Jamaica Gleaner
Published: Sunday | May 3, 2009
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Hardship budgets

Martin Henry

In that era of black and white, one-channel [JBC] television, we didn't have any. So, on that February night in 1972, we huddled around the radio listening to the election results coming in - late into the night, not early like now. 'Better Must Come'. Things didn't quite turn out that way.

That election night - as a youngster in high school - was my first conscious engagement of the political process and I have been a keen - and distressed - observer ever since. I am writing this in Budget silly season particularly for younger Jamaicans, 30 and under, whose timeline doesn't go back past the PNP administration of 1989-2007. In the entire time that I have been a political observer since 1972 and then public affairs analyst as a Gleaner columnist since 1987, every single budget has been a hardship budget. There is nothing peculiar or particularly out of line with this year's.

Worst hardship budgets

The worst hardship budgets were those between the middle 1970s and the early 1980s, around '75 to '82. Almost every macroeconomic index was a disaster and the people were grittily sucking salt through a wooden spoon.

Prime Minister Michael Manley's 1978 Budget Debate presentation [captured in Delano Franklin's Michael Manley: The Politics of Equality] was a hardship gem. The prime minister began, "Everybody knows that we have dealt with the International Monetary Fund because the country has no foreign exchange ...

"There are some things in the present economic package that are tougher than we would wish and will exert more pressure on the people than we would wish. I would like to approach my contribution to the Budget debate by beginning where the people are hurting, which is discussing the problem of prices, the problem of shortages."

Manley went on to defend price controls, increased taxation, which "bears hard upon the people", and the size of the Budget. He announced price inspectors, and explained a devaluation brought on by failing an IMF test and made a plea for increased production to earn foreign exchange. He lashed out against corruption and, in closing, asked the country to prepare for "the long haul".

To varying degrees, budgets since Independence have trumpeted sacrifice and raised taxes, while Government has delivered inadequate basic services.

On his part, Prime Minister P.J. Patterson opened the new millennium in his 2000 Budget Debate presentation with a concern over the perennial crime problem [Delano Franklin, The Challenges of Change: P.J. Patterson Budget Presentations, 1992-2002]. Mr Patterson explained [away?] the "pressures felt by the Jamaican economy in 1999" acknowledging "the difficulties of the last two years". Gratuities got tax exemption, which Shaw has brought back into the tax net.

The work of FINSAC

The then prime minister reported on the work of FINSAC in restructuring the broken financial sector. And, eight years into his prime ministership, there was still the need for "a comprehensive modernisation and reform programme designed to achieve an efficient and competitive economy and ensure its successful integration into the world economy". The same sort of sounds Shaw is now making nine years later and which the Opposition and others expect to have been accomplished in the two years of this administration.

Despite some 'development' under an unbroken string of hardship budgets, Jamaica's fundamental problems of under-development have deteriorated. The most basic problems hampering development and human welfare that the country faces are crime, the debt burden, and systemic poverty which marginalises a significant portion of the country's productive capacity.

This situation is neither inevitable nor innocent.

Most of the ministers of finance since Independence are still alive and active. Their pronouncements in Budget presentations can be extracted from Hansard, but I have neither time nor capacity to do it. Somebody should. I have to rely on resources at hand. Thanks to Trevor Munroe and Arnold Bertram and their data tome, Adult Suffrage & Political Administration in Jamaica, 1944-2002, I don't have to go by memory for ministers of finance: Donald Sangster [deceased], Edward Seaga, David Coore, Eric Bell [deceased], Hugh Small, Seymour Mullings, Hugh Small, Omar Davies and Audley Shaw. Didn't P.J. Patterson do a stint? Can't find him in the book.

I challenge any of these men to show that they delivered anything but hardship budgets. As a post-politics Distinguished Fellow at the UWI, Seaga has collated and digitised his papers. His output was presented to the public last Thursday. This should make research even easier.

As a memory backup, I have scanned the free Gleaner archives on the Internet which has the later Davies years of Budget debates. The Sunday Gleaner of April 15, 2007, reported on what would be Davies' last of 14 continuous Budget presentations as follows: "Despite attempts by Finance and Planning Minister Dr Omar Davies during his Budget presentation ... to brush aside perceptions that this year's budget is election-driven, analysts have described his strategies to finance the 2007/2008 budget as electioneering and disastrous.

"Some say while the strategies appear workable, there is no doubt the Government will have to go the route of borrowing to finance the ... budget to make up for shortfalls, sinking the country further in economic debt." And there was increased taxation, including a brand new environmental levy on all imported goods.

Casting blame

The minister of development and welfare, Edward Seaga, speaking in the Budget Debate on June 13, 1962, eight weeks before Independence, noted that, "Our expenditure exceeded our revenue over the past few years [explained as the fault of the previous Norman Manley administration]. We now have to seek loans. It has placed us in the position of saving what we can save and spending where necessary - a policy of retrenchment. Too much austerity would lead to political instability; on the other hand, too much spending would have led to financial instability; and so we chose the middle of the way."

Forgoing particular explanations and blame casting, this is where Audley Shaw, minister of finance, was on April 23, 2009, except the situation is more dire! "The core structural deficiencies in our economy have existed for decades and are home-grown. A high debt burden, an inefficient and inequitable tax system and a culture of corruption are not new and were all made in Jamaica by Jamaicans. Navigating our way through these challenging times will require tough decisions and shared sacrifice."

"Our history is replete with missed opportunities; in the past [and present?]. We have placed political opportunism above the national interest; for too long we have postponed the inevitable and believed that we can 'do the same thing the same way under the same conditions yet expect a different result'."

Martin Henry is a communications consultant who may be reached at medhen@gmail.com or columns@gleanerjm.com.

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