The Editor, Sir:

In a recent speech, Dr. Omar Davies, Minister of Finance, expressed disappointment that Jamaican capitalists fail to make a bid for the Jamaica Public Service Co.which Mirant Corp., the United States-based multinational, has put up for sale.

But Dr. Davies must be talking straight out of his old-time felt hat again! How can Jamaican enter-prises, faced with near 20 per cent interest rates, compete with those of our trading partners who have cost of funds one-third that of Jamaica.

In addition, the onerous tax regime, bureaucratic inefficiencies, and the comparative high cost of security etc., put Jamaican businesses at further disadvantages.

Think logically

Governments and businesses have to think locally but behave internationally and regionally. A country's interests rates cannot be higher or much higher than that of its trading partners for any considerable time or else globalisation will exact a heavy penalty.

This not only creates the above problems and inflation, but it also exports our productivity and employment potentials to our trading partners, since in an effort to maintain some parity of interest rates and market competitiveness manufacturers and producers will be forced to become importers.

Whereas, the local manufacturer or producer will do, say two stock turns per year, the importer will do five (in some cases, up to 10) to make his real interest rate per stock turn five per cent, compared to the local interest rate of 20 per cent.

Our high interest rate regime, spurred mainly by government's disproportionate reliance on borrowing, has continued for far too long and has done comprehensive damage to our economy, employ-ment creation and robbed us of self-sustainable economic growth.

One dare not assume that the above real world business insights are alien to our Finance Minister and his advisors, or is it failure to make fundamental changes in our economic construct to achieve desired objectives?

I am, etc.,

L. A. BERT RAMSAY

bert@cwjamaica.com