THE EDITOR, Sir:
It is a known practice that when an individual and/or organisation seeks a loan from any financial institution, collateral must be provided.
I am not an economist by any stretch of the imagination, nor do I have any academic qualification in banking rules, laws, regulations, etc, but logic and mere common sense would tell me that if/when a government has the need to acquire loans from institutions, the prerequisites would be the same, or similar.
In the case of an individual or organisation, such asset might be property, equipment, bonds, or possibly a guarantor with such asset.
In the case of a government, common sense tells me that the best assets a government can offer are its people and their productive ability.
In the 1990s, the PNP administration orchestrated policies that resulted in the destruction of an alleged 40,000 businesses that had contributed substantially to the economic development of Jamaica.
Business persons who had been proficient in their chosen fields and had been successful for more than 50 years, some of whom had been borrowing from their financial institutions, repaying their debts, reborrowing and repaying as the growth of their businesses progressed.
Common sense tells me that what the administration did then was, in several fell swoops, destroy the collateral assets that would guarantee them obtaining loans from institutions like the International Monetary Fund, among other multilaterals.
Did anyone really consider the long-term implications for the people of Jamaica? Did they think that Jamaica would never again need the help of loans in administering governance? Was it that they thought that they could just sweep FINSAC under the rug? Did they think that like Vegas, what happens in Jamaica stays in Jamaica?
In seeking funding today, how does this Government plan to repay any loan acquired, and what assets are being offered as collateral? My suggestion: Why not offer the Jamaican Redevelopment Foundation as collateral? It holds all the unsold assets, as well as the millions of liquid assets, amassed from the Jamaican sell-out.
I only hope that the IMF, and all other such financial institutions whose remit it is to fund governments, and especially the Jamaican Government, will lay out mandates and put in place short-term policies that will ensure that every cent spent out of loans will be accounted for in quarterly reports to them.
President, Association of