THE DEBATE on the Appropriation Bill and the Estimates having been concluded in both chambers of our Parliament, the focus now shifts to the action which will be taken by the government to correct the dangerous course on which the economy seems headed.
Advice and comment are flowing from every corner. Social commentators relying on ordinary household common sense and professional economists digging deep and drawing on their learning are all agreed that it cannot be business as usual.
They are all calling for action and changes of policy, including, among other things, rescheduling our debt and going to the IMF. Yet the harsh reality is that only the government has the power to initiate the changes necessary to get the economy back on track, or at any rate, firing on enough of its cylinders to maintain a correction of course.
The reports requested from committees of the social partnership by Prime Minister Stuart are now in the hands of government and we hope that their advice will be a mixture of practical proposals of a kind and quality to enable speedy implementation.
We stress practicality because some of the interests competing for government’s attention as it seeks to grapple with current problems bear an unreal face. Salary increases of the order of 23 per cent may be theoretically justified by increases in the cost of living and higher prices and the length of time since the last increase; but in the current economic and financial difficulties facing the country, harsh practicality must trump theory. Harsh as it may seem, we simply cannot sink the boat while it has sprung a leak.
That was the focus of the speech of Senator Darcy Boyce, Minister of State in the Prime Minister’s office, who brought his professional competence as an economist and accountant and former deputy governor of the Central Bank to bear on his presentation.
We agree with the general sentiments of the senator, but we cannot ignore the political reality that a failure of policy for which the senator is collectively responsible has brought us to this juncture.
That failure has been manifested in the anaemic growth of the local economy. Indeed reports suggest that our economy is registering the lowest growth of regional economies; and growth is a factor to which the learned senator adverted when he told the Senate that even for a ten per cent salary increase the economy would have to grow by about $300 million.
Given the right policies, executed in a timely manner, this achievement would not have been difficult. Economists the world over have said that the wrong policies can exacerbate any recession but the right policies can mitigate its impact.
With all the information now in its possession, the government and the Ministry of Finance must identify the right corrective policies and put them in place. It must not be afraid to accept the public advice of former Prime Minister Owen Arthur simply because of politics. Nor should the advice of the social partnership committees be disregarded simply because an election is due next year.
The recently held forum by First Citizens Bank told us that the situation, though grim, is not hopeless. We share this view, and we also agree that tackling the deficit and reprofiling our debt while stimulating growth must now be priority aspects of any new policy to pull us out of our difficulties.
At this time, it matters not if the policies are imported or home-grown so long as they are right.
