Letter of the Day | The awakening of Dr Nigel Clarke
THE EDITOR, Sir:
According to the article in The Gleaner, the Jamaican Government is proposing to use the stock market to raise funds for infrastructure projects in a move to avoid increasing the national debt.
The article indicates that Dr Nigel Clarke, finance minister, has suggested that the Andrew Holness Government will finance new projects via equity.
“The idea is that as the Government becomes more fiscally responsible, a lot of these projects will be financed by the investing community. We are bringing forward these projects, and you would be left with long-term gain,” Clarke was quoted as saying.
Well, this is welcome news and seems to be an awakening for the minister of finance, which avoids the country having a rude awakening of its own.
A quick glance through The Gleaner over the past two years shows an almost unrelenting appetite for new loans. For example, loans from just one multilateral institution show close to US$500 million, or approximately J$60 billion, in new borrowings.
This is broken down as follows:
A National Identification System (NIDS) – US$68 million.
A US$285-million contingent loan to help Jamaica get disaster-ready.
A US$100 million in loans to Jamaica to help strength its national healthcare system.
A US$20-million loan to support the Government of Jamaica’s efforts to measurably increase the conviction rate for murders and other violent crimes.
A US$30-million loan for energy-management programme.
That final loan for US$30 million has an additional US$10 million in grants. The curious thing about this energy loan, however, is that the loan also provides funding for energy-efficiency projects in the public sector, which is identical to programmes already being successfully funded by the Government. So why is the Government borrowing US dollars to perform the same functions that they are already performing?
Indeed, the government-funded energy programmes have been reporting stellar successes over the past three years, based on media reports.
I applaud the finance minister for the pronouncements and encourage that at least with respect to the public energy sector, no new loans should be signed until an energy minister has been appointed.
Alternatively, Clarke’s suggestions that the Government look towards equity and private-sector partnerships to fund projects should become the order of the day.