Sluggish technological advancements hindrances to economic growth, says Shaw
Finance and Planning Minister Audley Shaw says that sluggish technological advancements are hindrances to aggressive economic growth in Jamaica and the Caribbean.
He was making a presentation at the 7th International Development Bank (IDB) Annual Caribbean Governors Meeting at the Pegasus hotel in New Kingston yesterday.
Shaw said that various international shocks, coupled with extreme weather, have led Caribbean nations into a trap of low growth and high debt.
“It is the sluggishness in technological advances that has become another force that mitigates our capacity to grow aggressively. So we have to invest to keep up and move back into a higher growth trajectory,” stated Shaw.
Jamaica grew at high rates in the past, Shaw said, pointing to periods of strong economic growth in the 1960s and 1980s periods he was not shy to associate with his party holding the reins of Government. He also pointed out that despite the devastation of Hurricane Gilbert in 1988, Jamaica still recorded growth in that year of three per cent.
He continued: “So we have known growth periods before, then we had our setbacks but the fact is that we have gone into a one per cent growth, or less, spiral for far too long.”
In addition, Shaw said that the importance of foreign direct investment must not be understated, and he also praised bilateral partners such as China for its immense investment in Jamaica.
“We have benefited tremendously from the Government of China, who has spent billions of dollars of investment in Jamaica at this time, with further multibillion dollars in public investments on the drawing board as we speak,” said Shaw.
“Our policy options, therefore, as a region, are that we can either default, have fiscal deficit to boost growth or have fiscal compression to ensure sustainability over time,” added Shaw.
He reasoned that Jamaica’s choice was to have fiscal compression, noting this to be the case at least since 2010, the result of which is the return of strong fiscal and monetary buffers and low interest rates, which give Jamaica more budgetary space for growth moving forward.