Put EPOC-style body on Vale Royal agenda

EVEN AS we endorse Nigel Clarke’s exhortation of Jamaicans towards post-IMF economic independence, it would be sensible, this newspaper believes, for Jamaica to enter another Fund agreement to lock in the fiscal discipline the country has exercised over the past six years.

At the same time, the Holness administration, in framing post-IMF architecture, should take on board Peter Phillips’ proposal for the legislative entrenchment of an EPOC-style oversight body for the country’s economic and social affairs, which, largely, is an advancement on Richard Byles’ idea.

Jamaica’s three-year, US$1.64-billion standby agreement with the International Monetary Fund will have run its course in another 18 months, and, barring a major upheaval, will expire without the histrionics, tensions and policy stand-offs that Jamaicans usually associate with IMF agreements.

In the event, it will be seven years of a stable partnership with the IMF, going back to the Extended Fund Facility, when Dr Phillips’ party formed the government and he was the finance minister. But counting the prior year’s preagreement conditionalities, the fiscal prudence – that is now reflected in a balanced Budget, a largely primary and declining debt – stretches back to the better part of a decade.

Dr Clarke, the newly appointed finance minister, is, in the circumstances, on good grounds in celebrating the achievements and in urging the country to avoid a reversal. The country had to manage its affairs in such a manner, he said in a recent speech, “that our exit from a programme relationship with the IMF is sustained over time, with no need to return”.

We believe that a bit of background may be useful in the context of those remarks. Things can go bad, and politicians, a calling to which Dr Clarke is relatively new, are notorious for running even good policies off the rails.

Second, Jamaica’s strong performance under recent IMF agreements benefited greatly from the efforts of the Economic Policy Oversight Committee (EPOC), which robustly, especially for the first four years under Mr Byles’ leadership, monitored economic outcomes and signalled the Government to areas of potential shortcomings. Very importantly, too, it was a catalyst for building national consensus around a tough economic reform project.

STRONG OVERSIGHT

Last year, at his induction into the Private Sector Organisation of Jamaica Hall of Fame, Mr Byles suggested that the EPOC model was worth retaining over the long term to provide “continued strong oversight” on critical national policies, without usurping a government’s authority to lead.

In a subsequent address to the same organisation, Dr Phillips echoed Mr Byles’ suggestion, but went further. The body should be grounded in law and have independent reporting powers, including the right to forward reports to Parliament. Its members would be “independently” appointed.

Neither Prime Minister Andrew Holness nor Mr Dr Clarke, since he was made finance minister, has publicly responded to the idea. They should.

As we said at the time of Dr Phillips’ remarks, we believe that such a body, appropriately staffed, should have the job, rather than the auditor general, of providing robust analyses of the government’s quarterly fiscal policy papers and alerting the country to dangers and facilitating debate.

That matter should be among those on the agenda for the next round of Vale Royal Talks between the Government and the Opposition.