Bulgaria’s leadership has announced it is planning to resign following mass protests against austerity measures, the country’s prime minister said.
“I will not participate in a government under which police are beating people,” Prime Minister Boiko Borisov said. “Every drop of blood is a shame for us.”
http://rt.com/news/bulgaria-government-resigns-protests-144/
JAMAICANS TAKE NOTE !!
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Warren's Blog 
I hope you aren’t suggesting that the Jamaican government go any way other than austerity at a time when our debt-to-GDP is 130%+. Austerity measures are almost always going to be unpopular and contractionary to an extent, impeding economic growth. By the Keynesian alternative is stimulus and although expansionary stimulus would be ideal, the deficit spending and public borrowing that it requires isn’t an option. Austerity seems to have failed in Europe while stimulus seems to have delivered an acceptable level of success in North America. But stimulus IS NOT AN OPTION FOR JAMAICA.
My point, any sensible government to lead Jamaica right now would be implementing austerity.
Actually, austerity has “failed” in Europe because it has never REALLY been implemented except in those countries which have successfully brought themselves out of recession outside of the spotlight (i.e. the Baltic republics): http://mercatus.org/expert_commentary/two-kinds-austerity and http://mercatus.org/video/austerity-blame-europes-economic-woes
Based on over 100 instances of austerity measures in OECD countries from 1970-2007 (as seen in this paper: http://www.nber.org/papers/w15438) it would seem that stimulus (spending increases) is as you rightly said NOT AN OPTION for Jamaica. But neither is an increase in taxes. The problem is to how cut public spending in a country with a very inefficient private sector (that’s the reason we cannot compete with anyone whether they are inside Caricom or outside of Caricom) and a labour market that is essentially clogged with far too many people who are not qualified but have links for jobs. Essentially what Jamaica probably has to do is something like what Cuba did and release public sector workers with a kind of parachute into the private sector (so providing support in the form of tax concessions, zero percent interest loans and a few small grants for these persons to start their own businesses).
However that is not what the IMF is recommending…..
In other news some sense seems to have finally prevailed somewhere and GCT has been removed on about 30 energy-saving devices for renewable energy and energy efficient and the CET has been suspended (this time at least they have gone about the proper way of obtaining a CET suspension rather than that haphazard and shamefully inept way done by Samuda years ago) on 16 energy saving items.
News, really.
GCT exceptions should NEVER have been removed in the first place.
Correcting a wrong is only prudent.
Take note of what? The government isn’t going to resign because of protests. A state of emergency and island wide curfews is more likely.
Portia will not stand by and allow the police to “brutalize” poor people 🙂
Maybe she’ll simply label them enemies of the state?
Poor jay doesn’t seem to realize that the Bulgarian political system is very different from the Jamaican political system. The Jamaican system is run under first-past-the-post as in the UK and USA resulting in a two party (or in the UK in a 2 and 1/2 party) system. Bulgaria uses proportional representation with multi-seat constituencies resulting in multiple parties coming into parliament and governments almost always being formed from coalitions of parties. Under FPTP coalitions are unlikely and governments are far more stable since governments are frequently formed by a single party. Under PR with coalitions, a government can fall if enough members of the coalition lose confidence in the government and the main party accepts the inevitable outcome.
What’s your point. Who cares that the political system is different?
What I am particularly interested in is the ability of our leaders to recognize when they are failures and move out to the way.
The political system may be different. the problems are the same and the solutions are …… ???
My point is that you clearly don’t understand what your writing about in this post. And it’s demonstrated in your response.
You are interested in the “ability of our leaders to recognize when they are failures and move out the way”…really? So what does a Bulgarian government which is constituted via the proportional representation electoral system and which resigned a few months ahead of scheduled elections have to do with that?
In Bulgaria you can easily get coalition governments as in 2005-2009 (which can fall apart) or minority governments (which is what happened this time after the 2009 elections).
By their very nature minority governments and coalition governments are more susceptible to falling ahead of time for the mere fact that there is no clear majority in government from the parliament.
If you seriously believe that parliamentary politics (for instance the protests being used as an excuse by the opposition which combined has a majority of seats to pass a no-confidence measure in the government) and electoral politics ( for instance forcing early elections before your party’s support is eroded even further in a few months) did not have a greater impact than the protests themselves then you are being extremely naive (quite possibly intentionally given that a lot of your earlier writing wasn’t silly).
If you read about the story you will see that the Bulgarian prime minister either had a sudden attack of this ability you speak of (less than 24 hours before announcing the resignation of his government he had declared a willingness to fight on “to the end” at a different news conference) or never had it at all and was influence by other factors (such as electoral tactics).
After all, if elections are called in say early March or April and Mr. Borisov’s GERB party were to actually win a slim majority or be able to lead a stable coalition government, do you seriously believe for one minute that he wouldn’t be back as prime minister? If so, how does that square with an ability to recognize failure and move away? Has Mr. Borisov announced his retirement from politics entirely? If not then again how does that square with what you claim to be concerned with? Because logically it does not. If Mr. Borisov really did recognize his failure and wanted to move away and make way for fresh ideas and faces he would not only have announced his government’s resignation but his own retirement from politics.
Do you honestly believe that without these protest that the government would have resigned?
I think the answer to that question is a resounding no, despite the fact that things were bad. Most times we are unable or unwilling to make honest assessment of our own performance and is so doing, believe we are doing a great job, when in fact we are doing a very poor job.
Case in point the current government, one would want to suggest that there is not much more they could have done(as in the past) or not a lot they can do now to make the situation any better.
Its this thought process that makes us willing to accept nonsense, because we accept our limitations, refuses to think outside the poverbial box and hence fail to recognize the other possibilities.
Successive Jamaican governments have practised austerity measures from the 1970’s and despite the claim that its the “best” medicine in times like these, show me the results where it has made the economy any better off?
If one choose to do the same thing that got you to where you are there is a great chance that you will continue to be where you were and that is the Jamaican reality.
The people voted out the JLP partly because we did not want austerity, we want prosperity, which is a clear indication that we recognize that austerity will only make our lives nothing more than a living hell.
What the Bulgarians have said to the government, despite the fact that an election is due in a few months, is we have had enough of the BS and they have done it in the streets given that(in their minds) there are few other options available to send a clear message right now!
So what are the parallels between the situation in Greece and Bulgaria and Jamaica ?
What were the response of the people and what was the response of the government, reluctantly as it may be.
Am I suggesting that we riot and burn down the place, not at all as that would be counter productive.
What I am instead suggesting is the people of Jamaica send a clear and decisive message to this government (since they are in charge now) that this is it. This is your final chance to get it right, we can longer and is unwilling to go down the path which we have travel for the last 40yrs.
We have been for the most part very passive in the face of great challenge and out passive behaviour should not be mistaken for weakness.
The Bulgarian people wait for close to 4 yrs to get to where they are today and decided that enough was enough.
When will Jamaicans make that decision ?
Sent from my BlackBerry® wireless device from LIME.
“Do you honestly believe that without these protest that the government would have resigned?”
Actually I believe a lot depends on what Borisov saw in terms of the polls. If the polls pointed towards a drastic collapse in support even without protests by the time elections were scheduled in July I would imagine Borisov would have attempted to get early elections somehow.
The fact that less than 24 hours before Borisov was being bellicose seems to have been missed on you. Borisov is just another political actor who will make volte-face decisions most likely based on political considerations and less so on moral values.
That you can ascribe some kind of morality in politics (recognizing one’s failings and moving on) to a person who has been alleged to have links to organized crime (including money laundering, murder and allowing/aiding crime bosses during his time as interior minister) and who once as a security guard protected Bulgaria’s former communist dictator Todor Zhivkov leaves me wondering.
Again, Borisov has not announced his retirement from politics which is what he would honestly do if he recognized his failings and decided to move on. Instead what he has done amounts to a tactical retreat because he seems quite intent on remaining in politics and thus offering himself for the top job WHEN circumstances are right for him personally.
“Successive Jamaican governments have practised austerity measures from the 1970′s and despite the claim that its the “best” medicine in times like these, show me the results where it has made the economy any better off?”
Firstly, did you read any of the 3 links I provided above? If not, please do so now and then provide me with examples of where “successive jamaican governments have practised austerity measures” of the kind outlined in those links as being the kind of austerity that is successful. I’m having a hard time remembering when it was that Jamaican governments made deep and comprehensive tax cuts (coupled with spending cuts) instead of tax increases (even the last administration cut taxes in some areas but raised them in others (like in GCT) and the current administration has done the reverse; dropped old tax cuts and waivers and dropped GCT back to the old rate. As a matter of fact most Jamaican governments have probably never achieved a net spending decrease or only a marginal one at best. For example the last government divested Air Jamaica (spending cut) but instituted free school and free health care (spending increase).
“The people voted out the JLP partly because we did not want austerity, we want prosperity, which is a clear indication that we recognize that austerity will only make our lives nothing more than a living hell.”
I can see from this that you didn’t read any of the 3 links (or any of the other articles by Ms. de Rugy.) I dunno Jay, but Ms. de Rugy has a PhD in economics and her articles are well written and accompanied by data to support her contentions (for instance a quick look at this article will show that despite undergoing “austerity” Greek government spending by 2011 was still at or above what it was BEFORE the financial crisis hit: http://mercatus.org/publication/european-austerity-government-expenditures-country). If you want to make an argument to counter this, it would be good if you could show Jamaican government spending and taxation levels from 1970-2012 to demonstrate: (1) when any Jamaican government ever instituted deep spending cuts and (2) when any Jamaican government ever instituted deep tax cuts alongside spending cuts and thus show that austerity of the kind she is talking about and which Professor Alberto F. Alesina and Silvia Ardagna in that nber (National Bureau of Economic Research) paper are talking about. I would not be surprised if you found that instead of any of that being achieved what was done was merely rearranging deck chairs on the Titanic (even during Seaga’s time you had the government making spending cuts but then spending on a lot of things for electoral politics and investing in failed Spring Plains project which racked up multimillion dollar losses (before being divested by the next government) and seemed uncomfortably like a cover for exporting illicit drugs to the United States from Colombia).
“What I am instead suggesting is the people of Jamaica send a clear and decisive message to this government (since they are in charge now) that this is it.”
So how DO you suggest that the people of Jamaica send a “clear and decisive message”? And it really is a stretch to expect others to believe that you weren’t thinking that Jamaicans should do as the Bulgarians did when your post was just a simple “JAMAICANS TAKE NOTE!!” following a quote about mass protests in Bulgaria. You can and have written far longer blog posts, so why leave your readers guessing as to what you mean in this one only to have to explain later in the comments?
“The Bulgarian people wait for close to 4 yrs to get to where they are today and decided that enough was enough.”
I see your history of Bulgaria only starts in 2009. You might be surprised to learn that from 1946 to 1989/1990 Bulgarians put up with far worse than anything that ever pertained in Jamaica before finally deciding enough was enough.
And really, this very simple and easy to read article on her blog should just say it all for you: http://mercatus.org/publication/austerity-numbers
Note that the IMF has not been recommending that kind of austerity in Jamaica’s past (or if it has the Jamaican government has been ignoring it in favour of the balanced approach).
Oops, meant to say:
If you want to make an argument to counter this, it would be good if you could show Jamaican government spending and taxation levels from 1970-2012 to demonstrate: (1) when any Jamaican government ever instituted deep spending cuts and (2) when any Jamaican government ever instituted deep tax cuts alongside spending cuts and thus show that austerity of the kind she is talking about and which Professor Alberto F. Alesina and Silvia Ardagna in that nber (National Bureau of Economic Research) paper are talking about does not work, at least in the Jamaican context.
I would contend that the austerity they are referring to has never been tried in Jamaican history (or if so very rarely and abortively) so it’s a bit premature to announce it has failed and will not work.
I will get to the article soon, I have been responding from on the road.
Sent from my BlackBerry® wireless device from LIME.
@ Jon
What is clear from the articles written by this economist, is Jamaica the measures that have been annouced by the government are unlikely to lead to a reduction of debt to GDP ratio and neither are they likely to result in growth.
What is also clear it there still exist confusion even from some economist as to which type of “austerity” measures are likely to lead to a reduction in debt/gdp ratio. What is also interesting is most have not used the measures as in tax cuts and reduction in fiscal spending and have actually done the opposite.
It leads one therefore to ask the question, why does this high level of confusion exist. Clearly as in many things, its not an exact science and governments are not necessarily are about to do anything that they believe can result in less revenues.
Thanks for the links, they make for interesting reading.
Austerity means different things to different people. For some people, austerity means adopting a debt-reduction package made of a mix of spending cuts and tax increases. For others, it means adopting a package made mainly of spending cuts — including reforms of social programs. The lack of a distinction between the two meanings of the word — and hence, the distinction between two different debt-reduction policies — is unfortunate
Third, the data show that 80 percent of the attempts to reduce the debt-to-GDP ratio are failures.
Very starling figures and begs the question, why does so many get it wrong?
It may not be an exact science but the idea of cutting revenue is something that runs counter to the “common sense” or “gut feeling” instincts of most people who want to reduce debt. Hence despite the research using over 100 examples between 1970 and 2007 showing that countries which did this (and crucially cut spending) and the recent examples of countries like Sweden and Latvia doing the same thing and successfully coming out of recession, many governments and economists and policy makers are loth to do it and instead prefer to muddle through with the balanced approach to budgeting (which is better for elections anyway since you raise taxes and people complain but if you cut spending on people they tend to not just complain but get upset enough to consider voting for the other guy). This is probably because too often folks are concerned with trying to reduce debt directly and thus reduce the debt/GDP ratio from the side of debt instead of trying to reduce debt indirectly by growing the GDP and not the debt (which of course also results in a reduction of the debt/GDP ratio) and by cutting spending more than you cut revenue so that you still generate a surplus.
I noticed during the IMF’s agreement with the previous government no mention was made of attempting to primarily grow the GDP in order to reduce the debt/GDP ratio. Instead the focus was on cutting the debt and doing so partly by cutting jobs in the public sector so that the they would fall into line with the current and targeted debt to GDP ratio (rather than raising the GDP so that the public sector employment would be in line with the new GDP levels).
Jay, the next election is due at the end of this current government’s five year term and will only be called if THEY choose to call it early. This is a DEMOCRACY you see and I would encourage you to wake up and smell the coffee. you are under a lot of illusions as to why the JLP lost the last election, just go back and read what they were saying to the pollsters for example.
Take a hint why protests will be stillborn
http://www.jamaicaobserver.com/news/This-is-crunch-time–says–Butch–Stewart_13671182
PSOJ has better understanding of waiver
http://rjrnewsonline.com/local/psoj-has-better-understanding-of-government-waiver-system-says-zacca