WE MUST applaud the Minister of Finance for moving to control the wage bill in the public sector. Perhaps as bad as sucking salt through a wooden spoon, is the tart pulp of the tamarind fruit which can force a Finance Minister to purse his lips with a slight shudder and, in turn, cause him to tighten the financial purse strings of the nation in order to meet the fiscal deficit targets set out in his Budget.
The tamarind season is descending on Dr. Omar Davies at a time when a national Gleaner poll shows that 84 per cent of Jamaicans think the economy is in a mess and 65 per cent of poll respondents feel that life for them has become more difficult as a result of the Minister's 2003/2004 Budget. One can sympathise with Dr. Davies while at the same time noting that he has brought much of the distress upon himself by the rate at which he accumulated debt over the years.
In a defensive stroke, the Ministry of Finance has clamped a freeze on hiring, promotions, upgrading and reclassifications of public sector employees without the Minister's specific approval. Over the last five years public sector salaries and wages have been increasing faster than the rate of inflation, an annual average of 12.4 per cent. This results in a national decline in productivity and the job freeze instituted by the Ministry of Finance is probably long overdue.
It is but one step removed from the formal wage freeze introduced by Mr. Seaga in a previous regime. At the time this was successful in lowering the rate of inflation but was politically unpopular.
The Government needs to take another step to deal with the ballooning wage bill in the public sector. As a country, we cannot afford to stick to an earlier commitment to bring the salaries of public sector workers to within 80 per cent of their counterparts in the private sector. We see no other option but to renegotiate this deal with the various unions representing these workers. We recommend this to the Government
It will be interesting to see how the trade unions react to the Davies ukase and we urge restraint. The Government is facing a serious cash-flow bind and, in the national interest, must take steps to deal with it. Shut out of the international financial markets because of low ratings by the credit agencies, the Government has been forced to borrow locally to close the Budget gap. It has tried to reduce local interest rates but as soon as they reach a certain threshold, the Jamaican dollar begins to devalue against its US counterpart. The central bank has tried some judicious interventions but can hardly risk its Net International Reserves sinking below the US$1-billion mark where it is now hovering.
We urge support for the Government's move to control its wage bill.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
