R. Anne Shirley, Business Writer

EACH DAY the calls are getting stronger for the Government to take more decisive action in anticipation of the impact of the global meltdown on the Jamaican economy.

Already, the manufacturing sector has indicated that they are beginning to experience a credit squeeze from their suppliers.

Many suppliers are requesting cash payments whereas others are reducing credit terms from 90 days to 60 or 30 days.

Last month, the Bank of Jamaica revised inflation targets downwards from 9-11 per cent to 14.5 per cent to 17 per cent.

The Ministry of Tourism has also revised the tourism growth targets downwards from 13.5 per cent growth for the current fiscal year to around 4-6 per cent.

Anaemic growth

And most analysts predict that even if remittances remain relatively flat for the rest of this year, growth should be anaemic or negative for the next year or two, depending on the severity of the recession in the United States, United Kingdom and to a lesser extent the Canadian economy.

The following are measures that the Government can undertake in the short run as part of its efforts to deal with the possible negative impact of the global crisis.

1. Undertake a Cabinet reshuffle and reduce the number of ministries:

Prime Minister Bruce Golding has a golden opportunity to make changes to the composition of his Cabinet and to realign portfolio responsibilities.

This would also provide him with a good reason to get the Ministry of Finance to recast the budget for the rest of the current financial year.

Golding should not be afraid to drop those ministers who have been ineffectual and promote those junior ministers who have been performing.

2. Review the programme of downsizing the number of public bodies:

This was started by the previous administration, but needs to be fast-tracked. Particular attention should be paid to the overlapping/duplication of areas of responsibility and an effort should be made to merge and/or eliminate some of the small, stand-alone public sector bodies/agencies.

Handling cash commitments

3. All ministries and public sector bodies to provide the finance ministry with: (a) an aged list of its outstanding payables, and (b) a list of all contracts awarded on which preliminary work and/or actual work has already started, but not yet been billed.

One of the glaring weaknesses of the cash accounting system currently utilised in the government system is that it is difficult to get a handle on outstanding commitments.

This has been somewhat ameliorated by the quarterly review process that the contractor general is undertaking for contract awards under the limits that have to be reviewed by the National Contracts Commission, as well as the reporting of all letters of undertaking, and promissory notes by the Ministry of Finance to the Parliament.

It is important to ensure that nothing has slipped through the cracks.

4. Implement a cost-efficiency programme throughout the public sector.

Permanent secretaries should be mandated by Cabinet to undertake energy audits of all public buildings, and establish measures to turn off lights and air-conditioning in vacant rooms; freeze all vacant positions, variations to be signed off by the Finance Ministry; cut back on non-essential travel, etc.

There are other simple, cost-effective measures that could be undertaken, for example, the Contractor General has once again highlighted in his 2007 report that ministries/agencies could save in the region of $80 million to $100 million in the placement of large advertisements in major newspapers for tenders for the provision of services.

Request for proposals

He suggested that this should be coordinated with one large weekly ad covering the entire public sector - with each 'request for proposals' stated in three or four lines with a reference to a central website like the JIS's were the details of each request would be listed.

5. Conduct an immediate review of the Jamaica Deposit Insurance Corporation's deposit insurance limits on individual accounts:

Currently, the limit stands at $600,000 per account. Consideration should be given to assessing the cost of increasing the insurance coverage.

Regional coordination

However, as pointed out by the International Monetary Fund in its Global Financial Stability Report of October 2008, "expansion of deposit insurance limits or, if conditions deteriorate further, use of a blanket guarantee should only be undertaken as a temporary emergency measure and is best undertaken in a coordinated fashion across countries."

6. Initiate immediate discussions among CARICOM ministers and with regional institutions, such as the Caribbean Development Bank, on a range of regional responses to the impact of the global financial crisis on trade, tourism, food and oil prices, other imports and prospects for regional exports.

Here again, the goal would be to develop common positions, and to coordinate actions throughout the region.

Implementation of these types of measures would instil confidence in the public that the Government has its hands around the problem, and is preparing to face it frontally .