Sun | Jun 26, 2016

Western Jamaica jittery - Business operators want speedy closure to IMF talks

Published:Sunday | January 13, 2013 | 12:00 AM
Davon Crump,
Gassan Azan,

Mark Titus, Sunday Gleaner Writer

Western Bureau:

Several stakeholders in western Jamaica have entered 2013 with a gloomy outlook because of the protracted delay in the Government's bid to secure a new deal with the International Monetary Fund (IMF) and the continuing decline in the value of the Jamaican dollar.

Noted businessman Gassan Azan, owner of the MegaMart Wholesale Club and Bashco retail stores, says the drawn-out IMF discussions is causing jitters in the local business community and breathing new life into a foreign-exchange black market.

"It is creating unease among the consumers and because of that they don't feel comfortable. They don't want to spend the money that they have, so right now business is flat," Azan told The Sunday Gleaner.

"People are barely keeping afloat. In essence, businesses are teetering on the brink, so swift action is needed," added Azan.

Davon Crump, president of the Montego Bay Chamber of Commerce and Industry, recently added his voice to the many calling for Jamaica's economic framework with the IMF to be finalised in short order.

"This is critical for businesses and enterprises to plan and move forward in 2013 to build the Jamaican economy," Crump said.

"We (the Chamber) therefore implore the Government to immediately, and in the future, engage more of the business and commercial sector, including heads of governmental and civil society in the dialogue.

"We can only appreciate the ramifications of hammering out a deal when we are a part of it," argued Crump.

The word on the streets in western Jamaica is that some business operators are buying the US dollar for as much as three dollars higher than the official rate and, according to Crump, this is because of the uncertainties of Jamaica securing an IMF deal.

Dollar slide affects country

The Jamaican dollar has lost value steadily to its US counterpart since late last year and Azan noted that this is affecting every area of doing business in the country.

"Most of what is consumed in Jamaica is imported so what you will find is that the devaluation of the Jamaican dollar will affect cost," said Azan.

"If you earn in local currency, but the cost of goods is going up every day and the consumption power is weakening, you will lose confidence.

"It's hard to cushion the loss when it is moving that fast, because it is not just the dollar to pay for the goods, it's all aspects of the operation," added Azan.

He noted that when some businesses operators rush to buy the US dollar resulting in the Jamaican currency value falling, this will only lead to increased inflation."

That is a fear shared by businessman and former president of the Trelawny Chamber of Commerce, Dennis Seivwright, who has urged his colleagues not to buy US dollars on the black market at inflated prices.

"Our problem calls for all hands on deck," Seivwright told The Sunday Gleaner.

"The fact that we are all affected indicates a need for a united approach because this serves as an impediment to growth and if an agreement is not reached, we won't see the kind of development or investment that the nation needs."