As he battled before his Parliament last Friday night to survive a vote of confidence and keep secure the European Union's (EU) €100-billion bailout package, Greece's outgoing prime minister, George Papandreou, made a stirring plea for honesty from political leaders.

Where Greece And Jamaica Collide

 

 

As he battled before his Parliament last Friday night to survive a vote of confidence and keep secure the European Union's (EU) €100-billion bailout package, Greece's outgoing prime minister, George Papandreou, made a stirring plea for honesty from political leaders.

The core of Mr Papandreou's case was that the crisis facing Greece was deep, that the medicine for recovery would be harsh and bitter, and that those whose job it was to administer had an obligation to tell the patient the truth.

Dishing out harsh, uncomfortable facts, though, comes neither naturally nor easily to politicians. They tend to be at home using slithery tongues and mellifluous tones to sell ineffective snake oil as cure-all.

There is a time, however, when enough is enough. And for Greece, that time is long past - as it is forJamaica. Which is why this newspaper believes that the Greek crisis, and Mr Panpandreou's speech, are relevant to Jamaica.

Indeed, this country is at the proverbial fork in the road and it is time that its people be told frankly what lies on either path, fully cognisant that neither will be easy.

After years of profligate borrowing, Jamaica, like Greece, has a major crisis of debt that constricts its economy, threatening to push it into Greece-like turmoil. Our debt, officially, is around 130 per cent of gross domestic product (GDP), which, on the face of it, is 22 percentage points lower than Greece's. But as we have noted before, Jamaica's official debt figures do not reflect arrears and off-book obligations.

Greece's unemployment is just over 16 per cent. We say ours is just shy of 13 per cent. That, however, does not include the large swathes ofJamaicansin marginal jobs, or more than 300,000 young people who are unattached or have dropped out of the workforce altogether.

Last year, Greece used 112 per cent of all revenue collected bythegovernmentto service its debt. That is within the range Jamaica has spent over several years to service its debt. Both countries, therefore, have to borrow to meet other costs. The problem, though, is that fewer people are willing to lend to either country, and if they do, they demand a premium on the price of the debt. This concern is reflected by last week's downgrading by Standard and Poor's of its outlook for Jamaica and a warning that it could downgrade the country's debt.

Painful adjustments

The Eurozone countries, which have previously pumped €152 billion into the Greek economy, have offered another €150-billion bailout, but have demanded that Athens push through new austerity measures, including slashing public-sector jobs, cutting and/or freezing wages, loweringgovernmentpensions, increasing taxes and reducing social services. It is the inevitability of these that Mr Papandreou urged Greek politicians to be candid, which Jamaica's thinking middle class must demand from the country's politicians on the campaign for the imminent general election.

For years, Jamaican governments have fudged on austerity. Indeed, recent increases in public-sector wages and pensions derailed the country's bailout programme with the International Monetary Fund. It will require heavy, painful lifting to get it back on track.

In Athens last night, Mr Papandreou and the opposition leader agreed to forge a unity government which stands the best chance of having Greeks imbibe their medicine. We feel the same about Jamaica.

 

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