Keith Collister, Contributor
BAD GOVERNMENT policies since 1997 have resulted in the stagnation of the Jamaican economy, says Opposition Spokesman on Finance, Audley Shaw.
The cumulative growth of the economy under the tenure of the Finance Minister was 8.6 per cent, or roughly the same amount the Jamaican economy grew in 1987 under the Jamaica Labour Party, he said.
Addressing Parliament in his contribution to the Budget Debate on Tuesday, he estimated that there are 450,000 jobless Jamaicans of working age, including those who have given up looking for work as well as the official unemployed.
INTEREST RATES
According to Mr. Shaw, per capita gross domestic product (total national output) had remained almost static since 1997, and compared poorly with our main regional competitors of Barbados and Trinidad (whose GDP had more than doubled in U.S. dollar terms since 1995).
One factor behind this was that Jamaica's average Treasury bill interest rates of 16.5 per cent over the past five years made it difficult for its manufacturers and producers to compete with those of Barbados and Trinidad, facing comparable rates of 2.2 per centand 4.9 per cent, respectively.
SUGGESTIONS
Mr. Shaw criticised Dr. Davies debt reduction strategy paper, pointing out that it did not contain a single idea on how to confront the debt problem.
To address this serious problem, he suggested that the $18 billion expected to be generated this year under the PetroCaribe Agreement be used to retire expensive debt and not as a social slush fund or another 'crash' (Government work) programme by another name.
Other suggestions for reducing the debt burden were the securitisation of other Government foreign exchange inflows. The proceeds of such bonds could be used to repay expensive debt and lower interest rates.
He also suggested borrowing perhaps US$1 billion from multilateral institutions, such as the World Bank, also for the purpose of replacing expensive commercial debt.
GROWTH GENERATION
To generate growth, Mr. Shaw identified a need for a new export-oriented business plan, aimed at diversifying the economy and developing service sectors in which Jamaica is globally competitive, such as agri-business, light manufacturing, health tourism, retirement villages, and business process outsourcing, a strategy that has been successful in countries such as Singapore, Ireland and, in our own region, Costa Rica.
To revive agriculture, he proposed the lowering of interest rates for small farmers and the subsidisation of inputs such as fertilisers and insecticides.
With respect to industry, he proposed the removal of GCT, customs duties and user fees on capital goods and raw materials; the establishment of 'enterprise development zones' in the inner cities with tax incentives on profit; and the establishment of a freeport on the Palisadoes Peninsula as suggested by Edward Seaga.
ENERGY
Mr. Shaw criticised the Government for its failure, after 17 years, to implement an energy efficiency and conservation policy.
He pointed out that, although Government were shareholders in JPS, they had failed to curb JPS's use of 'gas guzzling turbines'. At the same time, they had failed to promote the use of ethanol, biogas and solar energy. He was, therefore, particularly concerned at the Government's intention to divest itself of its remaining 20 per cent holding in JPS, leaving JPS 'to plunder the pockets of Jamaicans'.
