The Bank of Jamaica (BOJ) is facing more fire over its decision to drastically hike interest rates. This time it is the Small Business Association of Jamaica (SBAJ) that has launched a broadside on the central bank and demanded the immediate rollback of the interest rates.

According to the SBAJ, the sharp increase in interest rates announced on Monday was "scandalous, retrograde and consistent with poor fiscal leadership".

SBAJ President Edward Chin-Mook said the interest-rate hike was part of a continuing attack on the entrepreneurial spirit of Jamaicans.

"The SBAJ must question the motives of the nation's leaders when a decision by the BOJ to restore predictability and order to local financial markets threatens the core business fundamentals and further destabilises the already fragile economic and social stability," Chin-Mook said in a release yesterday.

Sector held ransom

According to Chin-Mook, since 1991, efforts to protect the value of the Jamaican dollar have resulted in the productive sector being held to ransom.

He said the SBAJ was proposing several measures that could help solve the problems facing the country without increasing interest rates.

These include creating "business-in-box" bundles targeting Jamaican entities.

The SBAJ joins the Private Sector Organisation of Jamaica and the Jamaica Manufacturers' Association as private sector bodies which have expressed concern at the interest-rate hike.

However, the BOJ has defended its move, which it says was implemented to mop up excess liquidity and protect the value of the dollar.

Some of SBAJ's recommendations

✓ Immediate rollback of the interest rates outlined on December 1.

✓ Convene an action team to study the platform of the central monetary system, with the focus on employment, production and development.

✓ Replace the senior officers at the Planning Institute of Jamaica, whose performances have not indicated any innovation over the last 14 months.

✓ Review the mandate of the Development Bank of Jamaica, which has failed to spark the productive sector of Jamaica.

✓ Create 'business-in-box' bundles targeting Jamaican individuals and groups):

Leased land (agriculture, factory, office space).

Finance package - ($1-$10) million sizes.

(Low interest rate loans 5 per cent, 24-month principal moratorium).

Incentives (start-up statutory tax concessions, waive customs duty on equipment, motor vehicle, raw material and back-office assistance).

Marketing machinery - (local/regional/ international).