Sat | Apr 21, 2018

Exporters frownon J$ depreciation

Published:Wednesday | October 30, 2013 | 12:00 AM
Dr Bert van Selm (left), resident representative of the International Monetary Fund to Jamaica, and Andrew Collins, president of the Jamaica Exporters' Association (JEA), at a breakfast forum at the JEA's Winchester Road, St Andrew, offices yesterday. - Rudolph Brown/Photographer

The continued deprecia-tion of the Jamaican dollar against the benchmark currencies is severely impacting exporters' ability to plan, budget, negotiate and do accurate forecasting, according to president of the Jamaica Exporters' Association (JEA), Andrew Collins.

"There are those who believe that exporters are happy with the exchange movements," but "that is furthest from the truth," Collins told members at a breakfast forum at the JEA's Winchester Road, St Andrew, offices yesterday.

The JEA, which held the forum under the theme, 'Jamaica's Growth Strategy and the Alignment with Targets under the International Monetary Fund (IMF) Agreement', said members were concerned about the need to realise economic growth and to see the stabilisation of the Jamaican dollar against the US dollar and other major currencies.

However, the IMF Resident Representative Dr Bert van Selm, answering questions from JEA members, said the depreciation in the exchange rate should help to bring it to a level to improve competitiveness.

Senior vice-president for treasury, trading and asset management at Mayberry Investments, Dino Hinds, who was addressing the same function, said the Jamaican dollar has depreciated by 13 per cent year to date, the highest since 2009.

He said the depreciation is expected to continue for the remainder of the year and into next year.

Collins reiterated one of their concerns and sought the assurance of the IMF that while Jamaica implements the terms of the four-year loan agreement that consideration be also given to the vulnerability of the export sector and that sufficient flexibility will be exercised to enable the Government to make the necessary investments to stimulate and grow the economy.

Plans to streamline duty drawback scheme

The JEA, he said, submitted recommendations for increased support to the sector for inclusion in the draft of the Omnibus Tax Incentives legislation with a view to growing exports.

That includes a proposal to streamline the Duty Drawback Scheme, where exporters benefit from having duties on all imported inputs waived.

"This is consistent with the emergence of global value chain with their attendant rise in the trade of intermediaries which makes such a policy mandatory," Collins said.

"We are also asking that tax credits ... be introduced to spur innovation, enhance competitive-ness, boost productive capacity and facilitate the emergence of new goods and services," he added.

The JEA president also called for special tax incentives for the sector to attract new investors and support existing exporters.

They would also like to see a stronger push for the implementation of outstanding initiatives under the national export strategy, which provides an ideal programme for developing and growing exports, he said.

"We call for a more facilitating business environment," said Collins. "For almost 15 years, the country has been working on the development and implementation of a trade portal-trade point system. We welcome steps by the Trade Board to advance the single-trade electronic window and await the completion of the initiative," he added.