IMF bandwagon and JEEP

The country should be uniting against any repressive and socially harmful policies being recommended by the International Monetary Fund (IMF), rather than giving that dreaded institution any comfort from our disunity and political gamesmanship.

We should resist, with the most vehement rhetorical force, positions being pushed by the IMF which could be injurious to our poor and marginalised. But the IMF benefits from our failure to achieve national consensus on key issues and from the political silly season which we are in the midst of today. A reputedly progressive political party like the People's National Party (PNP) should be at the forefront of the struggle against any demands by the IMF to push its socially backward neoliberal policies, rather than be consumed by its political contest with its opponents in Government.

The IMF has made significant concessions since the onset of the global recession of 2008, which has chastened and humbled that hitherto inflexible and recalcitrant multilateral. The IMF has had to admit that its free-market fundamentalism was out of tune with economic realities and today it has embraced the need for poverty reduction, social equity and balanced development. But it still has some way to go. Dogmas die hard. And when it is negotiating with weak economies like Jamaica's, it will try to get away with what it can.

The IMF, contrary to a popular view, does take into consideration local political contexts and is very concerned about its image. The widespread opprobrium which it faced in the 1970s and 1980s did damage its image and led to some soul-searching. IMF representatives carefully monitor the local press wherever they are based, and if they find that governments are being pressured by elites and the chattering classes to adopt their neoliberal policies, they will press their case.

Let's make one thing clear: Promoting fiscal recklessness, pursuing distortionary macroeconomic policies and adopting populist and redistributionist policies without a sound macroeconomic base is not what I am recommending. There are irresponsible vote-catching political leaders who pander to fiscal slackness in the name of the people and the poor. Fiscally imprudent policies end up hurting the poor and setting back development.

But I am saying that an abundance of empirical studies - some conducted by the IMF itself - have demonstrated, beyond any controversy, that IMF policies have harmed not just the poor and marginalised, but have set back development and have been counterproductive. I am saying the IMF is fallible and that it has no monopoly on sound economic thought. We should not be mesmerised by IMF technocrats.

Not much wiggle room

Of course, the IMF always says it is the countries themselves which design their own programmes, not they themselves which dispense the bitter medicine. They only give the broad parameters and overall macroeconomic framework, but it is the countries which set the targets, etc. The fact is that the boundaries are so circumscribed that there is not much wiggle room. And because of the power of the IMF and its role as the clearing house for international capitalism, exercising your freedom to reject their boundaries can be suicidal.

Whichever party we elect in our next election - and whoever our prime minister is - we will still have the IMF juggernaut to contend with. It is time that we develop some consensus and national will around certain objectives. We can't continue to have institutions like the IMF divide and rule us and play us off one another, while it protects the interests of international capital.

By all means, knock the Golding Government for the "unsuitable, inappropriate misguided, short-sighted" IMF agreement it negotiated. Use whatever adjective to describe the agreement the older heads have negotiated. I don't want to insulate this Government from political attacks or legitimate criticism. As long as we find some time and space in all of that to agree among ourselves what we as a nation are not prepared to live with and what we are prepared to fight.

If we feel that laying off thousands of public-sector workers is not in our national interest; if we feel that equity will not be advanced by that; if we feel that pro-cyclical, demand-compression policies will not produce economic growth but rather stagnation, let us unite around that and challenge the IMF. Civil society must make its voice heard so that whoever is in Jamaica House after the next election knows the things which we consider non-negotiable.

We have, for too long, as members of the intelligentsia, allowed the intellectual hegemony of neoliberals to go unchallenged. And we have more than enough in our intellectual arsenal to assail the IMF and its reactionary, neoliberal technicians and economists.

It is these same IMF dogmatists who injudiciously pushed many developing countries into dropping capital controls to their own detriment. It was the IMF Pontificate which helped to generate the Asian financial meltdown of 1997-98. We must remove the veneer of wisdom from on high which these arrogant IMF technicians and economists perpetuate.

It is time they wake from their dogmatic slumber and realise, as Nobel Prize-winning economist Joseph Stiglitz says in his book Freefall: America, Free Markets and the Sinking of the World Economy: "The Washington Consensus policies and the underlying ideology of market fundamentalism are dead."

The Planning Institute of Jamaica (PIOJ) delivered an excellent critique of IMF orthodoxy in its now sidelined Growth Inducement Strategy (GIS) document. The PIOJ, surprisingly, did not mince words in highlighting the deficiencies of Jamaica's IMF programme. "The current recession where Jamaica is producing below its potential is being worsened by the pro-cyclical nature of the IMF programme. Without immediate adjustment, the economic programme will achieve neither financial or fiscal stability and sustainability, nor sustainable economic growth in the medium term. Near-term political economy will pose a critical challenge to the sustainability and hence credibility of the current economic programme and policy stance."

Alarm sounded

And the PIOJ was prescient in this document, written when our Government was more bullish about its IMF programme. Even after the Government was boasting of its passing the earlier tests, the PIOJ was sober enough to sound the alarm: "While the country has successfully passed both IMF tests on prudent fiscal management so far, the PIOJ is forecasting potential danger to the socio-economic environment on the horizon if Jamaica continues with the current pace of fiscal consolidation."

With the power of the IMF over our economic direction, it is small wonder that the holistic approach of the GIS has apparently been shelved. The Government's recent Budget was dubbed 'From Stabilisation to Growth', but one did not have to be a genius to see that this IMF programme would not take us from stabilisation to growth. Macroeconomic stability is necessary, but not sufficient for economic growth, I repeat. With a poverty rate now the fourth-highest in our region according to the IMF itself in its recently released Regional Economic Outlook for the Western Hemisphere, and an unemployment rate of nearly 12 per cent, our economic programme has to involve some components which the IMF is overlooking.

The PIOJ itself says in that eye-opening GIS document: "Given the current global economic environment, the present pace of fiscal consolidation may lead to a worse-than-anticipated deterioration in the social-economic indicators. This may hinder Jamaica's recovery efforts ... consequently threatening the success of the fiscal consolidation programme." It's logical: Neoliberalism has been proven time and again not to work in contexts like ours.

This is why PNP President Portia Simpson Miller was bang on target when she said at the PNP conference that a new agreement with the IMF "should include a number of new important programmes for social and economic development". She said her Government would approach the IMF to "redesign and recraft the standby agreement".

The IMF, of course, would be no more willing to listen to a PNP government than it would to a JLP government - unless, perhaps, if we have national consensus.

And while JEEP has been the subject of much ridicule, misunderstanding and baseless propaganda, its concept is highly defensible. How it would be funded and implemented are details the PNP must provide, but philosophically it is in the right direction. Where has this propaganda come from that it is a crash programme, a means of giving people handouts? That can only be attributed to our aversion to reading, and political mischief.

Creating wealth

The PNP president said clearly in her speech (the text is available): "At the core of JEEP is the plan to teach someone to fish, rather than giving them a fish. Through JEEP we will move the Jamaican people from welfare to well-being and from well-being to wealth-creation." Does that sound like a crash programme and wild redistributionism? It sounds like a strategy to deal with our failure to create jobs - a worldwide problem now (See especially the Economist front-page special, 'The Quest for Jobs: America, Europe and a Lost Generation', September 10-16 issue).

Mrs Simpson Miller went on to say, "A job can be one of the best forms of family planning. This is why we are proposing a comprehensive emergency employment programme ... ."

Interestingly enough, I have a copy of Hansard where Andrew Holness was debating the motion by Gregory Mair to have a family-life policy. Holness, who has always been very enlightened on the importance of a sound family structure, said: "The Jamaican State, Madam Speaker, does not have a comprehensive and broad social safety net ... . There is a large group in this society, Madam Speaker, those who have just left school not in a job, no prospects of a job, and will probably be that way for another 20 years, that are able-bodied, but they cannot earn any income and there is no social safety net for them. But yet that is your age, where you have the highest birth rate, between 16 and 24. But there is no support especially for males ... ."

So perhaps if Andrew and Portia can coalesce on that, we can start the climb to national consensus.

Ian Boyne is a veteran journalist. Email feedback to columns@gleanerjm.com and ianboyne1@yahoo.com.