Ramesh Sujanani, Contributor
Very recently, I heard a replayed quotation from one of our ex-prime ministers, which went something like this: "More man have cyaar, more man have cellphone; more man have gal dan evah before." It was one of the worst ever made in the history of leadership, anywhere in the world.
I was trying to understand why Jamaica had not progressed in gross domestic product (GDP) during the decades of '90s, and 2000-2010, and how as a country we became insolvent.
The People's National Party had command of the economy from 1989 to 2000, which I should call the FINSAC era. It was in the early 1990s that inflationary pressures, caused by a rapidly depreciating Jamaican dollar ($7.20 to 1997 = 35.1) hit the banks and insurance companies; interest rates on commercial paper rose to 34.0 per cent, GDP growth reduced to 0.7 per cent. Inflation rate in 1991 ran to 82.0 per cent annually, perhaps the highest it had ever been.
At present, we are trying to hold inflation at 6.5 per cent per annum. Though the BOJ governor at the time expected increased foreign exchange inflows after the Government of P.J. Patterson announced deregulation, it was never to happen; except short periods from 2000 onwards when cambios in Jamaica improved the market of foreign funds.
Capital takes flight
Increased money supply was also a sign of the times, but many bad loans dried up liquidity in the system. Banks tried alternative businesses, or oversecured loans for working capital. Insurance companies and the stock market were the recipients of much investment, yet the GDP only increased 0.9 per cent, indicating that there was massive capital flight at that time (my conclusion).
Stocks climbed high, then toppled in 1993, yet job growth was flat. Finally, the BOJ was beset by so many requests for overdrafts from the commercial banks and finance companies that it seemed that financial casualties in the banking and insurance sectors were imminent.
Where was the management action from Government at the time? The foreign exchange became 'short' once again. The central bank had to refer this emergency to the ministers of Government (especially Omar Davies), and Prime Minister Patterson.
Banking disasters occurred in the failures of Century National Bank, Eagle Commercial and Merchant banks, Crown Eagle Insurance, Island Life, NCB, and others too many to mention. Where these companies were able to find buyers, or amalgamate, it was encouraged, after which FINSAC was formed: In whose hands the insoluble were to be rescued.
The finsac pm, et al
That never happened. The companies were somehow relieved of their assets. Mr Patterson was the FINSAC PM.
I then listened to events surrounding: Rollins land deal, zinc scandal, Shell waiver disgrace, Trafigura shame, Cuban light bulb outrage, and, of course, the mysterious references to Iran sugar deal. It began to dawn on me where two decades of production had gone: in corruption and incompetence; and further the appointment of a barely qualified, incapable prime minister.
You can tell when a government is overcome by incompetence, and that is when it feels it is important to give awards to all and sundry as if the country has achieved First World status. The country is bankrupt, has one of the highest crime rates in the world, is going after its 15th IMF agreement, morally bankrupt and still vastly undereducated. Yet we are giving out awards! Who ever heard of giving awards for failure!
The query becomes not only "Where is the Government?" but what did it do or not do to create the mess we are in, and can we trust it hereafter?
Ramesh Sujanani is a businessman. Email feedback to email@example.com and firstname.lastname@example.org.