Recent developments will reinforce the views of those who claim that Prime Minister Bruce Golding is less than politically astute and is surrounded by economic advisers who are inept and incompetent and whose backs we should now be seeing.

Indeed, in a properly run country, given the latest debacle over taxation policy, Finance Minister Audley Shaw would, by now, have handed in his resignation and Mr Golding would not have been far behind. But this is not a properly run country.

In any event, the fall of the Government at this time would bring no good. The other lot has no great record and an election now would only exacerbate the country's economic instability, undermine its credibility internationally and, in the process, push Jamaica closer to economic ruin.

Reversing the crisis demands a broad national effort, demanding that the Opposition People's National Party (PNP) drop its plans for street protests and engage in meaningful dialogue to fashion a credible consensus.

No economic growth

The PNP must recognise its role during its 18 years in office, when there was little or no economic growth, in bringing Jamaica to its current situation. The private sector and other stakeholders must also be at the table, helping to craft the initiatives to drag Jamaica out of this mess.

The process must start with the Government conceding, at least to itself, that it has bungled badly on the economy and admit its need for help. That the administration, new in office, misread the depth and breadth of the global economic recession at its onset might be forgiven. But by Budget time in April, there ought to have been no doubt about the crisis confronting Jamaica.

With a public-sector deficit at the time at more than eight per cent of gross domestic product, and the administration turning to the International Monetary Fund (IMF) for loans, the Government announced a tax package of more than $18 billion, including a hike in the tax on petrol and removal of the exempt and zero-rated status from a number of items that escaped the general consumption tax (GCT). The implementation of the GCT arrangement was badly bungled.

Humongous fiscal deficit

By September, it had become clear that the initial Budget was not credible. It was overhauled.

Then last week, faced with a humongous fiscal deficit and a need to satisfy IMF preconditions for US$1.2 billion in credit, Mr Shaw unveiled a J$21-billion tax package, which included raising the rate of the GCT by one percentage point to 17.5 per cent, and narrowing the goods and services exempt or zero-rated for the tax. In the face of complaints that the new measures were skewed against the poor, Mr Golding has promised to review the package.

There is the context to last week's development. It was preceded by ongoing public discussion about the efficacy of the Government's tax policies and economic programme, from which neither Mr Golding nor Mr Shaw was insulated. They mounted a strong defence against opposition suggestions for a special tax on finance houses or on interest income earned from investment in government bonds.

There was a sense of certitude in their positions, now to be followed by the prime minister's waffling uncertainty. Mr Golding, if he is to help Jamaica and rescue his premiership, must urgently convene national partners and recall Parliament in the effort to fashion a fix.

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