THE HIGHLY-RESPECTED Business Confidence Index, conducted in Jamaica by Professor Richard Curtin of the University of Michigan, has plunged by over 20 per cent for the quarter ending September 30. This is the lowest level in four years and is in stark contrast to recent official optimism about the state of the economy.
The reasons for the drop in confidence are a social and economic commentary on the state of the nation as seen by a wide cross
section of leading business executives. Predictably, the crime rate is of paramount concern, a reaction reinforced by the just-published ranking in The Economist magazine of countries with the highest murder rate per 100,000 of population; Jamaica is number one, ahead of Brazil and South Africa, in that order.
Not that Jamaicans need any such statistics to grasp the crisis of crime into which we have descended, a metaphor for which is the terrible burning to death of a young girl whose home was fire-bombed by gunmen. This and the shooting death of a police sergeant in Spanish Town has racheted up the national reservoir of fear and trepidation.
Other reasons advanced by Professor Curtin for the current lack of confidence are increases in the cost of oil on the world market and the rate of inflation in Jamaica. The official inflation rate is about 16 per cent, but there is strong anecdotal evidence that inflation at supermarkets and retail stores is more like 30 per cent. Businesses have reported that profits were less than expected in the third quarter. But most disturbing of all is how pessimistic businessmen are about the prospects for the Jamaican economy in the year ahead, a justified fear according to Professor Curtin who points out that, given recent shocks to the American economy, tourist travel to Jamaica and remittances are likely to decrease. He is quoted as saying, "Firms are sending a clear signal: trouble is on the horizon."
The critical question remains: Is the Government burying its head in the political sand or is it reading the signals realistically and making policy changes to deal with them?
It is imperative that the Government move to tackle the growing social anarchy across the island, and have the security forces deal more effectively with the crime which is undermining everything else. The decline in confidence is not peculiar to the business sector, and increasingly, the society is moving towards paralysis. The Government still has it within its powers to take appropriate steps, while respecting the human rights of its citizens. It is time to act now.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
