Delroy Chuck
WHILE the Government's public relations machinery cranks up and misleads the nation to believe we are on the right path, the trade figures and economic targets tell a completely different story. In Latin America and the Caribbean, virtually every country has shown significant economic growth and improvement during the past decade and more but, sadly and unnecessarily, Jamaica continues to stagnate and decline annually. Even now, with the present macroeconomic policies, which the evidence so amply demonstrates, we are likely to decline even further.
Perhaps, the best evidence to illustrate where the economy is going is the 6 per cent decline in exports and the 16 per cent increase in imports during the past year. When exports are declining instead of improving, we are on the wrong economic path. Without increasing exports, Jamaica will never achieve prosperity and a better quality of life. Yet, in spite of claim to the contrary, the management of the Jamaican economy has been disastrous and easily explains why virtually every crop, product and service to earn income for the nation is in reverse. Sugar, bauxite and banana have had their worst output for decades.
Without a reversal of the present imprudent economic policies to stimulate and drive exports, create a better economic environment for jobs and opportunities, and increase production, the economy cannot improve.
INFLATIONARY SPIRAL
At present, we are entangled in an inflationary spiral that is likely to make exports even more uncompetitive and further sink the Jamaican economy. In most decent countries, a Minister of Finance, who so regularly misses his economic targets and aptly demonstrates his economic incompetence, would have resigned in disgrace long ago.
But, in a nation where mediocrity is touted as world class, the nation's worst finance minister is mistakenly labelled the best. For the past three years, the Minister of Finance, Dr. Omar Davies, predicted an annual inflation of 9 per cent and consequently called on the unions for restraint, the inflation rate has been 16.8 per cent, 13.2 per cent and likely to reach as high as 18 per cent or more this year. If we dare blame the price of oil, natural disasters or world conditions over which we have no control, pray tell, how did other countries, notably Caribbean nations, cope with the same world conditions and natural disasters, and maintain single digit inflation?
When inflation is out of control, as it is, the poor and vulnerable suffer the most, and consumers' purchasing power declines. While people are struggling to survive, the Government unleashed a round of price increases, by raising the GCT level to 16.5 per cent allowing water, electricity and telephone rates to rise and, with the oil price increase, the cost of transportation will inevitably soar. Already, for the first four months of the fiscal year, inflation is 7.4 per cent and for the past twelve months it is 18 per cent. With the latest round of price increases, how can we even hope to keep inflation below 18 per cent for the fiscal year? This PNP Government, and Dr. Davies in particular, should be ashamed of the country's economic mess, from which, in the fifth, sixth or tenth term in office, it will never be able to extricate the nation.
Amazingly, four years ago, when inflation was in single digit, interest rates were unduly kept in excess of 20 per cent, which means there was a net gain on money saved in bank deposits. Sadly, many savers, especially pensioners, were lured into a false sense of security to put their financial resources into long-term deposits. Well, with inflation in excess of 15 per cent annualised, any long-term deposits under 15 per cent would amount to throwing money away, as over time the value of the deposits would depreciate. In the same manner, short-term deposits under 16 per cent per year is economically imprudent, as the net funds, after taxation, will purchase less goods and services. Investors and savers are, therefore, seriously challenged and must wonder what should they do with their hard earned cash and savings for a rainy day. Is it any wonder that people are now trying to secure the value of their holdings by converting to currencies that can hold their value?
Will Dr. Davies secure his balanced budget this year? I rather doubt it. With the hidden taxation of inflation, he will certainly collect more taxes but the cost of Government will also rise. With the likelihood of oil prices remaining high, the dollar under pressure and likely to devalue, inflation spiralling out of control, exports declining, and consumers bending under the price pressures, the Jamaican economy once again twirls in a vortex of decline.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by email at delchuck@hotmail.com
