By Leonardo Blair, Staff ReporterAUDLEY SHAW, Opposition spokesman on finance, has warned the public not to get "too comfortable" with Finance Minister Dr. Omar Davies' explanation on how he intends to fund a significant portion of the Budget through external and local borrowings.
Dr. Davies, in his budget presentation yesterday for the 2004/05 fiscal year, at Gordon House, downtown Kingston, told the nation that while there will be no new taxes, the Government intends to borrow some 46 per cent or $153 billion of the $328 billion needed to finance the total expenditure budget.
While the announcement was easy enough to make, says Mr. Shaw, there are several factors which may upset Jamaica's borrowing predictions such as the uncertain relationship the country now has with the International Monetary Fund (IMF).
"He (Dr. Davies) has made no substantial comment on the discussions with the IMF and that is a major issue," says Mr. Shaw.
THE IMF
Announcements were made recently by the Finance Minister and Prime Minister P.J. Patterson, that the IMF was giving Jamaica 'favourable consideration' for an alternate monitoring arrangement to replace the discontinued Staff Monitored Programme, under which officials of the Fund had previously monitored the economic targets set by the Government.
If this consideration materialises, Jamaica will enjoy an improved credit rating which would be a positive signal to lenders on the foreign markets. It is this agreement says Mr. Shaw, which still remains uncertain.
"This kind of monitoring is a major signalling mechanism to external markets. He needs to speak to that issue."
According to the opposition spokesman, "It is an optimistic presentation that is bouyed by the fact that he was able to raise funding on the international capital market and the announcement of major investments in tourism and bauxite but he needs to speak to these issues."
"He doesn't present a clear strategy to reduce interest rates. There are other issues such as the persistent and chronic arrears for the purchase of goods and services. We are violating central government regulations about how bills are to be paid," says Mr. Shaw, who has vowed to give a comprehensive review of the presentation when he makes his contribution to the debate next Tuesday.
