Caribbean observers will have been watching with interest the efforts of the Bruce Golding government, since its accession to office in Jamaica, to come to terms with what domestic and external observers recognize as a serious economic crisis. The inability of the previous administrations of People’s National Party Prime Ministers P J Patterson and Portia Simpson to cope with the crisis has not been overcome by the new administration. Indeed one could easily have gained the impression that Mr Golding and his Finance Minister Audley Shaw, in spite of their extensive criticisms during the election campaign of 2007, have been surprised at the seriousness of the situation since they came into office, and now they have had to spend a lot of time coming to terms with it before taking realistic action. The consequent widespread perception is that their negotiations with the International Monetary Fund (IMF) have been unduly prolonged.
Over the nearly two and a half years, since the Golding administration has been in office, the serious crime situation with which the country has been gripped has also persistently worsened, with the number of murders this year reaching the number of 1600 so far. And added to this, the Government has been faced with a request for extradition from the United States of a notorious individual, a resident of Prime Minister Golding’s constituency (previously held by former Prime Minister Edward Seaga) , in connection with allegations related to the drug trade. The government seems to many to be temporizing in its response to the American request, while claiming that that they are going through the normal procedures.
These twin situations, increasingly regarded by many as veritable crises of governance, have now been exacerbated by turmoil at the level of decision-making arrangements of the country. For over the last week or so, the longer serving (13 years) Governor of the Bank of Jamaica, Derick Latibeaudiere, resigned after firmly denying over the last few months that he had any intention of doing so; and his act has been followed by the resignation of the Commissioner of Police, Rear Admiral Hartley Lewis, in more or less similar circumstances. Pressure on Mr Latibeaudiere has been building for some time, as the private sector, and apparently the Finance Minister more recently, have been contesting the usefulness of his policy of maintaining high interest rates, the private sector in particular insisting that this was inhibiting investment. On the other hand, the country has now had two Ministers responsible for Security, and two Commissioners of Police over the last two years, and suggestions are that the system has been stressed by disputes over the appropriate strategy necessary to deal with the crime situation.
On his assumption of office, Prime Minister Golding seemed to recognize both the structural, and therefore long-term nature of the country’s economic crisis – a crisis of a persistent decline in bauxite and agricultural production, decline of manufacturing in the face of the NAFTA agreement, and continuing depreciation of the dollar. Undoubtedly he will have been contemplating a return to the IMF which Prime Minister Patterson’s government left after an eighteen-year surveillance by the Fund. In a sense, the global financial and economic recession seems to have eventually forced his hand, though the government’s perception of the implications of such a decision is well indicated by the length of time which the negotiations with the IMF, and signing of an agreement, are taking. Involved in this period, it is alleged, has been a disagreement over strategy between the Governor of the Bank and the government, and clearly this has now come to a head. But in the meantime the haemorrhaging of the economy continues, with official reports of declines in foreign exchange earnings and capital flows, difficulties in obtaining loans on the capital markets, and a Jamaican dollar consistently losing its value.
There seems to be no disagreement in principle, between government and opposition, on the necessity to now exercise the IMF option. Both sides understand that the present crisis is not a function of the global crisis, though it has undoubtedly been exacerbated by it, and that a resort to the IMF cannot be sold to the public on that basis of the wider crisis. But Mr Golding’s indication, during his last Budget, that there will have to be extensive cuts in the public service in particular, would hardly encourage enthusiastic support on the part of the PNP opposition. For one thing, the bitterness of the 2007 election campaign remains. And for another, the PNP would hardly want to put itself deliberately on a collision course with the trade unions (one of which is a long-standing ally of the party) as any cuts begin to bite.
Interestingly during that campaign, the JLP, in recognizing the gravity of the economic and crime situations, was prone to suggest that the public service machinery might not have been up to coping with the situations, and that resort should be made to the private sector. Prime Minister Golding recruited a businessman, Mr Don Wehby, from the successful Jamaican firm of Grace Kennedy as a Minister without Portfolio in the Ministry of Finance. But although he served the two years which he had promised to give, there seems to have been a sense that his appointment led to a diminution of confidence in Finance Minister Shaw. More recently, in announcing arrangements for a cut in the public service, the Prime Minister has introduced as a kind of czar to manage the process, another person from the business sector, Mr Chris Zacca, a senior employee of the Sandals Group, throwing, in some measure, doubt on the ability of the Public Service Commission to deal with the matter.
On the crime front, the Jamaican government, like those in other Caribbean countries, had seemed to lose confidence in the ability of the orthodox kinds of personnel to deal with the crime situation. Recent recruits to head the Jamaica Constabulary (Police Force) have been the Rear Admiral and a former Chief of the Jamaica Defence Force. But both of these seem to have run in to difficulty and to have been virtually forced out. It is probably the case that resort will now be made to a member of the Constabulary. When these changes in the economic and security sphere are taken together, it would appear that after almost fifty years of independence, the issue of the institutional structure of the state has not been satisfactorily resolved.
It must surely be the hope of the Government that the recent changes in economic management will allow an environment in which the path to the IMF can finally be smoothed. But those who recall the prolonged period of economic uncertainty, and lack of persistent growth that commenced with Jamaica’s first structural adjustment programme in 1977, and interrupted only by a short period in the 1990’s, will hardly be looking forward to another stretch of de facto IMF management. And a question remains – whether the institutional and social arrangements of the state will be strong enough to survive it.