The case for fiscal stimulus

DURING the period of this recession, one of the fundamental disagreements among economic commentators is how relevant are the teachings of Maynard Keynes.

In other words, in a recessionary environment should one increase fiscal spending, in order to provide stimulus for the economy, or should one consolidate fiscal spending in order to reduce the fiscal deficit?

Those opposing fiscal stimulus, argued in countries like Jamaica, that because of the lack of resources, the only viable option was to in fact cut back on fiscal expenditure and by doing so assist in the reigning in of the ballooning fiscal deficit. This was seen by many as the only way of resolving the economic challenges faced by the country.

Some three to four years after the height of the recession, my view is that we have enough evidence to determine what has worked and what has not.

Approximately two to three years ago we saw different roads being taken by Europe and the US, on different sides of the Keynesian argument. The Eurozone went the way of fiscal austerity and the US the way of fiscal stimulus spending. The result is that the US has seen an improvement in their economic and social environment, while the Eurozone has seen a decline, including an increased threat to the Euro as a credible currency. The table shows trends in the unemployment and growth rates in the EU and the US since 2008.

 

	2008	2009	2010	2011
Eurozone real GDP growth rate	0.8%	-4.0%	1.8%	-0.3% Q4
US real GDP growth rate	1.1%	-2.6%	2.8%	2.8% Q4
Eurozone unemployment rate	7.4%	9.0%	9.5%	10.4%
US unemployment rate	7.2%	9.3%	9.7%	8.5%
Note: The 2011 growth rate is the fourth quarter estimate

The table above clearly shows that the US has seen a faster recovery than the Eurozone, in these key measurements. This is despite the criticism Obama's administration faced about reckless fiscal spending, and the consequent increase in the fiscal debt, during the period of fiscal stimulus. Who is having the last laugh just before US elections now?

In fact, in the recent ECB February Inflation Report, Governor Mervyn King is quoted as saying "...ongoing problems in the Eurozone and fiscal consolidation at home combined to put brakes on growth". US Treasury Secretary Timothy Geithner, only a few weeks ago in a CNN interview said that it is not possible to grow by cutting expenditure in a recessionary environment.

Similarly in Jamaica we embarked, via the 2010 IMF agreement, on a policy of fiscal expenditure consolidation and new tax revenue measures in order to improve the fiscal situation. My argument at the time was that the approach was wrong and would lead to a contraction of the economy and fiscal revenues, as the fiscal side depends on the real economy and in the face of private sector spending retreat any contraction in fiscal spending would also negatively affect the economy and ultimately the fiscal accounts. The result is there for everyone to see.

How do we move forward though, as the economy is still faced with significant structural problems today and the fiscal challenges are even more chronic than in 2007, primarily because the economy is weaker and the capital markets are not as easily accessible as prior to the recession?

One reader wrote to say that my promotion of fiscal stimulus spending, and my promotion of JEEP type programmes, was tantamount to printing money to finance these programmes, which would ultimately lead to higher inflation and an unstable macroeconomic environment. If the reader had read the entire article, however, he would have seen that my argument is for value-added debt financing and not the printing of local currency, which would not be a real resolution to the problem.

One may argue that this will increase the debt to GDP ratio; however, my argument has always been that the level of the debt to GDP ratio is not as important as the trajectory of the ratio, and the use that the debt is put to. Again I refer to 1984 when the debt to GDP ratio went to 212 per cent before declining to 90 per cent in 1990.

It seems irrational to me that if one has a monthly debt payment of $100 per month and income of $50 per month (with non-discretionary expenses of $45), that you can cut expenditure enough to address the debt effectively, or before you die of starvation. While some better spending of income is needed, it should be clear that the only sustainable way to deal with the debt is to increase your income if the plan is not to default. This is what has happened in Greece, and the recent austerity measures will only make the situation there worse.

My own recommendation therefore continues to be that Jamaica has to (i) seek new debt to address value-added infrastructural projects around our areas of comparative advantage, such as tourism; and (ii) reallocation of some of the resources to focus on areas such as green energy jobs, crime reduction, law and order, and agro-processing facilities. At the same time the initiatives being implemented by Paulwell must be timely to ensure that we resolve our energy and consequently competitive challenges.

While proposing increased value-added debt, I do realise that there is a great risk if not implemented properly, but this risk increases the longer we wait to take the necessary bold decisions. The fact is that what we have been doing has not been working. Isn't it therefore time for us to realise that and take a hard look at how we make policy and fiscal decisions. Certainly new taxes and capital expenditure reduction are not optimal solutions.

One thing I can guarantee is that if we continue on the path we have always been on then we can only reap more of what we have been reaping. I can also guarantee that within the context of the current environment, the fiscal consolidation policies we have been pursuing will only lead to greater pain.

We therefore need to ask ourselves what we must do to change course and ensure that we meet the 2030 vision of the place of choice to live, work, and raise families.

Jamaica's options diminishing

THIS is one time when I hate to say "I told you so" as it is in relation to Jamaica's economy. This is because it always seems as if the appropriate prediction to make is that implemented policies will not work and will cause our economic situation to worsen. I can, however, share this feeling of despair with Anne Shirley, Al Edwards, and Ralston Hyman, and therefore say "We told you so", as most other regular financial commentators do not need to share this feeling of guilt.

The recent fiscal and trade numbers point to what we have been saying since 2009, that the taxes imposed and the IMF programme would have had a contractionary effect. Added to this the fact that the IMF agreement was in limbo for over a year and this created industrial instability caused by the decision to reverse public sector wage contracts.

So here we are two years later with tax revenues running $14.5 billion behind target, for the first nine months of 2011/12, which I expect to worsen as we head into the final quarter. In addition, the balance of payments (BOP) for the first eight months of the 2011 calendar year showed a worsening current account deficit over the prior year comparative period of US$647.6 million, or over 150 per cent.

This suggests, in the strongest possible way, that we have not addressed the structural challenges facing the economy. But is this any surprise when the same IMF programme projected that oil imports would move from 14 to 14.5 per cent of GDP over the projected period?

What is more frightening about the fiscal numbers (as shown in the table) are the following:

- When compared to prior year, June, November, and December 2011, all showed reduction in tax revenues;

- For the nine months tax revenues were just up 5.1 per cent, when inflation was approximately 7 per cent, signifying a real reduction in tax revenues;

- In the current fiscal year, tax revenues fell short of budget by $13.3 billion more than the shortfall in the prior year; and

- The last three months of the fiscal year are always the most difficult for meeting tax revenue targets.

Against this background the minister and his team must craft a fiscal budget for 2012/13. This seems like a very difficult task within the context of our political, social, and economic environment. I have always maintained over the years that there are always options that can take us out of this mess, and I can think of a few. If these will be considered is dependent on our political and social environment. Will we take the road less travelled in Jamaica to economic development? I hope so, but history is not on the side of that being done.

What is clear is that because of the fiscal decisions taken since the recession hit us, we find ourselves here today. So all those who thought that Maynard Keynes was just something out of a Mother Goose fairy tale, it is instrumental to note that even Europe is now accepting that they need some stimulus to help create growth, as the fiscal austerity they embarked on two years ago has not worked. On the other hand, the US went the way of Keynes, and provided stimulus to the economy, resulting in growth, even though fragile. The US dollar has once again regained some credibility.

It is evident that our options are diminishing fast, as our failure to take the bold decisions have had persons comparing us with the demise of Greece and other parts of Europe. Instead we should have been compared with the US today, if only we had not discarded the teachings of Keynes.

So it is clear that programmes like the JEEP and Jamaica Employ are going to be critical to move the economy forward. I can think of a few ways that these can get off the ground while having the advantage of improving our BOP and using the least amount of resources. I trust that the cabinet retreat will emerge with a solid programme that will provide the much-needed stimulus.

It is going to be difficult, though, because of limited resources available. I have long said that Jamaica has a bigger accounting than economic problem. But being an accountant, maybe my views are prejudiced.

Apart from the stimulus option, the only other solution to the fiscal problem is to go for more value-added debt through the IMF programme. Going to the market is going to drive up interest rates, so it should not be seen as a solution. And also, cutting expenditure and/or raising taxes are only going to cause a further contraction in the economy.

It is important to reach an agreement with the IMF as soon as possible, as each passing day can only bring uncertainty. It was important for the minister on assuming office to have met with the IMF, and made the announcement of the status as he did. It is important now to finalise the discussions and keep the markets informed about what is happening.

It is also prudent to understand that of the three much-talked- about reforms being pushed (tax, pension, and public sector), only one can practically happen before the next IMF agreement, and that is tax. In the present form, however, the green paper will only serve to continue the tradition of the fiscal priority negatively affecting the economy.

Pension, I have always maintained, is an embedded compensation and therefore requires much consultation in addition to reforming the structure, as all the money has previously been lost in the consolidated fund. Public sector reform was approached in the wrong way and was therefore doomed to long deliberations.

With all that said, what is obvious is that our options are very limited, and it is going to take the best of the minister, his team, and the Government to steer the Jamaican ship through the troubled waters ahead.

The IMF and interest rates

TWO issues that will be most critical in the current economic environment are the IMF and what will happen to interest rates. This is against the background of the weakening fiscal and trade situation that Jamaica faces, as well as the weakening global situation, with Europe still in a significant debt crisis, growth in China slowing, and the US economy still uncertain.

In fact there are two international reports that should cause some concern, both reported on Tuesday January 17, 2012.

In the first report, the World Bank lowered its growth forecast for the world economy down from 2.5 to 2.7 per cent, while at the same time warning of a possible shutdown of a major European economy and a situation similar to the Lehman collapse.

Additionally an article on www.cnbc.com, which states that more investors are going more into cash than stocks and bonds.

What these show is that there is still a lot of uncertainty and perception of risk in the markets. It is when these perceptions lead to negative consumer behaviour that Jamaica will see the effects. That is a slowdown in consumer demand that will have an adverse effect on our foreign exchange earners, and an increased perception of risk means an upward pressure on interest rates.

But even without this slowdown effect, Jamaica still has (and always had) a significant foreign exchange problem. This problem is only exacerbated now because of the lack of a capital market to run to. This means for us that there is no other option for us but to secure a favourable deal with the IMF. In fact it was reported on January 13, 2012 that UBS had warned its investors to stay away from Jamaica's debt until the issue with the IMF is sorted out. The expectation of UBS is that yields would climb, which is consistent with my view from last year that interest rates would trend up. In fact rates have already started to trend up and we have been seeing an increase in activity of government going to the market for financing.

The reason for our current situation stems from the unrealistic targets of the IMF agreement originally which caused us to worsen the fiscal situation through the further contraction of economic activity. This is a lonely position I have always maintained along with Ralston Hyman, while others espoused the need to have the structural adjustments done swiftly. Well, if you take away drugs at one go from an addict, he might go into shock and die.

But here we are with worsening fiscal and balance of payments numbers, and as far as i am concerned they will deteriorate further. So the only practical saving grace, to ensure that inflation, exchange rate and interest rates remain relatively low and stable, will be not only saving the IMF agreement but more importantly getting a more realistic agreement that will ensure sustainable growth. Even with that, there will still be upward pressure on inflation and interest rates. This is why I have always maintained that the government needs an independent team to advise them on solutions. But I am just a minion so I don't expect it will happen.

What is certain is that the challenges we face are significant, as these realities have to be balanced with the expectation from the manifesto declarations, particularly the JEEP programme.

Whatever the promises were, however, it is important to take a realistic approach to the issues. One such is the matter of the rollback of GCT on electricity charges. This, in my view, would only be of short-term (maybe for two months) benefit to consumers. Instead what we need to do is use that fund of around $2 Billion annually to reduce the dependence on electricity by providing a credit to taxcompliant individuals who install renewable energy solutions at home.

An argument was made to me recently that this will not benefit small businesses, which in my view is a very narrow way of thinking about it. If consumers have more disposable income because of lower electricity use, they will have more money to spend with businesses, resulting in greater economic activity and profits for businesses. The only thing that will help industrial use of electricity is cheaper distribution costs in the medium term, and new energy sources in the long term. My choice, of course, has always been coal.

Telecommunications landscape

From as early as April 2011 I wrote that the Digicel-Claro deal was a red herring, and I see that it is still being focused on as LIME's Waterloo. In June 2011, after reviewing LIME's financials, I indicated that although LIME had cash resources for about two years or so, the business model and regulatory environment would eventually lead to their demise. The key regulatory issues being number portability and cross-network charges. What we will be careful of when addressing particularly the latter is that government does not start setting rates and overregulating, as this will surely kill the industry also.

Today it is obvious not only that LIME is close to shutting down, which would be the prudent decision with the current environment and business model, but more importantly that Jamaicans could once again face a monopoly when the telecommunications sector is so important to productivity.

So we are almost a year after my article and nothing has been done to address the regulatory issues, which I think speaks to the uselessness of the OUR, just as they seemed impotent in the JPS situation. I am happy to hear that the Minister is going to take it into his own hands to ensure that the environment is changed to accommodate greater competition. It is important that this be done immediately, as the ones who will really suffer are the consumers.

What is important from the above is that it is critical that we find immediate solutions to (i) the IMF agreement; (ii) the fiscal challenge; and (iii) the cost of energy.

Facing the challenges ahead

One certainty of the upcoming fiscal and calendar year is that it is going to be difficult and will require all hands on deck. This is why it disturbs me that when I look at some of the messages on social media, I see young persons, apparently expressing their disgust that the PNP won the election, saying that they expect that they will fail as a government. This is similar to the sentiments I saw expressed in 2007 by young persons sympathetic to the PNP.

It is interesting to note that these statements are not coming from the politicians who lost but from young persons who are supposed to be tomorrow's leaders. If this is the situation, then what hope do we have for tomorrow? Don't we have the sense to realise that if the PNP fails, no part of Jamaica will be spared? It is not that one area will do badly and the other will do well, based on the occupation by party supporters.

My message to these persons is that they should do everything in their power to make sure that the government of the day succeeds because 2012 is going to be a difficult year, and any wrong move could affect us for a very long time to come. Unless, of course, they have dual citizenship and don't plan to live here.

With that said, I want to look at some of the challenges we face as a country. Let me first say that while I believe that there will be significant challenges ahead I do not believe that they are insurmountable, and further I do not believe that there has to be a heavy dose of bitter medicine to resolve the challenges. It depends on how the situation is handled.

What is certain is that if the wrong moves are made then any slippage is going to have a significant negative effect on the country. One may say the following:

o But there is macroeconomic stability and this means that things are improving and we are on a path to growth; or

o But we have been here before, for example the financial crisis of the mid-1990s, and we managed to bring the economy back to small but consistent growth prior to the recession.

The difference this time is that we are working from a weakened position.

While I agree that there is macroeconomic stability, as I have always said, the best way to achieve stability in a patient is to kill the patient. So the reason why all our macro targets look good is because of the lack of economic activity. So everything seems stable. In fact when economies grow significantly, and start to overheat, the macro variables are never stable without monetary and fiscal policy intervention. If left unchecked, inflation and exchange rates will increase based on demand from growth.

What we have failed to remember is that the primary role of governance and economic policy is for the improvement of the standard of living of the people in the country. So managing to improve macroeconomic numbers, while the majority of the people get poorer, is bad policy. This is why I have always held the view that a Keynesian approach in a recessionary environment is not only necessary but is a responsibility of governance. We are now seeing the effects of the pro-cyclical and fiscal-oriented approach, as is being shown in the fiscal revenue targets.

This brings me to the other point, where one might say that we have been here before. Sure we have seen significant inflation and exchange rate movement in the early 1990s, and to some extent the early 1980s. We also had a significant recession in the early 1980s. We also saw many business failures in the mid-1990s. The difference is that in the 1990s and 1980s we had a very big advantage that we do not have today and that caused us to be able to find a way out of that crisis. We had access to debt through the capital markets.

There is a significant difference between today, the 1990s, and the 1980s. Without the ability to borrow money, or receive grants during those two periods, we would have seen a significant economic problem. The problem Jamaica has always faced is one of not being able to afford what we want to consume, whether it is on the government accounts or balance of payments (BOP) side.

Today what has happened is:

o We have a worsening BOP, with the first seven months of 2011 showing deterioration in the balance of payments by over US$600 million, and a current account deficit of over US$900 million. This was caused primarily by an increase in oil imports of over US$550 million and in addition associated freight costs. It is for this reason that I have always emphasised each time the need to deal with our energy situation as a priority. I am supportive of Paulwell's approach and hope that we can achieve this soon.

o Our fiscal revenues are some J$8.5 billion behind target, wile our expenditures are only J$3 billion behind target. This means that our fiscal deficit is J$5.5 billion worse than projected. I expect that given the low demand environment this situation will worsen.

But alas, there is no capital market to run to and get money unless we are willing to offer higher interest rates, and even so persons will be a lot more wary and unable (because of their own circumstances) to take up GOJ debt. What is certain is that there cannot be a JDX2 unless we want to see a serious problem in the economy. Also the FDI flows that helped us in the 1990s to 2000s are no longer there. In fact it seems more profits are being sent abroad than those coming in.

The government is also faced with the challenge of having to provide jobs, and I think has made the right decision that it is not practical to lay off public sector workers. This is something I have been saying for a while, as the redundancy cost and the negative effect on a stagnant economy would be impractical. Additionally I also agree that pension reform is not something that can materialise in the short term. I think, however, that we can start the process of tax reform in short order. We don't have to implement everything at once, but certainly it is important to pick the low-hanging fruits as soon as possible. How do you in the short term just change an embedded compensation package? Apart from equity issues it is just not an easy task.

So then what do we do? We have a worsening BOP and fiscal deficit and little ability to manoeuvre. It seems obvious to me and comes right back to the argument I have been pushing for the last few years. The only real hope is to grow our value-added debt, as was done in the mid-1980s, and ensure that what we use it for is greater than the cost. I don't know anyone with monthly income and debt payment of $50 and $100 respectively, who can reduce their debt by cutting back on expenditure.

Our only viable option right now is to get an extended fund facility with the IMF, as this is not only the avenue to IMF funds but also other multilateral funding. This means that we must save the IMF agreement, as without the IMF there is little else that can be done. And as I have always said, the targets we were pursuing were doing nothing more than contracting the economy while we were running out of options.

There are some policy moves that can be taken to make things easier ,and I am hopeful that this will be pursued by the government.

At the individual level, this is the time to get out of unproductive debt and consolidate your own expenditures.

Why the JLP lost–a lesson for governance

I have been seeing some of the comments by the young labourites. They range from sadness to anger and results a lot in accusing the PNP of vote buying and ballot stealing. I am almost pretty confident that both sides may have sought to engage in these nefarious activities but even if there was some of that it did not affect the results.

I think the PNP gave a solid whipping to the JLP, and there are reasons why. Primarily amongst them is that the JLP, from around two years ago, started to lose touch with the people.

When then PM Holness announced the election I said to supporters of both sides that the PNP would win the election. As far as I was concerned, the PNP was working the constituencies for far longer, there were outstanding issues in the IMF and JDIP, I think more time would be needed for the people to warm up to Holness, and an election between xmas and new year was not going to upset people’s vacations (low turnout). A low turnout is always good for the PNP because of their larger and more committed base.

It is important to remember that economies and people are primarily motivated by micro issues, and not the macro, and so the idea of the IMF programme achieving the macro targets and no consistent stimulus package being put in place, was bound to result in job losses that caused the major swing in apathy from the JLP.

As I consistently said, the IMF programme was pro-cyclical and resulted in economic contraction further than what was necessary and a big part of the contraction resulted from the tax packages.In other words too much fiscal focus.

Combined with this was public sector salary and pension issue, which created much isolation, and this combined with the economic decline / job losses from the global effects, resulted in a growing resentment of government, especially when unnecessary expenditures were reported.

The Holness factor helped but this was wiped away by the poor campaign by the JLP, especially when compared against a better one by the PNP and a PNP manifesto that communicated better despite continuing less details. Remember Jamaicans don’t read much and so the shorter pictorial PNP manifesto communicated better. The PNP also presented a younger team (even if it just perception) and the JLP focused on a younger leader, while in error focusing on attacking PSM. Add to this some slip ups during the campaign.

So in the end the people either voted against the above or didn’t vote because of it. It is important to understand that economies and people are driven by micro issues, which also means that with a more aware, and jobless, citizenry, the election would have been won by the attention of MPs and candidates in the constituency.

In the end it boiled down to the PNP having a closer connection with the people and running a better campaign, which in the end was a more positive campaign on issues than the JLP’s. So it is not that vote buying or anything like that lost the election. The answer is in the mirror.

This is also a lesson for anyone that governs Jamaica from now as Jamaicans seem to vote a lot more on representation rather than national issues.

What is necessary in 2012

AT the time of writing the polls have not opened as yet. But whoever forms the next Government will still be faced with the global and local economic challenges in 2012.

Globally we can look forward to the following:

* Much weaker Europe, and an overall weak global economy;

* Oil prices I expect to continue their upward trend;

* Inflationary pressures, as governments seek to avert economic downturn by expanding money supply; and

* Consumer spending to see some recovery but remain relatively weak when compared to pre-recession levels.

Locally, I expect that these global factors will have an impact, at least in terms of limiting our earnings potential. The truth, however, is that much of what happens to Jamaica in 2012 is going to depend on the policies we pursue.

One of the things that we must start to understand is what drives economies. In other words, as I said last week, the first question that should have been posed to the candidates in the recent debates was, what is your explanation of the problem? It is a simple question, but the truth is, unless we understand the problem then we can never find the appropriate solution, and I think that this is what has escaped us for years, if not decades.

I do not think that we have an understanding of what our real issues are. Our inability to define the real problem Jamaica faces has caused us not to grow this economy in any meaningful way since 1990.

I have long said that economies are nothing more than the behavioural interaction of people, as they go about their business of satisfying everyday needs and wants. It is important to understand the link between Mazlow's Hierarchy of Needs and economics.

As people satisfy more and more of their basic needs, they move towards economic activity that leads to self-actualisation. And the price of self-actualisation is higher than the price of basic needs. So it stands to reason that the more satisfied people are, the higher the value of expenditure, which will lead to greater economic expansion.

This is illustrated by countries like the US, where as more and more persons become wealthy they start demanding products that cost more. This means that manufacturers of goods and services can increase revenues, and also more business opportunities become available. The trick to this expansion is that it must be done from earnings and not from debt, as the US found out in 2008, and this is what contributed to our problem. Otherwise, the whole house of cards will come falling down.

It is this lack of focus on the consumer that has been at the heart of Jamaica's failure to achieve sustainable economic growth. An examination of our policies over the years will reveal that we have focused on the fiscal accounts or growth without earnings. In other words, the central focus of government policy has been either growing consumption with debt or taxing Jamaicans every year to stabilise the fiscal accounts.

The fact is that this approach will not work, and it is important that going into 2012, whoever forms the Government understands this. Moody's has indicated that the policies of the Government must continue in 2012 if we are to maintain their rating, and we could see improvement if we continue the policies. While Moody's is generally correct, there has been a missing ingredient in our policy that is working against greater economic success. This is what has always been missing from as early as independence.

We have failed to recognise the importance of the consumer to the economy and so have failed to realise the sustainable growth that we need. We have praised economies such as Singapore and the US, and have held them out as models that we need to emulate. But what we have failed to understand about what makes these countries great is that their primary development focus is centred on protecting the individual rights of citizens (from other citizens and the state) and ensuring that everyone has access to the same opportunities. This is, fundamentally, all we need to strive for, and the rest will follow.

If we ensure that (i) citizens' rights are protected, (ii) everyone has the best opportunity to succeed (which includes access to education and health), and (iii) discipline and structure are enforced, then I guarantee that the economy will see unprecedented growth and development, as persons move from the lower rung of Mazlow's Hierarchy to the top.

If this is done, then the market will drive greater innovation and value.

However, as I have long argued, in a stagnant environment just coming out of a long recession, the market needs a push. This is where Keynesian policies must be pursued, and is why the IMF agreement was pro-cyclical. This is why stimulus projects (whether you call it JDIP or JEEP) are important, and necessary. What we must ensure is that they have the necessary parliamentary oversight for transparency, but even more important, I think they must provide the maximum benefit to the economy. My preference is a focus on infrastructure and renewable energy projects, for the maximum benefit to be derived.

It is important that people have meaningful jobs. Jamaica's unemployment numbers from even in the 1960s reveal the lack of focus on full employment as a government policy.

So as we go into 2012, with a newly formed Government, we need to try a new approach. We need to put the individual rights and opportunities of the people at the centre of our policies. We must focus on employment opportunities as a part of that.

We will never achieve the development we want without this, because if people are always concerned with justice and red tape, then there is no room for innovation and they will remain at the bottom of Mazlow's Hierarchy, which is where underdeveloped economies find themselves.

After 50 years it is finally time for us to break away from the colonial structures that seek to protect state against subjects and truly make the citizen the primary focus of our democracy.

Go out and vote

Tomorrow is election day and I just wanted to ad some thoughts after observing what has been happening over the past few weeks. I have observed the accusations and the fanatical way in which our young persons in particular have approached our politics, and am not feeling good about our youth.

I am not speaking particularly about the candidates but rather the supporters, who when I look at the FB posts and comments I find it disheartening as the comments are really not about the issues but the attacking of personalities. When will we get away from this sort of politics. Maybe I am idealistic but I believe that Jamaica deserves better than this.

My message to everyone is that you should all go out and vote, as it is not only the most fundamental democratic right that our forefathers gave their lives for in some instances, but is also a responsibility to your country. Anyone who ignored this responsibility and either didn’t enumerate or doesn’t plan to vote I think it is a betrayal to democracy.

I would never tell anyone who they should vote for, and do not want to have a conversation on that, so if there are any comments on this post then please do not introduce any tribalistic views. They will be ignored but I would love any comments on the issues, which I will entertain that discussion going into tomorrow if I can help to clear up any thoughts anyone has.

When you have privately thought about the issues please go out and vote, as it is a responsibility we have to our country. And vote on what you think is best for you and your country.

I personally am tired of the tribalistic approach, as whichever party forms government at the end of the day it is our government if we call ourselves Jamaicans and whoever is elected government on Thursday should get the support of everyone because I do not know of any part of Jamaica that will sink while the other part stays afloat.

The competitive nature of election is good because it helps to preserve our democracy but when it is over we need to move forward as one country, and make for a better place to live for all.

Do you know where you're going to?

Do you know where you're going to?

Do you like the things that life is showing you

Where are you going to?

Do you know...?

— Diana Ross, 1975

We could ask ourselves these questions after we listened to all three debates and digested the manifestos, leading up to the election on December 29th. Indeed these questions are critical ones we need to answer before we place our "X" on Election Day.

This is one of the disappointments I had after the debates, as they seemed to be anti-climatic. True, they got progressively better, starting with the disastrous youth debate, but can anyone honestly say that after listening to the debates we know where we are going to?

What we know after the debates is what we knew before. We know that it is necessary for the country to maintain its fiscal discipline and extend the IMF agreement; public sector, tax and pension reform is going to be critical going forward; there must be a real focus on quality and access to education; there must be continued focus on governance and corruption; energy costs must be reduced; bureaucracy is a major inhibitor that must be addressed; the justice system needs to be reformed; the debt and productivity issues must be addressed.

Prime minister Andrew Holness and Opposition leader Portia Simpson-Miller during the leadership debate on Tuesday.

We knew all that before the debates and it seems as if that is all we still know after. One of the major problems is that the Debates Commission did the country a disservice with the format of the debates, which they tried to correct in the last one (which improved it somewhat). The fact, though, is that it didn't seem as if the debates were designed to unearth any additional information and direction for Jamaicans, but were designed just to appease the need for debates to be held. So I would think that more blame for the failure is at the feet of the Debates Commission than the participants. After all, the participants only answered what was asked and didn't have to worry about much follow-through because of the format.

So as a country we need to seek our answers elsewhere. Let me pause to congratulate Peter Bunting and Danville Walker for hosting their own local debate, which is a really progressive move.

I think we could get more information from the manifestos, which give a pretty comprehensive view into the thinking of both parties. And both parties must be congratulated for coming out with such comprehensive documents in such a short time, as both do show a clear understanding of what the issues are and lay a foundation for more specifics.

They do attempt to answer the question posed above, that is "do you know where you're going to?" They do include very detailed descriptions of where they want to take the country, by looking not only at general policy issues but some specifics as to what is to be done to achieve those policy objectives. I think the JLP document includes more specifics, but the PNP document communicates better and emphasises more consultation.

The JLP places greater emphasis on private sector-led growth; as opposed to the PNP that emphasises more government-led growth. Interestingly though, on the important matter of energy, the JLP seems to prefer a more involved state solution unlike the PNP that emphasises a market competition model.

Even so, I feel that neither document directly addresses the real structural issue with the economy but does so in a roundabout manner.

So if the time spent on the debates had been spent focusing on analysis and discussion of the manifestos, it would have had greater benefit to the understanding of where both parties want to take us. The truth is that there is not much policy difference between both parties, as is expected because our options are very limited, and so what is important for us to understand is who can better take us to our goal, as we have suffered in the past from an almost deceitful relationship of broken promises, much like a dejected spouse.

This takes me to the main criticism of both manifestos. They are too long and because of this length they fail to communicate an overarching vision to the electorate. Their failure to provide an executive summary has left the reader without a framework of the vision of the manifestos. They seem to be an attempt to provide something for everyone, and so have talked about everything under the sun in the attempt to satisfy everyone. But by doing so they lost the direction and emphasis of the policies.

So the manifestos do a better job of telling us where we are going to, but because of the disorganised presentation and the amount of information, we are not sure of how we will get there.

What was needed was a statement of general objectives, which the PNP document sought to do, but this should be around a central theme of development. And the documents did mention the main areas of focus at the start, but the way the rest was written veered from the stated emphases. In other words, if they were answering exam questions the body and conclusion of the answer would not connect with the introduction.

This is not difficult to correct, however, and it would be a good strategy for both parties to summarise the main points and present them to the electors, who are more concerned in this election about "what are you going to do for me?" than "what have you done for me lately?". The latter seems to be where some of the old-style politicians want to focus - including the awful youth debate, which surprisingly had more old-style politics and inaccuracies than the two latter debates.

So since the debates have failed to deliver, my suggestion is that we go to the manifestos, which provide a lot more information and only need some more attention paid to wading through much of the unnecessary and repetitive content.

To all my readers, have a happy holiday.