By Garwin Davis, Assistant News Editor
Clarke (left) and Forstmayr (right)
THE SLIDING Jamaican dollar is taking a huge toll on business operations with many importers now saying they have been forced to cancel orders from overseas.
"I have had to cancel all my orders" explained Sanju Chatani, owner of the Krazy Nancy Department stores in both Ocho Rios and St. Ann's Bay. "It's a situation where we have to purchase goods using the American currency and sell back in Jamaican dollars. With the dollar sliding the way it is, I have been losing out big time. The best thing I can do right now is to hold off until normalcy returns."
The Jamaican dollar over the past several weeks has weakened significantly, trading on Friday at a record high of $72 to US$1.
Prime Minister P.J. Patterson and senior members of his economic team, including Finance & Planning Minister, Dr. Omar Davies, met on Friday with members of the private sector to discuss the situation.
NOT SURE ABOUT PRICING
"It's very bad for business right now," said Clarence Clarke, president of the Jamaica Manufac-turers Association (JMA), about the sliding dollar. "There are merchants right now who have their doors open but are not trading. They bought the goods at a certain price and are now not sure at what price to sell."
Mr. Clarke said merchants feel that they would be much better off holding on to inventory rather than run the risk of parting with goods "at a price smaller than what they would get if they wait until next week".
The JMA said the current situation is one that could put many merchants out of business, noting that "the four per cent cess charged on imports only serves to further compound matters."
"A lot of these guys get credit from overseas suppliers for goods when the dollar was trading at $50+ for US$1," he said. "Now they have to find the money to buy the U.S. currency at a much higher cost to pay their creditors. This is very disruptive for business."
David Phillips, owner of National Meats Distributors, agreed: "The rapid devaluation of the Jamaican dollar has hit importers really hard," he said. "My business has lost millions as a result. With the uncertainty surrounding the dollar, a lot of us are taking a wait-and-see approach right now. It's very difficult keeping up."
The Government, since May, has imposed a four per cent cess on all imports at the nation's ports. The business sector has been lobbying hard for the cess to be removed on the grounds that "it is bad for business".
TOURISM AFFECTED
"We in the tourism industry, for obvious reasons, will not be screaming the loudest," said Josef Forstmayr President of the Jamaica Hotel & Tourist Association (JHTA). "This, however, is not to say that we won't be affected by the unstable nature of the dollar. As a matter of fact, there are many restaurants and attraction owners who are now being affected by a number of price increases as a result. This clearly will also have an effect on wages in the workforce which in some cases could lead to disruption."
Michael Edwards, a St. Ann businessman, was equally miffed. "I simply can't pay my overseas creditors," he said. "I have had several orders cancelled on me because of my inability to pay. Nobody knows when this will all bottom out and I'm afraid things could get worse. The climate right now is very unfriendly to business people."
