OPPOSITION SPOKESMAN on Finance,
Audley Shaw yesterday called on the Minister of Finance Dr. Omar Davies, to
clarify reported losses at the Bank of Jamaica (BoJ) which is said to be $70
billion, and which is not being reported as part of the national budget.
Mr. Shaw said that from as far back as the Budget debate in April, he had called on the Minister to state the full extent of losses at the Bank of Jamaica, as a result of the aggressive build up in the country's Net International Reserves (NIR).
In the Budget debate, Mr. Shaw said: "The Bank of Jamaica acknowledged in its recent release of the balance of payments data, because of the large inflows of loans, there was a build-up of US$555 million in the Net International Reserves of the Bank of Jamaica. Yet, the Minister of Finance has contradicted the Bank of Jamaica and dismissed the claim that the NIR is based upon borrowed funds - and very expensive money too. In addition to this, analyses have shown that there is a direct correlation between the build up in the NIR and funds borrowed by the BoJ. This year, some $4.4 Billion of the expenditure budget is allocated to the Bank of Jamaica to cover the cost of its operation and the losses that arise in the process, covering the fiscal year 1994-1995.
The question is, can the Minister now advise us to the full extent of the BoJ's losses between 1995 and fiscal year 2001 - 2002? We know that there is a differential between the cost of funds used to purchase the funds for the NIR and the actual income generated by the funds, so what portion of those losses were as a result of the use of borrowed money to build up the NIR? And when does the Minister expect losses at the BoJ to end?"
Mr. Shaw said that Minister Dr, Omar Davies chose to ignore his calls for clarification from April, and he should now without any further delay tell the country the truth about the mountain of losses being incurred by the Bank of Jamaica.
"On the face of it, it is certainly indicative of the reckless manner in which the country's affairs is being handled," Mrs. Shaw said.
