Sat | Apr 1, 2023

The worst has passed

Published:Friday | January 1, 2010 | 12:00 AM

Bruce Golding, Prime Minister

My fellow Jamaicans. This past year was a tough one - tough for many of you, tough for the Government, tough for Jamaica.

It was a year in which we felt the full-blown effect of the global crisis with the closure of three of our four alumina plants, significant job losses and downturn in the economy.

There are signs that the worst has passed. The global economy is beginning to recover but that recovery is likely to be slow. Banks, especially those in the United States, our major trading partner, are hesitant to lend, having not fully recovered from the fallout of the last two years.

New banking regulations will not allow them to finance consumer spending as they did in the past. This will have an impact on our own pace of recovery - recovery in the bauxite/alumina industry and the export sector, tourist arrivals, foreign investment and remittance flows. It is a sharp reminder to us of the need to strengthen and diversify our own economic base, creating new industries, new centres of growth and targeting new markets.

Hard truths

The harsh experiences of last year also tell us that we have to put our house in order. If ever we needed to learn some hard truths, it is that borrowing and borrowing in order to spend what we have failed to earn is the surest path to ruination. The International Monetary Fund agreement being negotiated is necessary to help us through the current crisis but it is our own resolve to contain expenditure, eliminate waste and corruption, increase our earnings and our revenues that will secure the brighter future we all want for Jamaica.

Although the economy experienced difficulties last year, we achieved significant success in tourism, where we enjoyed a modest increase in stopover arrivals despite the global recession, outperforming all other competing Caribbean destinations. Agriculture was another area of significant success, with strong growth recorded last year. We will build on these successes, in the new year.

The tight fiscal constraints we will continue to face in the medium term mean that the private sector must be encouraged and facilitated to lead the way in expanding economic activity. This is as it should be but is now more crucial than ever. That is why reducing the rate of interest - not simply taxing it - is our strategic direction.

That is why increasing further the flow of credit to micro, small and medium-size enterprises is our strategic direction because they are the surest way to fast-start the economy and create jobs. That is why the start-up this year of a number of major investment projects on which we have been working diligently is also our strategic direction, because they will create vertical and horizontal linkages for local businesses to develop or expand.

2010, in many ways, will be a defining year. It will pose many challenges that we must be bold enough to confront and overcome. It will also provide opportunities that we must be alert enough to take advantage of. We are expecting the economy to return to a path of growth by the middle of the year, modest though it is likely to be, but a new beginning which we must accelerate.

Tackling the development deficit

Recovery is one thing but we must also tackle the development deficit that has plagued us for so long, for the many years of anaemic growth. Developing our human resources is at the centre of our long-term strategy, because no country can be developed unless its people are equipped with the education, training and technology to drive its development.

Crime is another major obstacle to development. The number of murders committed last year, while still less than the level of 2005, is way beyond what any stable society can tolerate. This year will also be a defining year for our security forces to demonstrate that they can apply the intelligence capability and all the available resources to defeat the criminal elements that are so effectively undermining our development, to demonstrate, also, their continued resolve to rid themselves of the criminals in uniform who are sabotaging their efforts to fight crime.

Bruce Golding

Prime Minister