So, where's the growth?

Monday, September 24, 2018

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Dear Editor,

It seems like the International Monetary Fund's (IMF) strategy for Jamaica is not working. Despite passing all the tests, the solid platform is not generating great growth.

Yes, lots of Chinese investment and lots of jobs in the business process outsourcing and tourism sectors, but still little growth, and certainly not prosperity.

The problem seems to be Jamaica's private sector not investing, according to both Prime Minister Andrew Holness and our IMF country representative. The incentives to invest — in other than government paper — are apparently in place, but no response.

Holness, a great believer (like his mentor) in the capitalist free market and small government, may need to think again. Could it just be that the Government needs to start the ball rolling with some of the debt-servicing cash that is tied up with not only meeting, but exceeding the primary surplus target (incidentally, at seven per cent of gross domestic product — the highest demanded by the IMF in the world). We might then get an inclusive society in which everyone can access quality education, employment, health care, utilities, and transport links.

Or is it that our now very silent growth guru, Michael Lee-Chin, needs to step up and show the way using the level of profits still being made by National Commercial Bank — aided by still high bank charges and a very wide interest rate spread between lending and borrowing rates.

Holness is in a trap. Not willing to back calls for the Bank of Jamaica to regulate the banks, not willing to consider the State as a possible driver of growth, and now not even willing to blame Jamaica's private sector — he said he is merely encouraging them.

Years of wage restraint and hardship for so many Jamaicans seem to all be coming to naught. It is even being made worse now with the impact that the collapsing exchange rate will have on prices/inflation. The promise of prosperity (by both political parties) as the debt/GDP ratio comes down towards 100 per cent now seems empty.

But why should the power brokers, including the IMF, care? Continued debt slavery is what this financialised capitalist world is all about.

Paul Ward

Campaign for Social & Economic Justice

Kingston 7

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