By Leonardo Blair, Staff ReporterARMED WITH a sobering cache of trade statistics in the House of Representatives on Tuesday, Opposition spokesman on Trade and Industry Karl Samuda called attention to the nation's monster trade deficit and urged government to deal with it now.
Without immediate action, the country is at risk of a never ending cycle of increased borrowings to pay for its appetite for foreign goods and services. Mr. Samuda fears that if foreign direct investment ever dries up, Jamaica will have nothing in its arsenal to fill the gap. "So we are talking here about balance of payments. I must focus on the balance of payments because that is the thermometer, that is the barometer, that is the judge. The measurement is showing us that we are going in the wrong direction," he said.
Armed with facts, Mr. Samuda argued that the Government is sugar coating the real picture and that Jamaica is steadily taking in more goods and services than it is sending out. "The trade balance reads like a how-to-win-how-to-lose market share. Export as a percentage of gross domestic product (GDP) has been falling steadily and we don't hear this. You must come and give us the facts and say 'look we trying hard but things are not getting better, they getting worse'," said Mr. Samuda. He then lashed out at announcements by Development Minister Paul Robertson that the nation's trade balances were improving. According to Mr. Samuda, the trade deficit increased in just one year by nearly 10 per cent.
IMPROVEMENTS
"Minister Robertson speaks about improvements in our trade balances since 1999. How can we have improvements in our trade balances since 1999 when the total external trade balance in 1999 was US$1.7 billion and the balance shot up to US$1.855 billion? That is an increase of US$144 million!" Scornfully he added, "And you say that's an improvement?"
The services sector, which includes a diverse range of industries such as manufacturing, has been devastated by the trade imbalance, Mr. Samuda said. "Do you know Mr. Speaker, when we have a trade deficit of the likes of what we have here what it has done? It wipes you out!" said Mr. Samuda. Jamaica's trade situation is thus: every dollar that Jamaica earns from exports is annihilated by our appetite for imports.
The Opposition spokesman explained to the House that the existing external trade deficit has simply wiped out the country's earnings from Services Income of US$339.8 million plus the entire Current Transfers of some US$815 million.
In his calculations Mr. Samuda ended up with a shortfall in the nation's current account of US$717 million.
"Now you might look at that and say no it is not sustainable. There is no economy in the world that can sustain that rate of current account deficit," said Mr. Samuda.
