By McPherse Thompson, Assistant News EditorPRIME MINISTER P.J. Patterson's comments on the state of the economy will be far-reaching in reducing speculation about the island's current fiscal position and restore investor confidence in the market, private sector leaders said yesterday.
At the same time, they contend that the administration's deafening silence during the past weeks had played a significant role in increasing speculation that resulted in the free-fall of the Jamaican dollar, largely fuelled by lack of confidence in the economy.
"Confidence level is of primary importance and information was not flowing as freely and as accurately as it should and this lends itself to speculation and panic," said Clarence Clarke, president of the Jamaica Manufacturers' Association (JMA), whose concern was shared by both the Jamaica Chamber of Commerce (JCC) and the Private Sector Organisation of Jamaica (PSOJ).
Evidence of the restoration of some level of confidence began taking shape yesterday with a $1.75 appreciation in the weighted average selling rate of the US dollar, and followed Sunday night's address to the nation in which Mr. Patterson announced measures to halt the weakening currency.
Mr. Clarke said the Government, at a meeting with private sector leaders last Friday, agreed to increase information flow in a more timely and accurate manner to defuse speculation, especially in view of rumours about a renewed borrowing relationship with the International Monetary Fund (IMF), as well as the re-introduction of foreign exchange controls.
Describing the impact of the depreciation of the local currency during the past weeks as "grief", Mr. Clarke said a number of manufacturers were operating on overseas credit and had ceased trading because they were unsure at which prices they should trade their goods.
JCC president, Michael Ammar Jnr., said the Prime Minister's statement was "very strong" and although he had not outlined all the measures to be taken to reverse the slide of the dollar, it was a positive move towards restoring confidence in the economy.
Saying that the depreciation so far "has been very, very painful" for merchants, Mr. Ammar said it "is going to cost businesses dearly this year. Depending on their bottom line and their payables, it may wipe out a huge chunk of their profits."
The JCC president also noted that "information flow" from the Government "is a big concern," and they have told the Prime Minister that the speculative activities over the past weeks could have been avoided had credible information been given to the market.
PSOJ president, Beverley Lopez, said last Friday's meeting, as well as the Prime Minister's address on Sunday was way overdue because the administration had been totally silent in the face of the economic uncertainties. "That does not fuel confidence," she said, adding that the address, hopefully, would be the first of a continuous process of sharing with the public what has been happening in the economy. "There is nothing that fuels fear more than not knowing what is happening," said Mrs. Lopez.
