Current Affairs

Current Affairs




Teachers to sign MOU

Monday, March 29, 2004 The Jamaica Observer

THE Jamaica Teachers' Association, which represents about 20,000 teachers, says it will formally join a pact in which public sector unions have agreed to a three per cent cap on wage hikes over the next two years - a decision that was warmly welcomed by the National Executive Council of the ruling People's National Party (PNP).

"The NEC noted the teachers' decision yesterday and paid tribute to them for their timely stance," said the PNP's deputy general secretary, Colin Campbell, after the council's quarterly meeting in Montego Bay.

According to Campbell, PNP president, Prime Minister P J Patterson, also told delegates that the concession on wages by government workers "represented an opportunity, not in a tribal or partisan sense, for the government to reconnect with worker issues.".

The Jamaica Confederation of Trade Union (JCTU) last month signed the Memorandum of Understanding (MOU) on the pay cap, in exchange for the government's undertaking to stay its hand on slashing up to 15,000 government jobs as part of an effort to rein in a public sector deficit that will close this fiscal year at about seven per cent of gross domestic product (GDP).

Although the teachers' union is an influential member of the JCTU, its officials had declined to sign the MOU, saying that they first had to get the greenlight from their broader membership.

But on Saturday the JTA indicated that it would now go fully on board with the agreement, under which the government promised policies to bring inflation back to single digit. Inflation this year is expected to reach 15 per cent.

"We recognise, in the interest of rebuilding the economy, that there is a sacrifice to be made," JTA president, Wentworth Gabbidon, told the Observer yesterday. "We have taken the decision to do so."

However, even as the JTA prepares to sign, Gabbidon said his executive would seek reassurance today from Finance Minister Omar Davies that the administration will keep its promise to hold prices and generally ensure macroeconomic stability.

"We have major concerns, like many of the other unions, about the continued increase in prices and utilities rates and if the government is able to hold to its inflation, debt targets, and if it can close the gap in the budget," Gabbidon said. "We are also concerned with the position of the private sector - what they are doing to make the MOU work (and whether they) are committed to holding prices at a certain level."

The government has said that it will slash its deficit for the new fiscal year, starting April 1, to between three per cent and four per cent of GDP and also begin to bring down its debt to GDP ratio. The national debt, at nearly $700 billion, is just under 150 per cent of GDP.

A substantial element of Davies' strategy is to put the brake on the rise in the public sector wage bill, which has risen by over 60 per cent over the past five years and accounts for about two-thirds of non-debt expenditure. Debt-servicing takes up 60 per cent of the overall budget.

Davies hopes that a combination of the slow down in the wage bill, a downward trend in interest rates and economic growth - forecast at two per cent - will help to reduce the public sector deficit, rebuild confidence in Jamaica and lower the cost of borrowing.

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