Jamaica must act now! Economic crisis looms

Richard Crawford, Contributor

Jamaicans United for Sustainable Development takes note of the most recent statements on the economy made by Minister Christopher Tufton and Dr Gladstone Hutchinson of the Planning Institute of Jamaica (PIOJ) who have at long last shown a facing up to reality and a recognition of the crisis which has confronted us since 2007.

The Government has pursued an overambitious, ill-timed, and unattainable set of economic targets formulated from traditional, failed economic policies which have made matters worse than in 2007 and resulted in continued economic decline.

The result of all this, according to Dr Hutchinson, is that any projected growth in Jamaica will have to be reassessed. The reopening of The Kirkvine Alumina plant will be unlikely, there will be a decline in tourism income, investment will be curtailed, unemployment is likely to increase, and there will be a shortfall in projected tax revenues.

The proposed budget cuts in education and other important programmes, and the massive laying off of workers coupled with further austerity policies to try to attain certain mythical IMF targets can only lead to further economic, social, and political crisis. There can be no more sacrifices demanded from the majority of the population in Jamaica who had no part in the creation and maintenance of this 21st-century economic disaster brought about by misconceived and corrupt policies and get-rich-quick schemes.

Ironically, Dr Tufton is blaming this sad state of affairs in Jamaica on the IMF proposals for stagnation and limitation of the role of government in the economy, and argues that in successful economies, the government had to redefine itself and its role in the economy.

Well, the moment of truth is here for Jamaica. The Government will have to redefine itself. The IMF shares the blame, as well as every government that has presided over 49 years of 'Independence' and 34 years of continuous sacrifice and belt-tightening.

The Solutions

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  The first thing that must be done is to reroute the US$750 million (approximately J$60.4 billion) set aside as a safety net for the financial institutions from the JDX programme. This J$60+ billion needs to be used for budgetary support to cover the J$10 billion owed to public sector workers, and to maintain critical services and employment. The proposed rationalistion of the public sector must be done with the objective of improving efficiency, and this must not be delayed.
  
  
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  This should be coupled with maintaining duty waivers for manufacturing, small-business development, and alternative energy schemes only, and increasing incentives for the agro-industry and foreign exchange-earning sectors.
  
  
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  Increase taxes on luxury goods and reducing them on basic foods and goods.
  
  
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  Encourage the banking sector to increase credit directed to small-business development and non-traditional areas of economic activity.
  
  
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  Renegotiate the Glencore/ Jamalco agreement for the forward purchase of bauxite.
  
  
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  Renegotiate the JPSCO agreement to allow net metering and other changes. Make loan funds available to small businesses and export manufacturers to install alternative energy systems. At the same time, put in special rates for the lowest-income families.
  
  
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  Immediate realignment and development of a new international economic policy with Africa, the Middle and Far East, Brazil, India, China, Russia, Malaysia, Singapore, Canada and the Scandinavian countries.
  
  
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  This would also mean completing the renegotiation of the IMF agreement on terms more favourable to Jamaica. This was the original objective of the programme that was not adhered to.
  
  
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  There also needs to be a focus on attracting investment by Jamaicans locally and in the diaspora in projects which will generate significant employment and foreign exchange earnings - in the ICT Centre in Portmore; development of the historic triangle of Port Royal, downtown Kingston and Spanish Town; the expansion of the logistics capabilities linked to the Port of Kingston to establish Jamaica as a major distribution hub for the Americas; in carbon trading and other new, green industries.

Once more, Jamaicans United For Sustainable Development extends its willingness to meet with the minister of finance and any other ministers to elaborate on these proposals and to help develop a formula for incorporating the society in the rebuilding of the economy and to create job opportunities for ourselves.

There is no greater priority at this time.

Richard Crawford is convenor for Jamaicans United for Sustainable Development.