After debt,what

Ian Boyne, Contributor

Far more important than whether Portia squares off with Andrew in a media debate - and that is important - is that certain critical issues don't get sidelined and marginalised in this obsession with the debt, tax, pension and public-sector reform.

The Gleaner was at it again last Thursday with another page-one editorial titled 'Confronting the enemies of the people'. By now, if you wake up any regular reader of The Gleaner at 3 a.m. and ask what is Jamaica's debt and what percentage of the GDP it is, he is supposed to be able to blurt out, even half-awake, "$1.6 trillion and 130 per cent of GDP - 20 per cent higher than Italy's and 30 per cent lower than Greece's". He would give you even more information than you ask for, as The Gleaner, as an effective communications medium, knows the value of repetition.

The Gleaner is doing an excellent job and performing a highly important public service by jolting this nation to our alarming debt ratios, our fiscal imbalances, and our need for belt-tightening. But it needs to do more: Like the International Monetary Fund (IMF), which is looking down the pike and expressing concerns about Jamaica's medium-term economic programme, and what is likely to happen in 2015, The Gleaner needs to tell us: After tax, pension and public-sector reforms - and after we deal with the debt - what next? Will we be guaranteed growth and - we can't stop there - will that growth trickle down to the masses? Is that hope based on anything more firm than the hope of Christ returning in 2012?

The Gleaner would be very pleased with Andrew Holness and how he is approaching the election campaign. If he is not directly heeding The Gleaner's advice, he is certainly singing from the same hymn book. The Gleaner, Nationwide News Network and some other voices in civil society, have been urging our politicians to stop fooling the people with promises and platitudes and just level with them and tell them the truth. Don't promise the moon and the stars when you know you can't even offer a good glass of lemonade.

Don't exploit people's needs by telling them all the things you can do for them when you know that to do that you would have to worsen our debt crisis, or pile higher taxes on their backs. Andrew Holness has been talking the talk of the fiscal conservative par excellence. He told CVM's Garfield Burford on Wednesday night that he won't be "writing any blank cheques", as it were. He is beyond the old-style politics of fooling people with promises. We are spending too much, we are borrowing too much, and it is time to face the truth about our parlous economic state.

He was very clear in his inaugural address: "The inability of successive governments since the 1970s to have a sincere, genuine and respectful discussion with the poor, about a practical approach to economic development, has led to a delaying of the inevitable confrontation of our national debt. We cannot continue to borrow more than we produce. This is the surest way to continue poverty. The lack of discipline is the greatest injustice visited on the working masses of Jamaica."

Daring challenge

In case you missed it, this is a daring and frontal intellectual challenge to Portia Simpson Miller and the People's National Party (PNP). He is making the point, not too subtly, that despite Portia's rhetoric about loving the poor, her 'populist' disposition and posturing, in fact, end up hurting the poor and setting back any prospects of their development. Prime Minister Holness has thrown down the gauntlet. Again, quoting from his inaugural address: "The notion that fiscal discipline and a human-development agenda are mutually exclusive is a false dichotomy rooted in the rhetoric of the post, which must be left there." Pretty plain speaking.

The prime minister might not be arresting and commanding on his feet, but when you read his speeches, there are substantive ideas that you can interact with. Last Sunday at his party's annual conference, he again preached his fiscal conservatism to the delight of even some sceptics like Mark Wignall. That "run wid it" statement of Omar, in the PM's view, typifies what he sees as the populist, spend-it orientation of the PNP.

It is time we broaden the discourse on the economy in Jamaica. In its lead story on Wednesday ('Still off course: Jamaicans stay wary as jobs remain most troubling concern'), The Gleaner reported that more than half of the country believes that the shortage of jobs is Jamaica's most pressing concern now, mirroring what the RJR Group/Boxill poll said two weeks ago.

In that article, ace reporter Arthur Hall informed that just under half of the people who voted for the Jamaica Labour Party (JLP) in 2007 believe the Government has steered the ship in the wrong direction. "The vast majority of people have formed this opinion based on the rising unemployment level," Hall reported. While the JLP has not been pushing its 2007 "jobs, jobs, jobs" mantra this time, and while The Gleaner has, up to now, been deafeningly silent about our unemployment crisis and the urgent need to create jobs, the people's major concern is jobs, jobs, jobs. (Indeed, The Gleaner is calling for the very opposite - job cuts in the public sector.)

Now this might well be necessary, but any balanced, nuanced and holistic analysis of our economic ills cannot ignore the issue of job creation or treat it as something that will automatically take care of itself once we cut the debt and carry out pension, tax and public-sector reforms. If we are opposed to selling people snake in populist wrapping, we should also be wary of selling it in any other form, too!
There is absolutely no historical or empirical data that upholds any view that employment creation necessarily follows stabilisation, austerity measures, or even economic growth. Anyone who still holds that view should get a hold of Tom Friedman's just-released book (co-authored with Michael Mandelbaum) That Used to be Us: How America Fell Behind in the World It Invented and How we Can Come Back Home. The Gallup Unemployment Index shows that 19 per cent of the global workforce is unemployed, numbering 205 million people. And the International Labor Organisation estimates that 1.53 billion people are in "vulnerable employment".

The Economist, in a cover story on 'The Quest for Jobs' (September 10-16), says, "Joblessness is becoming more chronic. In America, famous for its flexible labour market, the average jobless spell now lasts 40 weeks, up from 17 in 2007." And remember while growth has slowed because of the recession, it has not turned negative.

Significant changes

With the small percentage of growth projected by even the most optimistic locally, how much of a dent will be made in unemployment, relying on purely the 'magic of the market'? There are significant technological and globalisation-related changes taking place which have been negatively impacting job creation, especially for those not highly skilled. These changes are structural and permanent and can't be cured simply by economic growth per se.

The Council on Foreign Relations, in September, released its extensive task force report on US Trade and Investment Policy, which notes that "from 2000 through 2009, only workers with a doctorate or a professional postgraduate degree - just 3.6 per cent of the labour force - enjoyed increases in their average real-money incomes". And this was before the global economic crisis.

Income inequality has increased in the US for the past 30 years. "More troubling," says the report, "US inequality is widening, largely because of falling real incomes for all but the most highly skilled, highest earners."

Many would be surprised to learn that the IMF was established not just to promote price and exchange-rate stability but high employment. Even today, it lists its objectives as promoting high employment and poverty reduction, though its policies have paid little attention to those indices directly, compared to its neoliberal targets. The rise of monetarism in the 1970s has profoundly distorted economic thinking.

Today, we are obsessed with inflation targeting, but not employment targeting. Class bias masquerades as objective, neutral, detached economic thought. We must unpack it! The IMF needs to go back to its original mandate and pay attention to employment. In his paper in the July-September 2011 issue of the Brazilian Journal of Political Economy ('Rethinking Macroeconomic Policies for Development'), Deepak Nayyar says, "Economic growth with full employment should be the fundamental objective of macroeconomic policies. The size of the fiscal deficit, or the amount of government borrowing, is the symptom and not the disease."

Let's reason. After we have done the necessary reforms being campaigned for by The Gleaner, what will ensure that investors will be flocking here or that local investors will be pumping money in an economy where demand is compressed, spending is reduced, and austerity is the order of the day? With our high trade dependence and vulnerability as an open economy, how will we grow and create jobs with a global slowdown?

Neither Andrew nor Portia will have much power to effect good with a globalisation that is destined to further marginalise countries like ours. Yet, in our debates here, issues of globalisation, foreign affairs and global economic trends never feature. In our last election debates, not one journalist raised a single question about the global economy - a fact, I safely predicted in a column which appeared the day after the leadership debate (and obviously, written before).

Yet in that very month of the debate, the US subprime crisis broke and, by 2008, there was a full-blown global economic crisis. We still debate parochially about PNP and JLP when both have very little wiggle room. After debt, what?

How we will deal with the increased levels of poverty, underemployment, business closures, crime, students dropping out of school and general social unrest after we adopt IMF austerity measures - whoever wins - is what is not being discussed.

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