Delroy Chuck WHEN WE ask what has brought Jamaica to this sorry state, no one accepts responsibility. When there is success, everyone takes credit as success has many fathers. Failure is an orphan. Why are we not willing to face the reality that Jamaica is in trouble? We are in a fiscal mess but who in authority is willing to step out and admit that the fiscal and monetary policies have failed and new ones are needed. In fact, if we cannot discern and accept that there is a problem then we continue along our merry way until disaster strikes.
With the level of spending, the amount of parties and increased commercial activities everywhere, one would easily get the impression that we are on the right track and there is nothing to worry about. Perhaps we should just eat, drink and be merry. When the multilateral agencies, or our lenders from overseas, see how lavishly we live, then they must worry about their money. It is simply like a banker who lends money to a customer and wonders how the customer is living so lavishly when he owes so much money. There is one word, which the government, its bureaucracy and the people of Jamaica have yet to respect it is that simple word frugal.
GOV'T NEEDS A STRAIT-JACKET
Well, if the government is not prepared to live within its means, it is about time the bankers and lenders, overseas and locally, put it into a strait-jacket and force it to live frugally. The government has backed itself into a corner and the deepening financial crisis gets worse daily without any remedial action. When we listen to the Prime Minister and the Minister of Finance, they do not speak of a financial crisis, they say we have a fiscal challenge, as if the terminology used for the sick and handicapped makes a difference. Now, we have a situation in which government borrows heavily on the local market to finance the budget, to pay salaries and to meet interest payments. At the present, insatiable rate for loans, it won't be long before the government bonds are not worth the paper they are printed on.
The real truth is that this government has sought to empower the state, to bring more authority, oversight and influence over every activity and action of the citizens, without any real benefit. The oppressive state, the enlarged bureaucracy and partisan handouts are the main features of the present government. I will not now deal with the many laws, especially those passed to empower the security forces even more without any improvement in the nation's safety, security and well-being. At present, I am deeply concerned with how the government has used fiscal and monetary policies, ostensibly to protect the financial health of the nation but, regrettably, has caused its financial decline.
Whether the government intended it or not, its spending habits and hence its policies took control of the commanding heights of the financial sector. The government of the past 15 years has lived perennially beyond its means and, amazingly, cannot comprehend the inevitable consequences of doing so. Who caused runaway, nay galloping, inflation, in the early nineties? Who used high interest rates to mop up liquidity to ease the inflationary burden? Who brought about the collapse of the financial houses when businesses buckled under the weight of bank overdrafts and usurious interest rates? Who introduced and gloated about FINSAC as the state instrument to save the financial sector from imminent collapse but now blames it for the fiscal crisis?
GOVERNMENT AGAINST STATE
Interestingly, when financial institutions were collapsing and businesses were downsizing, the government took up the slack and got bigger and more bloated than ever. How many of us remember the Orane Report, which urged government to downsize and reduce its bloated bureaucracy? Having not fully implemented the Orane Report, is it any wonder that in virtually every government department, the budgetary allocation is now used just to pay salaries? There is no money for capital expenditure or to respond to the needs of the citizens. When the mission of government is to empower the state, the government will tax, borrow and beg to maintain the inefficient and bloated state bureaucracy.
If limited government, less bureaucracy and reduced taxation are the surest means to a healthy economy, and they are, can we truly say that our present government would ever implement policies in these directions? Everything the present government has done points to more government, more bureaucracy and more taxation, which, to my mind, are the very antithesis for a good and efficient state. In truth, we have a fundamental problem that must be resolved before we can ever develop our country. Far too many of our leaders believe the government should be the godfather of its citizens, taking care of everyone from the womb to the tomb. Well, this dependency on government for everything has caused our downfall and is the main obstacle to a better and brighter Jamaica.
Even now, the government is unprepared to relinquish its stranglehold over the financial sector and allow the free market to set interest rates, to determine the value of the currency and to build our economy. The powerful state tools available to the Minister of Finance and the Bank of Jamaica's Governor are not used sparingly but unrelentingly to run things. Soon, not even these powerful monetary tools will save the empowered state and its agencies from imminent financial ruin.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by e-mail at delchuck@hotmail.com.
