse for the failed austerity policies of the IMF. We need meaningful social progress and the enabling fiscal commitment to have any chance of tackling crime and generating development for all.
Paul Ward
Campaign for Social & Economic Justice
Kingston 7