DEMONSTRATING ONCE again his special ability at marshalling pertinent data without losing sight of the big picture, Mr. Seaga's presentation in Parliament raised the Budget Debate to a high scholarly level which we hope will elicit a matching response from Dr. Davies, Minister of Finance, when he closes the debate later this week. He needs to answer Mr. Seaga point for point so that the public can make a judgement on the real issues involved.
Mr. Seaga's presentation began with a historical review of Jamaica's membership in the regional groupings leading up to CARICOM and the Caribbean Single Market and Economy (CSME). In the process he took an Olympian stand in hurling criticisms at Government's economic policies during its time in office. Mr. Seaga used data to demonstrate how far behind its trading partners Jamaica has fallen in managing economic growth. Our 2002 per capita income of US$3,639 ranks nearly at the bottom in the comparison tables.
He also berated the shocking under-funding for education in Jamaica compared with most of our Caribbean neighbours; only 8.9 per cent in the current budget when, in keeping with an agreement between Government and the Opposition reached in Parliament last year, it should have been at least 10 per cent, increasing by one per cent annually until it reaches 15 per cent.
Even if one does not agree with Mr. Seaga's solutions, it is difficult to refute his diagnosis of the problems. One of the solutions he is advocating is a fixed rate of exchange or currency board model which he believes is the only way to curb political temptations to profligacy which the present system allows and encourages. He showed that in the Caribbean region 30 of 36 states have a fixed exchange rate pegged to the US dollar and that this has consistently resulted in low interest rates and low inflation. We think that this correlation warrants serious study.
The other main thrust of Mr. Seaga's speech may have given the wrong impression. Because of Jamaica's uncompetitiveness in what it produces for export, he warned of the consequences that could result from joining the CSME at this time. It could be that he is not against such membership in principle at some future date (like the Caribbean Court of Justice) but recommends that we "get our house in order before inviting others to come in."
The CSME warnings, though, seemed to echo the political strategies leading up to the 1961 referendum and the ultimate demise of West Indian Federation; but which, he conceded, did not destroy the concept of regional co-operation.
Ultimately, some of Mr. Seaga's logic may be driven by philosophic concepts with which others may disagree. But he has succeeded in narrowing the issues and setting the tone for a continuing debate on his ideas. The work and research that he must have put into the presentation deserve respect and response.
