DESPITE ECONOMIC CRISIS GOVERNMENT REMAINED FOCUSSED

BY: BALFORD HENRY

Prime Minister the Hon. Bruce Golding addresses Parliament.

For 2009, the Government remained focussed and sought to maintain a climate of confidence, within the context of an expanding global economic crisis, and major fallouts in two of the country’s main foreign exchange earners - bauxite and remittances - while tourism struggled to ride the waves.

Despite   the fallouts, Prime Minister, the Hon. Bruce Golding, assured the country’s creditors that Jamaica’s “unblemished” record of repaying its debt will not be compromised, despite the country’s debt situation.

In his budget presentation in April, the Prime Minister pointed out that over the last four decades, while the rest of CARICOM grew cumulatively by 173 per cent, the Jamaican economy grew by less than 25 per cent, leaving Jamaica with the fourth lowest per capita income in the region.

He also noted that while the country was awakened from its slumber in 1995, when the World Trade Organisation (WTO) rules set in and globalisation arrived, the country still failed to grasp the opportunities offered.

“Since that time, our imports have grown 2 ½ times as fast as our exports. Within CARICOM, our imports have grown 73 times as fast as our exports. As robust as our tourism performance has been, it has not been able to fill the gap. The world is beating the pants off us,” Mr. Golding said.

He explained that Jamaica had been able to sustain a “meagre standard of living” by borrowing and borrowing and relying on remittances from hardworking Jamaicans abroad.

“We are running out of ‘borrowees’ and the Jamaicans abroad are now facing their own difficulties. As Warren Buffet declared, as the Minister of Finance reminded us, ‘you will never know who is swimming naked, until the tide goes out.’ The tide has gone out and we have been left stark naked,”  the Prime Minister said.

The statement was an early attempt to start shaping local minds to the inescapable need for the Government to turn to the International Monetary Fund (IMF) for foreign exchange support. This was needed to fill the huge gap left by the closure of  most of the bauxite/alumina companies, the dramatic reduction in remittances from the Diaspora, and the relative lack of buoyancy in tourism.

Despite the loss of revenues, which ensued, including huge chunks of foreign exchange earnings, the Government continued to service its massive debt payments, which were eating up 57 per cent of its revenues, while battling to contain the deficit in order to keep interest rates under control.  The obvious result was large cuts in expenditure.

Tax Packages

“We had no choice. We had to raise taxes,” was how the Prime Minister explained the Tax Package, which came with the 2009/10 budget in April.

In structuring that tax package, the Government was guided by the recommendations of the Tax Policy Review Committee. The Committee was appointed by the previous Government in 2003, chaired by the current President of the Private Sector Organisation of Jamaica (PSOJ), Joseph Matalon.

It included, among its members, the Opposition’s current Spokeman on Industry and Commerce, Senator Mark Golding and the current Chairman of the Jamaica Confederation of Trade Unions (JCTU), Mr. Lloyd Goodleigh. They looked at the main sources of tax revenue and their impact on the economy, and handed in their report to former Minister of Finance and Planning, Dr. Omar Davis, in November, 2004, but most of the recommendations were ignored, while the borrowing continued.

Although there were indications over the past year from the Government, most notably Finance and the Public Service Minister, Hon Audley Shaw, that the new administration intended to implement most of the recommendations, only a limited number were actually addressed in the 2009/10 Budget.

Prime Minister the Hon. Bruce Golding addressing his first Town Hall Meeting in Mandeville in May. The Prime Minister hosted eight Town Hall Meetings in 2009.

“We have not gone as far as the Committee recommended. They recommended that everything should be subject to GCT. We have not gone that far,” the Prime Minister pointed out during the Budget Debate.

However, that budget eventually proved to be only delaying the inevitable, because a number of the recommendations that were ignored in the 2009/10 budget were eventually included in new tax measures announced by Mr. Shaw in December, as a prelude to a Standby Agreement for US$1.3 billion from the IMF.

In April, Mr. Golding agreed to a 15 per cent  cut in his salary as Prime Minister, as a symbolic gesture, in light of the worsening economic situation and the need to cut government spending.

“Those of us who lead will have to lead by example,” he told the Members of Parliament (MPs), as he also announced that his fellow Government MPs would take a 10 per cent salary cut, following his example.

These cuts were in addition to the MPs loss of their 7 per cent  pay increase due in April, commensurate with the freezing of the 2009/10 salary increase for public sector workers.

With Mr. Golding indicating that public sector workers will not get any wage increase over the next two years, it means that Mr. Golding and his Government MPs will also lose three years pay increase, in addition to their voluntary 15-10 per cent pay cut, as in 2008 the Government tied parliamentary salary increases to increases granted in the public sector.

But, while the viciousness of the global economic crisis and the severe consequences for the Jamaican economy and population stole the headlines for most of the year,  the Prime Minister also dealt with other  important issues.

For example, he renewed interest in the Caribbean Court of Justice (CCJ) as Jamaica’s final court of appeal, by addressing the matter at one of several Town Hall Meetings he held to discuss the budget with the public, that his party was encouraged by changes made to the process of selecting judges for the court, as well as the system of financing the court, which could clear the way for co-operation on the issue.

Charter of Fundamental Rights and Freedoms

Another important matter which Mr. Golding raised in 2009, was the debate on the Charter of Fundamental Rights and Freedoms, which seeks to replace Chapter Three of the Jamaican Constitution, with new rules covering issues such as citizenship, protection from inhumane treatment, the right to a fair hearing as well as the right to vote and marriage.

Debate on the Bill was completed in November, but it will have to remain on the table of Parliament for another three months before passage, as is required for all constitutional changes. It will require a  two thirds  majority for passage, but this seemed to be on the table in November, as both sides moved closer to resuming hanging and joining the CCJ.

Despite his success in getting the Charter of Rights Bill to this stage after nearly two decades of delay, Mr. Golding failed to get Opposition support to push through six crucial Crime Bills, which have been on the table of the House of Representatives since 2008, awaiting bipartisan co-operation to overcome constitutional challenges.

In light of the concern about the high rate of murder, Mr. Golding consistently called for a stepping up of the talks. He said that while preliminary bipartisan talks are being held, they have not progressed as speedily as he would have liked.

Prime Minister the Hon. Bruce Golding on his monthly ‘Jamaica House Live’ programme which allows Jamaicans at home and abroad to interact with him on matters of concern to them.

In early November, he explained to the House the reasons for the resignation of Commissioner of Police, Rear Admiral Hardley Lewin; the firing of the Governor of the Bank of Jamaica,  Mr. Derick Latibeaudiere and his replacement by Mr. Brian Wynter.     

Commonwealth Heads of Government Meeting                   

In November, Mr. Golding and a team, which also included Deputy Prime Minister and Minister of Foreign Affairs and Foreign Trade, Hon. Dr. Kenneth Baugh, attended the 21st Commonwealth Heads of Government(CHOG)  meeting in Port-of-Spain, Trinidad and Tobago.

The main issue at the meeting was the global response to Climate Change. It was so important that Mr. Golding offered  the Opposition a place on Jamaica’s team to the United Nations Framework Conference on Climate Change in Copenhagen, Denmark, in December.

However, while the CHOG meeting focussed on Climate Change, Mr. Golding was also focussed on the future of Jamaica as a middle income developing country.

“There seems to be no clear direction on the restructuring of the International Financial Institutions (IFIs),” he remarked, pointing out that once the current global economic crisis ends, so too will the opportunity to negotiate better terms for middle income developing countries.

Important Visitors

The Prime Minister also welcomed a number of visitors during the year. Vice President of the People's Republic of China, His Excellency XI Jinping, paid a four-day official visit to Jamaica in February, during which a number of bilateral agreements were addressed.

That same month, the Prime Minister also hosted His Majesty, King Juan Jan Carlos I, of Spain, and Queen Sofia for a two-day  State visit, during which the Spanish monarch assured the Government of his country’s continued economic support.

In April, Mr. Golding hosted Canadian Prime Minister, His Excellency  Stephen Harper in the midst of talks on bilateral relationships and a free trade agreement between Canada and CARICOM.

And, in November, the President of Tanzania, His Excellency Jakaya Mrisho Kikwete, visited and signed an agreement to establish a bi-national commission to develop and foster bilataral co-operation between both countries.

During the year, Mr. Golding made Jamaica’s World and Olympic 100-metre and 200-metre champion, Usain Bolt, the country’s youngest Ambassador-at-large.