AMONG HIS promises, on which Prime Minister Bruce Golding has made no discernible headway, is the undertaking to restart negotiations on a social partnership agreement with the Opposition being "at the table from the start".

This is an issue on which Mr Golding can no longer dither. It demands immediate and urgent action. For even if, as Mr Golding and his Finance Minister Audley Shaw insist, Jamaica can weather the immediate effects of the global credit crunch from America's sub-prime mortgage crisis, the longer-term prognosis is not particularly pleasant. Which, of course, neither Mr Golding nor Mr Shaw can easily say.

We need only look at events in the United States (US) for the clues to our potential circumstance. The sub-prime crisis has brought down some of the biggest Wall Street names and has caused America's worst financial crisis since the Great Depression of the 1930s. Indeed, the Bush administration and Congress have been working overtime on a US$700 billion bail-out package that would give the Treasury Department the capacity to buy up dud assets and, according to President Bush, "free the flow of credit to consumers and businesses".

Slowdown well under way

But even this intervention is no guarantee that the US will be saved from a prolonged recession. Even if there is growth, Americans are facing tough times ahead. So, too, is much of the industrialised world. Indeed, the slowdown is well under way in the US.

The consequences for Jamaica are obvious. The US, after all, accounts for around 70 per cent of the tourists who visit the island, as well as the lion's share of the approximate US$2 billion a year that Jamaicans abroad send home. America also takes the largest share of the island's visible exports.

Shaping of fiscal programme

The dangers posed by America's crisis have to do with more than the tightening of the global credit market and the price the Jamaican Government would have to pay to raise the additional US$250 million required to close out its borrowing requirements for the current fiscal year. For, even if the Government meets its obligation from its reserves, there remains a small matter of what happens in the next fiscal year and the shaping of the fiscal programme to meet the changed circumstance. Perhaps, more important, is the need for the society to agree on a set of principles for the creation of an economy capable of achieving sustained growth and being in a better position to absorb shocks.

The deeper problem

In the mid 1990s, a government effort at a social partnership arrangement foundered under trade union/private sector suspicion. A new effort early in this decade, led by the private sector, ran out of steam with the passage of the government's deficit crisis and the administration's success in getting public sector unions to moderate wage demands.

The deeper problem, though, has not been solved. Productivity in the Jamaican economy remains low, growth anaemic, the deficit high and the country's debt in proportion to the size of the economy astronomic. It is important, we believe, that we arrive at a consensus on a broad strategy for addressing these issues, as well as for the strengthening of the broader social foundation that sustains a successful economy.

The private sector lost the plot. Mr Golding now has to fulfil his promise of leadership.

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