PERHAPS THE most important signal to come out of the joint Government/Private Sector meeting at Jamaica House last Friday is that there are no plans to reintroduce exchange controls as a means of stopping the slide of the Jamaican dollar.
This commitment is timely and reassuring since there are those who do not believe, on strictly legal grounds, that the original legislation setting up exchange controls was ever formally repealed and remains on the statute books, available for quick resurrection.
Legalities apart, we unreservedly accept the Government's new undertaking not to use an instrument of policy which both in principle and practice cannot work. There is clear evidence that exchange controls did not work in the 70s and only helped to disrupt the economy more drastically. Trying to use coercion to gain confidence and co-operation in a modern economy is theoretically absurd, like making a fist to grasp sand the tighter the fist is closed, the more the sand trickles out between the fingers.
The other important statement coming out of the high level meeting is the consensus which emerged that the level of deterioration in the value of the Jamaican dollar is not supported by fundamental economic indicators and is therefore irrational. Other aspects of the statement seem somewhat blurred and lacking in specificity which, hopefully, will soon be forthcoming. We remind the powers that be that there is little point in preaching rationality to the irrational whose reaction to the slide of the dollar is focused on the results of panic rather than its causes.
Confidence is the intangible but indispensable moral force which underpins the dynamics of any economy. Once lost, it is difficult to regain and the least suspicion of manipulation, prevarication or mendacity will cause it, like quick silver, to slide away even faster than the value of the dollar.
The Government must stop blaming others for its failed policies, come clean with the people, admit the dimensions of the crisis and earnestly seek to put things right.
We believe that in addition to Government acting to stem the slide of the dollar, it will restore confidence by also cutting back on public expenditure.
The very measures we have advocated to reduce the number of ministries by mergers or otherwise are also now being elaborated by the JLP Opposition. The Government should not on this account reject this ploy as a political manoeuvre. Restoring public confidence will go a far way to maintaining social stability that may be strained by rising prices and the consequent public disaffection.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
