Government running budget surpluses while people suffer

The Government of Jamaica (GoJ) was running a budget surplus of almost $10 billion or 0.5 per cent of nominal gross domestic product (GDP) during the first three months of the fiscal year, while the country’s medical professionals, teachers, public sector workers, pensioners and housewives continue to suffer on the back of higher food prices, increasing poverty, anti-social behaviour and criminality.

The government also ran a primary surplus of $34.5 billion when only $14.3 billion was needed during the period. The primary surplus is the amount of money that is set aside to service the debt, which is held by rich Jamaicans and foreign institutions such as the Inter-American Development Bank (IDB), International Monetary Fund (IMF), the World Bank and the private capital markets.

For example, although it cost only $1 billion to re-employ the 143 doctors whose contracts expired recently, the government refused to re-engage them despite the increasing demand for their services because of the pandemic. At the same time, they are recalling the doctors who are currently on leave to come back to work.

Meanwhile, the government collected $8.7 billion more than it budgeted for in international trade taxes during the first three months of the fiscal year because of the higher shipping and freight cost but it is refusing to charge these duties on the shipping rates, which existed before the pandemic in order to cushion the impact of the galloping food prices on the consumer.

Similarly, the government refuses to do something about the galloping fuel prices, although it is still collecting the $6.6 billion per annum from the $7 per litre which was imposed to purchase the fuel insurance policy or hedge, which it discontinued in 2017.

The government is also offering public sector workers a pay increase of 2.5 percent while inflation is projected to run above the 4- 6 per cent target range. There has also been no significant investments in agriculture in order to reduce the food import bill and to improve food security.  Very little investments have also been made in broadband technology in order to facilitate a more sustainable and efficient delivery of online education which is key in an environment in which the virus is rampaging and the vaccination level is way below what is required to contain it.