EDITORIAL - The economy and the Goat Islands project
WE CAN hardly fault the discipline with which the Portia Simpson Miller administration has, over the past year, attended to Jamaica's fiscal affairs.
Its prudence was again on display this week with a revised Budget, tabled by the finance minister, Dr Peter Phillips. He snipped J$20 billion, or four per cent, from the J$521-billion Budget presented last April.
By so doing, Dr Phillips hopes to compensate for a shortfall in revenue, which for the first nine months of the fiscal year was running at J$11 billion, or four per cent below projections. The Budget cut is important if the Government is to meet its obligation to the International Monetary Fund of returning a fiscal surplus of 7.5 per cent of gross domestic product (GDP), which is critical if Jamaica is to have a real shot at paying off its debt that stands at over 140 per cent of GDP.
But that has a price of limiting Government's ability to stimulate the economy with its own spending. In the circumstances, responsibility for economic growth devolves primarily to the private sector.
SCANT FOREIGN INVESTMENT
Unfortunately for Jamaica, domestic capital remains skittish and not too many foreigners are lining up to invest their money here. Indeed, while foreign direct investment (FDI) recovered from the collapse of recent years, FDI of US$381 million was only around half the annual average during the early half of the 2000s. It peaked at approximately US$1.4 billion in 2008.
In the meantime, in an economy that has had annual average growth of less than one per cent a year for four decades, official unemployment is nearly 16 per cent, and twice that among young people. Many of those who have jobs are severely underemployed.
Jamaica desperately needs investment, economic growth and job creation - an important context to Omar Davies' elaboration on Tuesday on China Harbour Engineering Company's (CHEC) proposal for a trans-shipment port and industrial park in the Portland Bight/Goat Islands areas off the island's south coast.
The project would be worth upwards of US$1.5 billion. It has, however, spawned critics ranging from those conjuring images of Chinese hordes absconding with Jamaican jobs, to kind of neo-Luddian presumption and biases against industrial development.
Some, genuinely perhaps, have concerns that the proposed project is planned for an environmentally protected area, although the region is also the home of major industrial plants.
Dr Davies, the transport and works minister, was frank, in so far as is possible at this point, about the projected scope of the project. He insisted that final decisions would be subject to appropriate environmental analyses.
That would include, we expect, CHEC's proposal for a coal-fired plant to generate power for the facility at a cost that would make it economically feasible. We appreciate the global debate over carbon emissions from electricity-generating plants that burn coal. But note, too, the emergence of 'clean coal' technologies, carbon sequestration technique; the fact that coal remains a cheap form of energy, as well as vast numbers of emerging economies using developing electricity plants that burn coal. The coal issue is worthy of robust discussion.
But on the project more broadly, it cannot be beyond the capacity of Jamaicans to balance the environmental issues posed by the proposed location of this project, with the need to lift Jamaicans out of perpetual poverty by generating growth and jobs.
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