EDITORIAL - Engage Shaw, Holness

They spent far too much time on disingenuous claims about the policy options available to the Government, as well the causes for the current perils faced by Jamaica's economy.

In the end, though, this newspaper believes that Audley Shaw, the shadow finance minister, and Andrew Holness, the opposition leader, offered enough substance for a decent discussion on economic strategy and tactics. They must be seriously and credibly engaged by the finance minister, Peter Phillips, when he closes the Budget Debate, and by Prime Minister Portia Simpson Miller during her intervention later this week. If the Opposition has good, practical ideas that can bring value to Jamaica, these should be embraced.

First, though, given Jamaica's outsize national debt, at 140 per cent of GDP, and few willing lenders at rates we can afford, an aggressive programme of countercyclical spending - as even the most ardent Keynesians, this newspaper among them, will tell you - is not an option.

Our first priority is fiscal containment, as is reflected in the requirement with Jamaica's economic support agreement with the International Monetary Fund (IMF) for the Government to run a primary surplus of 7.5 per cent of GDP over the medium term. Simply, the Government will have to spend less and collect more taxes.

PAINFUL

The programme will be painful. But as Mr Shaw is likely to be first to admit, it would have been less so if he, and the administration of which he was a member, had found the will three years ago to imbibe the medicine prescribed by the IMF under a two-year standby facility. Under that programme, the IMF and other multilaterals committed to Jamaica more resources, in half the time, than is projected in the present extended fund facility (EFF). Jamaica's failure to implement upfront reforms and contain spending meant that the programme was quickly derailed.

This time, the Government must summon the will to stay the course. This, however, does not preclude the administration for adjustment strategies and tactics, once it does not translate to an abandonment of the fundamentals of the programme. The consequences will be dire.

Mr Shaw's suggestion of a PetroCaribe-financed support fund to be tapped by firms for energy efficiency upgrades, as well as the transfer of assets to the National Housing Trust (NHT) to strengthen its ability to stimulate housing construction, is worthy of serious analysis.

Mr Holness' reprising of Kingsley Thomas' idea, without stating as such, for a new town (the Opposition calls it a city) between the parishes of St Catherine and Clarendon is worth discussing. Mr Thomas, during his tenure as chairman of the NHT, started acquiring land for such a project.

We also liked the opposition leader's earnestness in insisting on an acceleration of public-sector and tax reforms. For we agree that fiscal containment, with structural changes in the economy, won't produce, in a sustained way, the growth that has eluded Jamaica for far too long.

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