Morris Cargill

EVERY TIME I open the newspaper I find that a lot of people including the politicians, and of course the Prime Minister, and the Minister of Finance, are talking about the need for reducing interest rates. Naturally a reduction in interest rates can be generally accepted as a good thing. But how will these well intentioned people reduce interest rates? Do they do it by an act of political will? Do they stand in public places commanding interest rates to recede, or do they do it by magic incantations?

I ask these questions because if interest rates do not automatically reduce themselves through the normal functioning of an economy, it is obvious that you are not going to be able to do it by decree, or by simply asking people nicely to do so.

Linked with the matter of interest rates is also the matter of the exchange rate. The great virtue of a rate of exchange is that like interest rates it really can't be arranged by decree. When a nation buys or spends more from another nation, the rate of exchange adjusts itself quite automatically. I mention all this because in Jamaica if we spend more than we earn the rate of exchange will quite automatically go against us.

However, people like our Minister of Finance, or our Governor of the Bank of Jamaica don't like this process. They tinker with it. When the rate of exchange starts going against us they immediately 'make the adjustment' by using a lot of our money to buy US dollars more cheaply than they ought to be, which costs our taxpayers a lot of money. In the process of costing taxpayers a lot of money, we are forced into large-scale borrowing. Naturally the more we borrow the more interest we have to pay on the borrowed money if we hope to get enough of it.

So you will see that there is a beautiful and quite automatic relationship between the interest at which we borrow money and our rate of exchange. The more our rate of exchange goes against us the more we rely on borrowed money, and the more we do this the higher our interest rates become.

Pie in the sky

You will therefore see that the interaction between exchange rates and the rate of interest becomes an automatic process which can only be exacerbated by tinkering. It is no good our worthy politicians commanding the lowering of interest rates without at the same time making sure that we do not live beyond our means. If we do in fact live beyond our means, the dragon of an unfavourable rate of exchange will bite us, and if we try to slay that dragon its mate in the form of high interest rates will come along and bite us too.

What it really comes to is that our good Prime Minister, and the rest of them are simply talking nonsense when they talk about reducing interest rates without simultaneously making quite certain that we are able to live within our means. As we are apparently quite unable to do this, our worthy politicians are simply on a permanent diet of pie in the sky.

A droll idea has just occurred to me. If our pundits really hope to keep our interest rates at a nice comfortable 14 or 15 per cent, they had better get used to the idea that our rate of exchange will be hovering at about $50 to US$1. The only way that you can have it both ways is to rub the magic lamp until some obliging genie pops out.

While on this subject, I see that the North Coast Highway 'flounders'. Naturally, how could anyone expect otherwise, unless here again we could rub a magic lamp and arrange for yet another genie to rain down showers of gold upon us. Anything short of that exists, I fear, in the fevered imaginations of our Prime Minister.

Colour change

I have noticed recently that the colour printing of The Gleaner has been playing a few tricks. On Monday January 31 all the members of the Combined Methodist Choirs turned out to be white (or maybe rather pink). Of course that may be how they are, but somehow I think the odds are against it. Actually this bleaching process in the good old Gleaner is a quite common occurrence. On one occasion the Governor-General came out as white as snow.

Some of my journalist colleagues are sometimes prone to conspiracy theories, but I don't believe that there is any sinister bleaching conspiracy within the columns of this veritable newspaper. On the sport pages of the same issue, I could detect only one black person, I think someone must be picking on him.

Pounds vs kilos

To my horror I see that the authorities are threatening to fine people who weigh their produce in pounds rather then kilos. But I can't help feeling that this metrication business is going too far. There is much to be said for cultural diversity. One of these days a large group of market women are going to be fined for refusing to sell their yams in kilos, and this could well touch off a riot.

Even the metrication of money can give us a problem. It is all very well to divide a dollar into a hundred cents, but what happens when it takes $40 to make US$1? I suppose the answer is that our cents will in fact be abolished, but something seems terribly wrong somewhere. Gimme back me shilling with "de lion pon it".

Ian Ball

I never met Ian Ball personally, but I read with great pleasure many of his pieces in The Observer. Not only was he a most amusing writer, but a man of quite extraordinary erudition. He died, alas, at the comparatively young age of 57. We are fairly short of really good writers in Jamaica, and we can't afford to lose the good ones.