The United States economy over the last few quarters have been growing at a reasonable steady pace when compared with Europe, Asia, and the BRIC (Brazil, Russia, India & China) countries. Job growth in large part has beaten expectations, and the unemployment rate has fallen to pre-recession levels.
The recession was hard on the average American, where real estate prices tumbled like wildfire, foreclosures shot up, new housing construction (one of the measures of economic activity in the real estate sector) grounded to a halt, and the unemployment rates raced to levels not seen since the Great Depression. However, under the steady hands of President Obama, Wall Street recovered and things are finally coming back to Main Street, albeit not at the same pace as Wall Street.
The recession also hit hard in Jamaica. Businesses folded, people were sent home, real wages tumbled, and an administration was voted out of office due in parts to makings of their own, but more or less due to the derailment of the IMF programme. The country is now in the second year of a four year IMF agreement, the same one that was abandoned by the last administration and the Government is now talking with public sector unions on granting a wage increase after a five year freeze. The simple truth is the Government is constrained by the fiscal space and as such is caught between satisfying pent-up demand for wage increase on one hand, while making sure that the IMF programme remain intact. The choices are not easy and comments by private sector is not aiding or abetting the situation either. It is a gun versus butter situation that the government now faces as taught to me by my late economic professor at Howard, Dr Claire Solan.
Despite the pain, the IMF programme is largely working with the Government, passing all the quarterly tests, with growth albeit not spectacular returning. Construction activities have returned with the construction of the North-South Highway, Moon Palace in Ocho Rios, and Braco Hotel and Resort in Trelawny. Kingston, for the most part with it run down stock of commercial buildings is ripe for redevelopment. However, this can only happen within the context of a stable macro economic environment. The debt as a percentage of GDP is trending in the right direction and if this continues, then more financial resources will become available for investments.
Now is not the time to second guess our position, but more or less to continue on the current path because it has started to bear fruits. It is much like waiting on the sunrise as I sat on the beach at Punta Cana in the Dominican Republic. I waited, but the clouds blocking the rise of the sun over the horizon would just not go away. Daylight broke, but the sun was still stuck behind the clouds. I eventually saw a peak, just a peak of the rising sun, I quickly positioned my iPhone to take the shot. But it was not the sunrise I was expecting. I got up to head back to my hotel room, and as I turned around, there was the sun rising majestically above the clouds. Now is not the time to turn or reject this IMF programme or we may missed the dawning of a brighter tomorrow.