EDITORIAL - Dr Phillips in Beijing

Published: Sunday | December 15, 2013 Comments 0

Hopefully, this week's visit to China by the finance minister, Peter Phillips, and supporting technocrats won't be the subject of the facile sniping that followed trips abroad by Dr Phillips' boss, Prime Minister Portia Simpson Miller.

For even in today's world of instant communication technology, there are some things in international diplomacy and economic transactions which are better accomplished face to face, rather with electronic mediation.

And while the specific, rather than broad, objectives of Dr Phillips' trip to China have not been spelled out, Beijing is not a bad place for any finance minister, especially one who presides over an economy that is riddled with debt, starved of growth, and in need of investment.

The doubters, in this respect, should ask Britain's chancellor of the exchequer, George Osborne. He was there a month ago.

In any event, we assume that this visit by Dr Phillips - and including central bank Governor Brian Wynter, Financial Secretary Devon Rowe and Development Bank of Jamaica CEO Milverton Reynolds - is a direct follow-up to Prime Minister Simpson Miller's in August.

The PM, at that time, advanced negotiations for a US$300-million loan from China's Export-Import Bank for road and other infrastructure development, as well as a grant of US$16 million for social investment. She also appears to have reignited Chinese interest in Harmony Cove, the long-proposed-but-stalled integrated resort development for Trelawny on Jamaica's north shore.

FISCAL AUSTERITY

It is important for these negotiations to be completed to provide Dr Phillips with certainty about the Budget now being crafted for the next fiscal year, and to enhance the possibility of growth in the face of fiscal austerity demanded under Jamaica's agreement with the International Monetary Fund (IMF).

In that regard, we suspect that there is more on the agenda than these specific issues, including seeking from the Chinese not only commitments for foreign direct investment, but future low-cost loans that fit comfortably within the framework of the IMF agreement.

But the Chinese are likely to have requests and demands of their own, including the need for our Government to be far more expeditious in moving from broad principle to specific agreement and execution of projects. Indeed, the Chinese firm which is already developing a US$650-million north-south tolled highway is likely to be frustrated over how slowly we have proceeded on its idea for a US$1.5-billion trans-shipment port and logistics hub at Goat Islands, off Jamaica's south coast.

This newspaper urges the Jamaican Government to rapidly accelerate the pace of these projects, certain - despite the squeals from some quarters - that it has no reason to be bashful about deals that will create jobs and growth.

To those who claim that there is an over-reliance on Chinese investment, we make two points: That there is no rush by others to put their capital in Jamaica; and second, to look at what others, including the United Kingdom and Mr Osborne, are doing to attract some of the US$3.66 trillion in foreign reserves held by Beijing.

In October, the British exchequer agreed to amend the country's banking rules to make it easier for Chinese banks, via subsidiaries, to operate in the UK.

This newspaper has in the past proposed that Jamaica suggest the use of Kingston as a Chinese hub for institutional banking for this region. We repeat the idea.

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.

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