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Shaw blames Gov’t for ‘imminent recession’

Thursday, August 23, 2012 | 6:23 AM    

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KINGSTON, Jamaica - The opposition Jamaica Labour Party (JLP) says that the Government is to be blamed for a recession that it says is now imminent.


“The recession that now appears imminent must be placed squarely at the feet of the Government that has, in a few months, squandered the stable and growing economy that was handed over to them by the JLP Government in December of last year,” Opposition Spokesman on Finance, Planning, Growth and Economic Development, Audley Shaw said in a release, yesterday.


Shaw added that, over the past eight months, instead of working diligently and with rigour to preserve the post -2008 gains made by the JLP, “Minister of Finance, Dr Peter Phillips has presided over: the depletion of the Net International Reserves (NIR), with business people reporting difficulty in obtaining foreign exchange; the devaluation of the exchange rate; a sharp increase in the cost of living; and has returned to negative growth in the economy after growth of 1.3 percent last year”.


He said that, after at least six trips overseas and with 12 advisers and assistants by his side, the Minister has been unable to secure an agreement with the IMF, has not been able to source funds from the multilateral institutions and has not been able to source funds on the international capital markets.


“Instead, he has borrowed money locally at secret interest rates, which are clearly well above the 7.95 percent rate the JLP borrowed US$400 million last year,” Shaw said.


He commented that Phillips tabled the budget late for no good reason, and has failed to act on critical issues that require attention and could inspire confidence among investors and consumers and has, instead, talked his way into a recession.


"It is a recession of his own making and has been achieved even as the Prime Minister stood by in blissful silence," he said.


"Now the chickens have come to roost very early, and the Government is unable to chart a firm and predictable course and timetable for dealing with the major issues of moment including a new deal with the IMF."


Shaw stated that, now that the festivities are over, it is time for the Prime Minister to assess the performance of her Government, with particular reference to the Minister of Finance, to stop any further derailment of the economic gains they inherited, while taking steps to restore confidence in the management of the economy.


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