New economic model
published: Wednesday | January 22, 2003
Delroy Chuck
NO ONE with a modicum of economic sense would support, and continue to support, an economic model that has failed so dismally and led the country into a vortex of economic decline. Inexplicably, after ten years of no economic growth, Jamaica is still saddled and burdened with a hopeless economic model that only increases economic hardship and deepens poverty. Without doubt, new economic policies that stress investment and production are urgently needed.
History and future generations will condemn the present regime for amassing a mountain of debt, strangling the productive sector and causing unnecessary misery and suffering in every corner of our beloved land, especially to the poor, sick and vulnerable. Happily, the Leader of the Opposition has presented a motion in Parliament to debate the present model and, hopefully, it can be debated soon so the model can be exposed and demonstrated to be devoid of merit.
Sadly, when our Minister of Finance goes abroad, the country is on edge, worried and concerned, wondering if he will get the needed loan(s) to pay salaries and balance the budget. Now, we know the loans are drying up, the minister's borrowing and begging bowls are empty, as the international money markets doubt our ability to manage the massive debt. In truth, the money-lenders mean Jamaica well and act prudently by refusing to lend us anymore. Our appetite for loans, new loans to pay old loans, and ever-increasing loans, is insatiable. That must stop. It is simply time to get our house in order.
It is grossly stupid to borrow from Peter to pay Paul, to borrow for housekeeping expenses and to consume - none of which make economic sense. It is total madness to pay out 50 billion dollars, or over 20 per cent of the budget, for interest payments and, worse, pay close to 70 cents in every dollar of the annual budget to deal with the debt burden. Our country is in crisis and still we continue with a failed economic model that got us into deep economic trouble and, ridiculously, expect it to get us out of the trouble. When will Minister Davies understand the country must earn its way out of trouble and his economic model does not have the prescription to do so?
When a country's productive engines are sputtering or shutting down, then that country is in trouble. When a country's economy is in trouble, every aspect of its social, spiritual and cultural life is affected, as it is the economy that is the driving force and saving grace of a country's well-being. Is it any wonder, as a Roman Catholic priest opined, that under this government life is so hard that more people pray or ostensibly attend church to pray? Well, for ten years and more, factories have closed, every agricultural crop is in trouble, tourism is a soiled product and barely survives, and in fact virtually every area of production has declined or disappeared under the burden of government's hostile economic policies. We desperately need a new economic model that emphasises investment, foreign and local, to drive the economy and increase production.
Jamaica needs a sound economic environment, through a better economic model, to inspire business confidence, stress investment and drive production instead of relying on monetary controls, loans and paper instruments. Such a model must be based on a low inflation and low interest rate policy, as any other model is counter-productive. Production and job creating investments must be priorities, and these are obviously inconsistent with the high interest rate policy. When businessmen have enough capital and feel philanthropic, they give to charity or set up charitable foundations. Businessmen engage in business to make money, to increase their capital and the greater the risk the more profit they expect in return. It is economic policies that must steer them towards productive activities.
Interestingly, the most profitable companies nowadays are not those producing but those investing in the non-productive activity of buying government paper. New economic prescriptions are therefore needed to make it more profitable, or even competitive, to invest in tilling the land, growing agricultural crops, housing development, producing consumer durables and goods here, instead of investing in government paper or engaged in the present paper chase. Jamaica's hope of economic development and a better life for its people depends on a complete change of economic model, a major shift in the mindset of our socialist leaders and an unwavering commitment to earn our way out of the crisis and to a better future.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by e-mail at delchuck@hotmail.com
