LETTER OF THE DAY - Don't overlook human cost of devaluation
THE EDITOR, Sir:
I am writing in response to Keith Collister's recent article titled 'Exchange rate is now about right' (Observer, July 9, 2014). This was a well-written, theoretic analysis of the topical subject of devaluation. However, it ignores the human dimension of the impact of devaluation on the life of the average Jamaican.
Consider this example. Let's assume that in 2012, a manual labourer earned $10,000 per week. Of this he spent approximately $5,000 per week to purchase basic food items such as bread, rice, meat, fish and a few canned items for himself and his family. This left $5,000 per week to cover his other expenses such as rent, utilities and clothing.
Today, just two years later, his income is only marginally increased. However, because of rampant devaluation, the same basic food items (which being imported or produced largely with imported inputs such as energy are subject to movements of the exchange rate) now cost $8,000 per week. This leaves him just over $2,000 per week to cover his other expenses.
How will this man continue to meet his needs and those of his family on his rapidly diminishing disposable income? More important, what will he do in another year or two when, because of ongoing devaluation, the cost of these basic items surpasses his income?
SHUNNING PRAGMATIC REALITY
Academics will argue that such individuals should get higher-paying jobs, that they should "retool and retrain", or that they should become "job creators" rather than "job seekers". Such logic is anchored more in whimsical economic theory than in pragmatic reality.
Where are these higher-paying jobs of which they speak? Is Jamaica now awash with such employment? And how will he "retool and retrain" without capital? Are there bankers and investors in Jamaica or elsewhere who are reckless or foolish enough to invest in individuals with pathetic financials?
The human dimension of devaluation, therefore, should not be overlooked. It leaves our poorest and most vulnerable trapped in a never-ending vortex of poverty, despair and desperation.
Though I abhor crime and criminality, is it not entirely predictable, therefore, that many will resort to nefarious activities such as lottery scamming, praedial larceny, electricity theft, drug trafficking, prostitution and fraud, simply in order to make ends meet? Are we leaving them any choice? Will we remain the proverbial dog chasing its tail when they do?
On our current trajectory, we will soon not have enough policemen, courts or prisons to deal with the avalanche of criminality which awaits. Our policymakers are well advised to think on these things.