Prime Minister Bruce Golding, in terms of its intellectual context, got it mostly right in his late-night speech to Parliament on Tuesday.

He fully embraced, finally, what this newspaper has been advising for so long - that Jamaica cannot afford a public sector of the size with which it has been allowed to grow for many years, and whose wages and associated expenses will this fiscal year cost $150 billion.

Or, looked at another way, of the revised $561 billion budget approved by Parliament in the pre-dawn of Wednesday, approximately 27 per cent will cover employee compensation and related payments. In other words, public sector wage bill accounts for nearly 11 per cent of gross domestic product (GDP), which the International Monetary Fund has told the administration is too high.

That admonition from the Fund - from which Jamaica is seeking to borrow US$1.2 billion, and whose good housekeeping seal will be critical to raising additional credit from other multilateral agencies - would have helped to concentrate minds.

No action

There are two primary reasons why the administration must seek to put right this matter of the size and structure of the public sector, of which Jamaican governments tend to talk logically, but dither when it comes to action.

As Prime Minister Golding said Wednesday morning, this hulking, gourmandising bureaucracy is an impediment to growth, gobbling up, as it does, "the largest chunk of money in the banking system that ought properly to be going towards financing investments". Indeed, the crowding-out effect keeps interest rates high, which in turn helps to drive debt-servicing costs, which this fiscal year is projected to demand 58 per cent of government expenditure.

Indeed, between them, debt service and wages appropriate $475 billion - that is 85 per cent of the Budget, or 45 per cent of GDP. This cannot continue if Jamaica intends to have an economy capable of robust, private sector-led growth.

We agree with Mr Golding that bluntly hacking at the public sector offers no solution, but it is clear that targeted surgery is an imperative. Few Jamaican governments have had a better confluence of circumstances than the current global crisis to engage in the necessary and bold action. Failure to act now will condemn Jamaica to a limping existence.

Debt-servicing costs

Attacking the bloat of the public sector won't by itself solve the problem. We must simultaneously deal with the matter of debt-servicing costs.

There are many who will argue, with some persuasiveness, that in the current environment we will, even in the medium term, be unable to generate robust enough growth that substantially alters the dynamic of Jamaica's $1.2-trillion debt. Moreover, they will say, neither can the market drive down interests rates sufficiently rapidly to make a fundamental difference to the macro-economic environment.

It is on these two fronts that Mr Golding's remarks perhaps fell short. It was cerebral without a central rallying point and a call for shared sacrifice, notwithstanding his legitimate concerns of the potential responses of external arbiters.

But it is not too late. Mr Golding has set some broad parameters for action. He must build a grand coalition for urgent action on the specifics - each participant required to offer his pound of flesh. For this process can't be bloodless.

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