If we had really paid attention, Jamaica might have learned an important lesson from the country's higglers, and other informal traders, going back to the 1970s.

That message is still applicable today - and is one that we hope was not lost on Prime Minister Bruce Golding and other members of the Government when they met this past weekend for debate on how to shape the Budget for the coming fiscal year. When bureaucracy is oppressive, entrepreneurs will find ways to do business and make profit.

People tend to find their way around bureaucratic obstacles and this, in part, provides a perversely logical explanation for why an estimated 40 per cent of the Jamaican economy operates in a grey environment. Excessive bureaucracy is an enabler of corruption.

There is a correlation between this matter and the economic issues with which Mr Golding and his colleagues are grappling as they attempt to craft a budget.

Difficult task

The Government's immediate concern, under-standingly, is how to end the current fiscal year with its original deficit target of 4.7 per cent of GDP not fully in tatters, yet still deliver a modicum of quality service to Jamaicans. That is a difficult task. For up to the end of November - the first eight months of the fiscal year - the deficit to that point was more than 300 per cent higher than projected even though spending was nearly $13 billion below budget.

The global economic crisis and its impact on Jamaica is a major part of the problem. Demand for alumina is down and the price of alumina has collapsed, so the Government's earning from the bauxite production levy was just over $1.7 billion, or over 30 per cent below target. Domestically, collection of general consumption tax (GCT) fell short by approximately $5.8 billion or 11 per cent during the period. Income tax on pay-as-you-earn employees was marginally up, but that was before firms had to begin to shed jobs to confront the downturn and stay afloat. The bad economy will also mean a shortfall in the corporate tax take.

Things, though, could have been better given the right environment. Mr Golding at budget time pointed out, for instance, that a mere one per cent of firms pay perhaps 80 per cent or more of taxes, and only a handful of the employed labour force pays income tax. Far too many eligible firms are not registered to pay or do not remit their GCT.

Public trust

A major part of the problem, as last year's global competitive index highlighted (Jamaica ranked 86 of 131 countries), is the strong perception here that the country is corrupt and people do not trust politicians. Indeed, on whether the executive and the bureaucracy steal public funds, Jamaica's ranking was 108, and on a scale of one to seven, where one is the pits, the credibility score on this was 2.7. On public trust of politicians, this country's ranking was 110 and the performance score was 1.9.

Mr Golding's urgent task is to dismantle the bureaucracy that stifles business and to show that he is serious about fighting corruption, which must include posting to the backbenches, any member of his government who faces serious accusations of accepting graft, until he or she has been cleared.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.