The announcement by the owners of Alumina Partners (Alpart) that they will close the refinery in a month's time is another piece of bad news that should hardly have surprised anyone, and certainly not the Government.

It is not, however, a development over which Prime Minister Bruce Golding and his ministers have the time to mope. If anything, they should be already steeled for the tough times that are already here and the hard decisions that the Government must now take.

We do not sense, though, that it is quite seized of the depth of the difficulty faced by Jamaica. And, even if Mr Golding and his team do have an intellectual grasp of the situation the country is in and the policies required to drag us through the hard times, they have not demonstrated an understanding of the need to, or the skills required to mobilise the Jamaican people to support what, inevitably, will be hard decisions.

Best-paid workers

On a purely human scale, the closure of Alpart will be of profound consequence. About 900 permanent employees, among the best-paid workers in Jamaica, will lose their jobs, adding to the more-than-200 part-time employees who were let go earlier. Several communities around the Alpart refinery in Nain, St Elizabeth, will be hurt.

But it is not only Alpart that is in trouble. Rusal's two other refineries in Jamaica, at Kirkvine and Ewarton, with a combined one million tonnes of alumina a year, have already halved production and reduced working hours for employees. It is unlikely that that they can resist the storm for much longer. The communities around them, too, will feel the impact.

But the effect on the finances of the Government and broader inflows in the country is more immediately measurable, and, already, the picture is not pretty. It is likely to grow uglier.

For example, at the start of the fiscal year, which ends March 31, the Government was projected to pull in $8.645 billion from the bauxite production levy. At the end of January, it was $2.81 billion or 40 per cent below the $7.04 billion expected up to that point. At the end of the fiscal year, the shortfall will perhaps be closer to 45 per cent.

It will get worse

Things, however, will be worse in the coming fiscal year when output from the island's bauxite/alumina facilities will decline by around two-thirds, with a severely negative impact on earnings via the levy as well as corporate and personal income tax from the firms. Over the last four years or so, the industry has spent an estimated US$400 million on capital works. This will dry up.

It would be bad enough if these difficulties were confined to bauxite/alumina, but it is across the economy. More tourists may be arriving in Jamaica, but they are paying less. And, remittances are down.

With a fiscal deficit that will likely reach six per cent of GDP, the Government has to take firm action. New taxes are expected.

However, we advise the administration that it must reduce the bloated size of the government. The wage bill of $111 billion, before a new round of increases, is unaffordable. Perhaps 20,000 jobs will have to go. It is for Mr Golding to have the will and the capacity to make the case.

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