Fri | Jun 5, 2020

Mark Ricketts | Government must call in the IMF

Published:Sunday | April 5, 2020 | 12:26 AM
The International Monetary Fund headquarters building in Washington, DC.
The International Monetary Fund headquarters building in Washington, DC.

Government, having said bye, bye to the International Monetary Fund (IMF), declared quite boldly that it was ready to take charge and defend, on its own, the country’s economic independence. For the Government to swallow its pride and say, “Please, financial leader, can we have some more?” words somewhat similar to Oliver Twist’s, must be difficult.

It is painful, even belittling, to conceive of a word that would let us feel as a nation that we have surrendered our manhood, defiled our political sovereignty, compromised our economic emancipation, by returning to what the late Professor Rex Nettleford would describe with such panache, such eloquence, and with such disdain as “Buckymassa”.

Irrespective of how we want to cherish our economic freedom, the Government, despite its bravado and optimism, cannot manage the economic effects of this pandemic by itself.

Pandemics are serious business. They take a heavy toll on people’s health, wealth, or lack of it, and on their capacity to survive. To make people whole by making them no worse off than they were before the coronavirus pandemic, is impossible for our Government.

When the borders of an import-dependent, small island trading nation heavily dependent on tourism are closed, you know you are in big problems.

Tweaking the annual budget with supplementary budgets, some additions for the Programme of Advancement Through Health and Education (PATH) recipients, and a $200 million here or there to farmers can’t cut it.

Our major sectors and industries, in terms of economic activity, foreign exchange earnings, employment, are limping along, if not devastated. The major employers of labour, such as retail and wholesale, agriculture, transportation, and the hospitality sector, together with its intersectoral linkages, have largely substituted unemployment and underemployment for employment.

When airplanes aren’t flying in, and cruise ships, with their mammoth passenger loads, are not cruising, and crowds are not allowed to gather in an entertainment-driven country as ours, then, so much is at a standstill, that economic activity contracts severely.

For example, when tourists are not here, then transportation and agriculture suffer, and together, they combine to reduce activity in the retail and wholesale sector on which many unskilled workers are so dependent for their livelihood.

Sharp declines in remittances, the lifeblood of many inner-city and rural folks, are disheartening.

With no idea of the intensity, scope, and duration of the pandemic, and with the severity of the economic downturn, the source and supply of funds to the Government will fall dramatically. Meanwhile, the demand for funds will rise exponentially as small businesses close or cut back, large businesses downsize, and individual sources and availability of funds are either inadequate or non-existent.

Shrinking revenues and increased expenditures for a government already carrying a huge debt-to-GDP ratio, provides the Government with little or no resource fallback opportunity. Handicapping it further, recent growth rates have fallen substantially below forecast.

Compounding difficulties

Compounding its difficulties is the high cost of crime and violence and the country’s inability to reduce murders below a thousand in recent years; our high level of electricity theft; the society’s burdensome dependence on social water; too large a percentage not being billed for property taxes; and a high level of social dysfunction.

These realities, during a pandemic and its aftermath, and before real recovery begins, need a lot of money. If funds are not available, that which is bad will get worse. Unfortunately, we do not have a constitutionally accepted National Identification System (NIDS) in place to do ordered allocation of cash disbursements.

I would hate for Government, without adequate funds, to do piecemeal, patchwork, inadequate, and misplaced disbursements, then the hungry remain unfed, the renter is left homeless, former workers without appropriate documents get no money, and crooks and violence producers use the chaos to produce mayhem.

I would prefer the Government to engage with the IMF from now as the institution is already conversant with Jamaica’s economic data and is working with other countries to deal with the COVID-19 financial crises.

In this way, an orderly financial plan, involving other international and regional lending agencies could be structured to help us allow most people to go through this pandemic with financial survival and a retention of some dignity.

More important, ultimate recovery will require the closing of gaps in crime and violence and in the area of social dysfunction.

Working with the IMF is a better strategy because this coronavirus is serious.

Worry understandably stalks the land. However, it is amazing how social media finds ways to lighten the population’s heavy burden, with humour making the rounds.

Imagine, 20 years ago, the world had Johnny Cash, Bob Hope, and Steve Jobs, and today, we have no cash, no hope, and no jobs.

Villagers all over Punjab, India, are still searching for, and wandering, who the hell is Social Distan Singh.

Breaking news from Jamaica: A plant to prevent the spread of COVID-19 has just been discovered on the island. It would take a Jamaican to make such a major discovery.

It is now being dubbed the COVID Plant:

-Plant you butt on you couch or inna you bed.

-Plant you backs foot inna you house and no go nowhere, you hear whey me say.

A Jamaican on the phone to a family friend overseas: “Cyril, me down by the shop with di family while a meking this phone call. “

“Cyril, breaking news in a Jamaica. Me and Tamarenee can’t go anywhere, we have to be in hiding. A 15 people get dagganose.

You a laugh. This is serious. It was on the radio. A 15 people the Government dagganose just since yesterday, and a 30 people dem warranty.”

“Cyril, the Government a walk round and dagganose everybody then put plenty of them in a warranty. Mi phone credit a done. Take care.”

“Papa.”

“Yes, son.”

“It is not dagganose. It is diagnose, and it is not warranty. It is quarantine.”

“Son, you a go a high school, but it is my duty to protect my family, so we not going to walk on the road going home, we going through the bush because I am not going to make the Government dagganose my family and put us in a warranty.”

Mark Ricketts is an economist, author, and lecturer. Email feedback to columns@gleanerjm.com and rckttsmrk@yahoo.com