The PNP government is addressing the wrong issues . The IMF program is addressing the wrong problems

I am not an economist and so I cannot speak with any level of authority on matters of economics, but that however does not prevent me from asking questions of those who appears to be better trained in this subject.

I want to revisit all that have been presented to the public from people such as Dr Damien King, Ralston Hyman, Dr Peter Phillips and the IMF on the Jamaican situation.

We have been told that we need the IMF policies to fix our economy dilemma and at the end of this structural adjustment program, we would find ourselves in a better position than at the start of the program.

The big question for me, is why should we believe this will be true and what evidence do we have to suggest that it will be true.

If one should investigate how we got to this point, what would we have jotted down?

  1. Low levels of productivity
  2. High production cost
  3. Low levels of export
  4. High levels of import
  5. High levels of public waste
  6. High levels of corruption.

Some people may want to the add the following

  • a. Too much borrowing ie too much loans.
  • b.High debt to gdp ratio
  • c High public sector wage to gdp ratio

.

If you selected a-c , I would say nonsense, nuttin nuh go so.

What is interesting in this much heralded IMF deal is, these are precisely the one we are working on, to fix Jamaica’s economic situation and everyone is suggesting this will be the solution to our problem.

Now let’s ask the following question:

  1. What factors or factors led to a,b &c
  2. Are those factors still at play in the Jamaican environment
  3. Are any of those factors being addressed by the current IMF agreement?

From my scientific background, I know that to solve a problem on a permanent basis, you must get to what is called root cause. Before you can get to that point however, you must address the causal   factors ie those factors that may have or have contributed to the problems being experienced. Unless those factors have been thoroughly investigated, understood in terms of their contribution to the problem and are eliminated, the problem will return in short order.

The problem is therefore solved when all contributing factors have been controlled or eliminated as the case may be.

This leads me to the following questions.

  1. Have we addressed our low productivity problems?
  2. Have we addressed high production cost?
  3. Have we been increasing out export ( A weak dollar was supposed to boost exports) ?
  4. Have we reduced the high levels of import?
  5. Have we reduced or eliminated levels of public waste?
  6. Have be reduced the high levels of corruption present?

These are not issue the IMF is going to solve for us and after three years I have seen nothing to suggest we are serious about solving the real cause of our economic crises.

Recall I said unless these factors are addressed we CAN NEVER solve the problem.

Now you tell me, when the 4 year program is done, if any item identified in 1 -6 above would have been addressed.

The answer to that question will indicate where Jamaica will be at the end of the IMF program.

When you focus on the wrong set of metrics, you end up with wrong solution being applied and a situation that cannot be sustained as the underlying casual factors were never addressed.

I promise you that as soon as the IMF program is done, we will either seek a new extended fund agreement or our Debt/GDP ratio will start to rise again, because we have failed to addresses the real problems.

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