EDITORIAL - Mr Golding's failure to discuss energy

Prime Minister Bruce Golding's announcement that the economy grew during this year's first quarter, after three years of decline, can only be welcomed by all Jamaicans, not least this newspaper.

Indeed, we hope this is, as Mr Golding claimed it to be, a signal that "Jamaica is officially out of the recession".

But even if the recovery is sustained, it will, over the medium term, as the prime minister conceded, be weak and projected growth far from robust. Indeed, it will be 2013 before real gross domestic product returns to the level of 2007.

But as Mr Golding and his finance minister, Mr Audley Shaw, will remind us, the anaemia of the Jamaican economy is not new. It has grown at an annual average of less than two per cent over the past two decades.

In that context, we appreciate the prime minister's emphasis on what he declared to be his administration's game-changing strategy, aimed at accelerating growth and creating jobs. There is nothing in his list of priorities with which we would disagree.

lack of specificity

Where this newspaper has a concern, however, is with Mr Golding's lack of specificity, and only cursory mention of specific initiatives - over whose rapid implementation his administration can direct influence - that are critical to the creation of a competitive economy. We refer particularly to energy.

As this newspaper has argued in the past, even if all the macroeconomic variables were to fall into alignment, leading to the quick elimination of the fiscal deficit and a further drop in interest rates, high energy costs would still be a hindrance to the competitiveness of Jamaican industry relative to its regional partners.

Imported oil accounts for over 90 per cent of Jamaica's energy and electricity reaches consumers at around US$0.30 a kilowatt hour. Most informed analysts, including corporate leaders, say that this price needs to drop by two-thirds or more.

For this to happen, at least two things have to take place: Jamaica has to find a cheaper fuel than oil and has to install more efficient power-generating and distribution systems which, ostensibly, the Government has instigated.

liquefied natural gas

The administration's declared policy is to convert to liquefied natural gas (LNG) as the fuel of choice for power generation, and it has named a preferred bidder for the LNG storage and distribution facilities. It has also invited bidders for 480 megawatts of electricity-generating capacity, based on LNG.

The Government, however, has been secretive about the process which, in any event, seems to have stalled. Moreover, energy was apparently not to be at the forefront of Mr Golding's strategic thinking during his Budget presentation.

His casual reference to the matter was to mention a friend's suggestion that electricity costs could be brought down if Government owned the light and power facility, which the administration couldn't afford.

We had hoped that, by now, the Government would not only have set firm timetables for energy conversion and prices at which power must be delivered to consumers, but would have also aggressively mobilised the public around the issue. It has not.

And it steadfastly refuses to share with the public an independent technical review of the LNG project.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.