(Jamaica Observer) An editorial in the Chicago Tribune — one of the largest and most respected newspapers in the United States — which described the Jamaican economy as being in worse shape than that of Greece and an example of what could happen to countries that continue to pile up debt, has been viewed as inaccurate from representatives of both sides of the political divide.
Special advisor to the prime minister, attorney-at-law Delano Franklyn said that Jamaica was not in the same position as Greece which had to make unilateral decisions to reduce its stock of debt, while Opposition spokesman on finance Audley Shaw said it was not true that his party balked at imposing tough decisions to address the debt problem when they formed the government between 2007 and 2011.
The editorial published yesterday stated, among other things, that “the tourism mecca of Jamaica illustrates the catastrophic effects of borrowing way too much, and the painful choices that follow”.
Noting that “more than half of its government spending goes to service its loans”, the editorial described Jamaica as “an extreme example of the fate that could befall Spain, Italy, Japan or, yes, the US, if debt keeps piling up”.
However, Franklyn rejected the comparison of Jamaica with Greece, stating that unlike that European country, Jamaica’s economic solution was being negotiated with all stakeholders and not dictated by the Government.
“While the debt to GDP in Jamaica can be regarded as high, for the Chicago Tribune to have drawn the parallel of Greece is a little bit unfortunate, because we all know of the internal wranglings which took place in Greece, and the fact that Greece had to implement, almost dictatorially, some very serious measures to maintain its economy. In Jamaica, while it is a fact that the debt is a very serious issue, the approach that is being made by the Government is to ensure that we run a very tight fiscal ship and to engage all the stakeholders, because we realise it is important for all the stakeholders to be involved,” he said.
Franklyn said the Tribune’s editorial gave the impression that Jamaica was seeking a loan from the International Monetary Fund when it is in fact negotiating with the Fund to get its approval by putting in place the correct fiscal measures, including reduction of the debt, in order for Jamaica to approach the international market for funding.
Meanwhile, Shaw, a former minister of finance, took issue with that a statement in the editorial that Jamaica’s current Finance Mnister Dr Peter Phillips “says his Government must do whatever is necessary to reduce its out-of-control debt”. Shaw said the editorial suggested that the debt problem was the fault of the previous government.
“That is an expression of ignorance on the part of the Tribune writer. The fact is, it is well established that our debt problem did not start when I became finance minister in 2007,” an adamant Shaw emphasised.
Shaw said further that when the JLP formed the Government “significant game-changing decisions” were made, which resulted in a stable Jamaican dollar for two years, adequate foreign exchange reserves, inflation under control, and growth of 1.3 per cent “despite being a part of the worse global recession in 80 years”.
These game-changing decisions, he added, included the Jamaica Debt Exchange and the sale of loss-making public entities such as Air Jamaica and the Sugar Company of Jamaica’s assets which were costing the country more than J$10 billion per year.