Wilberne Persaud, Financial Gleaner Columnist

Jamaica, sovereign, eternally proud and not for sale, can legislate for and implement any policy Parliament deems necessary.

It can choose a Keynesian stimulus package to deal with fallout from Wall Street's September meltdown and subsequent global recession. Will this remedial action achieve the desired objectives?

Three bauxite plant closures, fewer tourist arrivals, low hotel room occupancy accompanied by reduced remittance flows all create a perfect storm of high and lingering unemployment.

Existing central government budget deficits with projected reductions in foreign exchange inflows paint a grim picture for macroeconomic and social stability.

Added to this, commitments in wage negotiations and the wholly admirable goal of protecting the economically vulnerable population lead to proposals for a government stimulus package.

This plainly means creating further budget deficits.

Think this through. Government arranges to spend more than it collects in tax revenue from private sector productive activity, its state owned enterprises and incomes thereby generated.

Bank of Jamaica creates money as government raises loans and the vulnerable benefit, initially.

How? Presumably, subsidies will be extended; pay increases agreed and honoured; potential layoffs avoided.

This maintains local consumer demand and satisfaction for a short period. Soon prices skyrocket as demand overwhelms the traded sector.

Foreign exchange shortage becomes ultra-endemic.

Note, while this happens the policy stands not a ghost of a chance of reopening closed bauxite mines, filling unoccupied hotel rooms, or increasing remittances from overseas Jamaicans. All the latter depend on a rebounding global economy - a result entirely outside the control of Jamaican policy initiatives.

Recall the British plan to tax airline tickets to the Caribbean, the soft Florida real estate market, part trigger to CLICO meltdown, host to the largest node of Jamaican migrants in the United States and 10 per cent US unemployment nationally?

Sovereign Jamaica may only reflect on these things.

So we look to the International Monetary Fund for borrowing. Mind you, loans must be repaid.

It would be nice if it were something like erstwhile colonial grant-in-aid, with no payback plan.

Cease the Iraq war and release trillions, cut expenditure on armaments releasing billions; commit one per cent of Organisation for Economic Cooperation and Development countries' GDP to aid for poorer countries.

Feed IMF balance of payments support funds. Indeed, this would solve the problems of many countries - but not for long.

Yet, morally wonderful, the idea is so improbable as to be deemed fantasy.

What then is the solution? Perhaps once and for all we need to achieve the restructuring of our economic production that can guarantee us economic growth, exploding productivity increases and finally economic and social development.

Lloyd Best recalled in the Fourth Sir Arthur Lewis Memorial Lecture delivered in Basseterre, St Kitts and Nevis - the seat of the Eastern Caribbean Central Bank as he called it - what he and George Beckford referred to as the residentiary sector.

He referred us back to the work of Geisla Eisner who was encouraged by the young Stanley Jevons professor of political economy - that was Lewis' title and position at the Victoria University of Manchester in the English city where Engels once owned industrial interests - to go to Jamaica and study its 19th century economic history.

She "would find to her horror that output per person was about the same in 1930 as in 1832. Labour productivity in 1890 stood at a level 22 per cent below that of 1832. The only structural change had been the foundation but not the development, over the years 1832 - 1850, of the small-farmer, food-producing sector: Peasants, pen-keepers, cultivators."

Lewis himself would study the West Indian peasantry and note how domestic service expanded, migration boomed, petty trades mushroomed - we now call this the informal sector but it is nothing new at all - and visible unemployment increased.

This was the beginning of the 20th century as these conditions built up to the period of the 'riots' in the West Indies: 1935 in St Kitts culminating in 1938 in Jamaica with Norman Manley and Alexander Bustamante their most famously known individual human eruptions.

One may view these events as midwives to modern Jamaica and the West Indies after the Moyne Commission and its recommendations which went only half the way.

Perhaps my drift here can be made clear: Geisla Eisner learnt that "the foundation but not the development ... of the small-farmer, food-producing sector: Peasants, pen-keepers, cultivators," - the residentiary sector - had taken place.

I submit that to this day true development of this sector has as yet not taken place.

We speak of domestic food crop production. Have we ever really wondered why we use those words?

Domestic food crop as opposed to what? Is it economically optimal to import our food and pay for it with earnings from sugar in the long run?

Is subsidised corn meal, chicken back and sardine the answer? Are the presence of higglers and Coronation Market truly the backbone of social stability in our society?

Our economists ought perhaps to do like Lewis and encourage emerging bright young 'Geisla Eisners' to look into the recent economic history of Jamaica.

Comparative productivity

To create comparative productivity estimates, consider the role of the residentiary sector and its immense potential given appropriate technological transplants, improvements and local development.

We could then use IMF funding as a bridge to somewhere: food security, optimised small- and medium-size farms, appropriate technologies wedded to the environment and international up-market demand.

We could finally deal with utterly destructive rural feeder road systems.

We could perhaps use this crisis creatively rather than moan and posture as perpetual victim.

I am not advocating that we are not owed, nor indeed, never should claim reparations.

Yes we should! But in the meantime, what? Sustain garrisons while feeding political associates - should I say 'diehearteds' - both big and small from the deficit slop trough?

Jamaica House in Kingston, seat of government. - File

wilbe65@yahoo.com