Dear Editor,

It is a known practice that when an individual or organisation seeks a loan from any financial institution for whatever purpose, the common practice is that the person or organisation would be required to provide this institution with collateral asset(s) of a value that would guarantee the repayment of said loan.

I am not an economist nor do I have any academic qualifications in banking rules, laws, regulations, etc, but logic and mere common sense would tell me that if and when a government needs to borrow from any institution for the purpose of facilitating economic growth of their respective nation(s), the pre-requisites would be similar.

In the case of an individual or organisation, usually such assets would be property - developed or undeveloped - machinery and/or equipment, bonds, possibly a guarantor with such assets.

In the case of a government, my common sense tells me that the best assets a government can offer are its people and their productive ability.

In the 1990s, the PNP administration orchestrated policies that resulted in the destruction of an alleged 40,000 businesses that had been instrumental in various and sundry activities that contributed substantially to the economic development of Jamaica. These were business people who were proficient in their chosen fields and had been successful for over 50 years, some of whom had been borrowing from their financial institutions, repaying their debts, re-borrowing and repaying as the growth of their businesses progressed.

In my limited academic ability - not being an economist - my common sense tells me that the administration of the 1990s destroyed the collateral assets that would guarantee their loans from institutions like the IMF, IDB and the European Union.

Did any of the entities involved in the formation and execution of the Finsac policies - BOJ, the Government and the Opposition, and especially the Ministry of Finance, et al - really consider the long-term implications for Jamaicans and for the country? Did they think that Jamaica would never again need the help of loans in administering governance? Did they have other options of funding that no one else knew about, and if so, why are they going back to the IMF now? Was it that they thought that they could just sweep Finsac under the rug? Did they think that like Vegas - "what happens in Jamaica stayed in Jamaica" and so entities outside the shores of Jamaica would not have access to these events? How exactly did they plan to fund the economic growth of the nation?

In seeking funding today, how does this government plan to repay any loan acquired, and what assets are being offered as collateral? My suggestion: why not offer the Jamaican Redevelopment Foundation as collateral? They hold all the unsold assets, as well as the millions of liquid assets amassed from the Jamaican sell-out. Plus - pun intended - the name is very appropriate.

I only hope that the IMF, and all other such financial institutions whose remit is to fund governments, and especially the Jamaican government, will lay out mandates and put in place short-term policies that will ensure that every cent spent out of loans are accounted for in quarterly reports to them.

Yola Gray-Baker

President

Association of Finsac'd Entrepreneurs

Afegroup123@yahoo.com