JAMAICANS FOR Sustainable Development (JSD) is calling upon the Government of Jamaica to present the Supplementary Estimates as quickly as possible in response to the recent downgrade by Standard & Poor's (S&P), as well as in the preparation of the country's letter of intent to the International Monetary Fund.

This is imperative in order to improve confidence in the management of the economy, given the massive deterioration in the fiscal accounts during the first quarter of this year when compared with the same period last year.

Correcting the problem

The fiscal deficit raced to $35 billion during the first quarter of this year, up from the $8 billion recorded during the same period of last year.

The $63 billion in revenues collected during the first quarter of this year was eight per cent below last year's level before adjustments for inflation, but we note that finance and public service minister Audley Shaw has still not outlined what will be done to correct this problem.

Jamaicans for Sustainable Development also contends that S&P warned the country that it would have been downgraded to CCC+ last year if the fiscal accounts did not improve significantly, and since then, there has been a marked deterioration of these accounts during the last quarter of fiscal year 2008-2009 and during the first quarter of the fiscal year 2009-2010.

Compress expenditures

In light of the above, the minister and the country should not be surprised that S&P took the decision to downgrade it to CCC+. Given the deterioration in the revenue accounts, it is clear that the government will have to compress expenditures, and the two largest items in this area are debt-service payments and wages and salaries, which together, account for 77 per cent of the budget.

Jamaicans for Sustainable Development is, therefore, calling upon the administration to focus on how to develop a credible debt profile by clearly outlining the steps, which will be taken to bring the budgeted expenditures in line with revenues.

Wage payments

This must include the outstanding wage payments to public-sector workers and all those accumulated public-sector expenditures, which are currently being concealed off-budget through the use of so-called creative accounting. We also want the administration to tell the country about the state of the divestment programme and how the deviation from the various projected timelines will impact on the $13.5 billion in revenues projected from this programme for the current fiscal year.

I am, etc.,

Dickie Crawford

Convenor

Kingston 8