THE EDITOR, Sir:
PERMIT ME space to request some enlightenment on the need to devalue the Jamaican dollar. First of all, I must confess to being totally ignorant on matters of economics. It is, therefore, in that light that I seek some clarification on the matter. According to my simple reasoning, I can see no justification for the continued call to devalue the dollar and to allow it to find its true market value. We have gone that route over and over again to our cost. We have passed the significant barrier of $50 to the US dollar. When will it reach that bottom point that the gurus tell us about, and who will determine that?
It seems absurd, but the lower it gets, the more statements are made that the currency is overvalued! In truth and in fact, it has no value, being less than US$0.02! We might as well rename it 'cent' instead of 'dollar'.
When so much of the goods we use are imported, how can we benefit from devaluation when we have to pay for them in foreign currency? The little we export costs so much to produce, that we are not competitive in the market because materials, labour and other inputs increase with each slide of the currency. Every devaluation is met with a round of increases in wages, price of goods and services, as well as the taxation demands from Government to meet budget deficits.
Who then is benefiting from this continued run on the dollar? The only beneficiaries seem to be the few people with enough money to speculate on the dollar. And if we had a stable currency that could create confidence, these speculators would not need to hedge their bets against an uncertain and unsteady future, but would instead invest their capital in income-generating projects for the general well-being of the country.
How can the ordinary citizen survive on a currency that has no value? Before you can adjust to one round of price increases, you are hit with another, and yet another. Earnings can never catch up with the inflation spirals, so where are we headed? This is like the dog trying to catch his tail. Can any of our learned economists please explain in simple layman's language the need to devalue our currency and how this will help?
I see no reason why economies in our sister Caribbean countries can be so buoyant when ours is ailing so badly. Apart from the natural resource of oil in Trinidad, we basically have the same conditions - the only difference is that their currency is stable. I, therefore, fail to understand the policy in Jamaica where, from the IMF to local pundits, see devaluation as our only solution.
I am, etc.,
EFFIE STEWART
Beecher Town P.A.
St. Ann
