THE EDITOR, Sir:
THE GOVERNMENT'S recent implementation of new taxes to fund its $262 billion budget has left many citizens angry and bitter towards the Minister of Finance, Dr. Omar Davies. With many crying for his resignation, what is he doing to rectify his image? Nothing.
I think his new tax plan was creative, but was it necessary? Instead of increasing taxes to meet increasing expenses, why not cut Government expenditure for this fiscal year?
Putting that aside, the thing that has most, if not every Jamaican "up in arms" is the sudden and rapid devaluation of the dollar. In the space of a week, the dollar devalued by approximately $11. What has led to this sudden devaluation? I'll tell you: As a result of Omar Davies' inability to clearly illustrate that debt among other things were under control, there has been a loss of confidence in our international investors.
INCREASING PROBLEM
As the situation currently stands, we have an increasing problem with our balance of payment position. The need for the U.S. dollar and other foreign currencies are far greater than what is available. We have far too many imports with too few exports (unfavourable trading conditions). We are spending our foreign currencies on goods and services from overseas, which are readily available here.
I believe there are two ways of dealing with the devaluing dollar: (1) Increasing the supply; (2) Decreasing the demand.
Increasing the supply has proven useless as we have seen in March April if this year. I suggest, by decreasing the demand for foreign currency, the dollar should appreciate.
The Government needs to clearly examine our foreign expenditure and implement new policies to correct it. If our aim is to increase economic growth, we must: develop our own industries, increase exports in the Caribbean and the rest of the world and cut expenditure. Our economy is doomed by high interest rates, paired up with high rates of inflation.
If things continue on this route, I believe that certain services of the economy will under-achieve and fall out by 2006, when the WTO removes all tariffs and quotas on imports in an effort to have a free trade area. We are heading fast down a dead-end road, with no way of stopping.
I am, etc.,
JASON CLARKE,
pteclarke@hotmail.com
6th Form Student,
Ardenne High School.
