Davies... trying to correct serious cash flow problems.
AS JAMAICA'S ballooning debt nears unmanageable proportions, and the fiscal balance sinks deeper into the red, Dr. Omar Davies, Minister of Finance and Planning, has signalled an intent to stem the unsustainable flow of funds through Government coffers.
He held a high-level meeting yesterday, with Permanent Secretaries from the 16 ministries. According to sources, during the meeting at the Finance Ministry's National Heroes Circle offices, central Kingston, Dr. Davies tackled the chief administrators on the levels of spending within their ministries and sought to drive home just how serious a problem he has with cash flows.
This follows previous advisories to public sector agencies to put a freeze on hiring, and subsequent instructions to enter into payment arrangements with creditors.
The Gleaner was told that Dr. Davies was likely to make a statement on the outcome of the meeting at today's sitting of the House of Representatives, or after the next Cabinet meeting.
Prime Minister P.J. Patterson is on his way home from the Commonwealth Heads of Government conference in Abuja, and is expected back by the weekend.
The Gleaner attempted to contact the Finance Minister yesterday afternoon, but was told that he was in another meeting. Nicole Thompson, his assistant, downplayed the significance of the morning meeting with the Permanent Secretaries, stating that there was "nothing unique about it." But other sources told The Gleaner that the Minister has only one such meeting a year and it usually precedes the Budget.
The Gleaner was told that there was no discussion of any impending staff cuts - an option that Dr. Davies himself had mooted to trim the "unsustainable" wage cost in the public sector.
At a recent breakfast hosted by PanCaribbean, Dr. Davies said it "is not feasible" for the wage bill to continue at its current rate of growth. He told the gathering of business people that the Government would have to look for a trade-off between employment and the rate of growth in salaries, in its attempt to balance the national Budget by 2006.
Yesterday's meeting was limited to the chief executives of the ministries. A senior official at a key ministry told The Gleaner late afternoon that he had yet to hear the details of what had taken place at the Finance Ministry's offices.
"It was such a highly sensitive issue that no one went except for the Permanent Secretary," he said.
A source close to another Permanent Secretary said that her boss "was very upset" on returning from National Heroes Circle. The Permanent Secretary, the source said, was angry about suggestions made about overspending in her office.
Speculation about the content of Dr. Davies' address to the Permanent Secretaries has been augmented by the recent public revelations of serious Government indebtedness.
In recent months it has come to light that the security forces, under the aegis of the Ministry of National Security, owe suppliers more than $500 million for goods and services. At the same time Grace Allen-Young, Permanent Secretary in the Ministry of Health, has revealed that her ministry owes $3 billion to its suppliers, and Robert Pickersgill, the Minister of Transport, has admitted to his ministry owing contractors almost $500 million as well.
The Finance Ministry is also grappling with a $12 billion debt, owed under the deferred financing programme - payable over several years - and a $8.5 billion arbitration award to the National Transport Co-operative Society, which it is now challenging in court.
