More Good News

The numbers for the fiscal deficit were released recently and they revealed more good news.  The deficit for the first three months of the financial year was just over $10 billion but this figure was $5 billion less than what was projected.  Considering that a big part of the cost of dealing with the state of emergency would be included in those figures this represents an excellent accomplishment.  When we add to that the passing of the IMF test for the same quarter then we are continuing on our long journey to financial independence.

However, we are still a long way from where we want to be as despite the improvement we are still operating in deficit.  This means that we are still borrowing in order to meet our recurring expenses.  The ultimate aim is to be operating in surplus so that we can actually start paying down our indebtedness.  Another challenge facing the country is that the economy continued to decline although by less than expected.  We have discussed at length that any solution to Jamaica’s financial problems must include growing the economy.  This is how we will increase the number of jobs available, the collections from tax revenues and the standard of living for all persons.  There has been a lot of focus on cost control but now the emphasis must be on job creation.

Another challenge facing the government is how to deal with the amounts owing to the nurses, police and teachers.  The problem arises in that they agreed to pay certain amounts but the worldwide economic recession has hindered their ability to pay.  We can see that many countries throughout the world have had to cut the salaries of civil servants in order to help balance their budgets.  There are however consequences to such actions and one only needs to look at Greece to see what is happening.  The quandary for us is whether we should increase the pay and reduce the number of staff or maintain the salary levels and retain more staff.  The situation is compounded by the fact that there is not sufficient staff in the schools and hospitals and reducing the numbers will significantly impact the quality of the service that these institutions offer.  There are also no other jobs available in the economy to absorb these persons.  The government will need to negotiate with these bodies very carefully with a view to finding a satisfactory solution but always bearing in mind their financial responsibility.

The challenges continue but if each Jamaican should play their part and with God’s help we can make Jamaica a better place in which to live.