THE INTERNATIONAL Monetary Fund's (IMF) recent warning that public sector spending and the size of the bureaucracy should be revisited with a view to cutting them should not be dismissed lightly.
Some analysts reacting to these recommendations in the IMF's recent review of the economy have raised the red flag of the likely impact on unemployment rates, social stability and the Memorandum of Understanding (MoU) signed earlier this year by the Government and the trade unions representing public sector employees.
It should be borne in mind, however, that the proposal to cut the public sector further was not made in isolation. Rather, the IMF pointed to positive trends in the economy but noted that there were areas that needed correcting if these favourable trends were to be maintained.
We have long maintained that the Jamaican economy needs a leaner and more efficiently-run public sector to help spur growth. Government must begin to lead by example and cut the fat from its system. On the other hand, we are not unmindful of the short-term social dislocations that would probably occur with further job cuts.
But in reality, the Government is caught on the horns of a dilemma. As long as the economy remains burdened with the albatross of debt, the process of generating growth will be circular requiring the Government to tackle several problems simultaneously. It will therefore be difficult to determine the proverbial chicken or egg in policy implementation.
In this context mention must also be made of the IMF's warning about the urgency of the Government getting the crime problem under control. This point was also reinforced by the Central Bank Governor in his recent discussion of negatives that dog the economy. The figures of more than 900 persons killed since the start of the year are alarming and the situation requires urgent action. It is, of course, an open secret that the Government's ability to confront the intractable crime problem will be constrained by available resources to fund the sector. Again, we suggest, where outside help is available, we should not hesitate to avail ourselves of it. We cannot afford further delay.
Dr. Omar Davies, the Minister of Finance, speaking at a Gleaner Editors' Forum earlier this year, said there was an understanding between the unions and the Government that public sector staff complement was subject to review, the MoU notwithstanding, if developments in the economy warranted it.
The huge debt and the shortfall in revenue in some areas suggest to us that the time has come for the Government to take another hard look at the size of the public sector, to bite the bullet and begin the painful but necessary pruning.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
