Shaw: Lagarde should apologise

BY ALICIA SUTHERLAND Sunday Observer staff reporter

Sunday, July 06, 2014

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MANDEVILLE, Manchester — Opposition Spokesman on Finance Audley Shaw has reiterated the view that some of the utterances made by the Managing Director of the International Monetary Fund (IMF) Christine Lagarde on her recent visit to Jamaica were not only controversial but also inappropriate.

He said that there were occasions when she crossed the line from being non-political to making statements, which can be construed as political interference.

Shaw, while addressing the Manchester Chamber of Commerce meeting late Thursday, said that he will stay away from some of the remarks that were made but that there are "one or two" that need to be "answered".

One such instance, he said, was where Lagarde suggested that Jamaica did not have to fear being considered a "pariah" on foreign markets.

"No minister of finance in Jamaica that I know of — on either side of the House (Parliament) — has ever been considered to be a pariah on the international market. No prime minister on either side of the house as far as I know has ever been identified as a pariah in the foreign market. Therefore, I stand in defence of prime ministers on both sides and ministers of finance on both sides. The managing director of the IMF should really withdraw that comment," said Shaw.

He said that there is no history of governments of Jamaica not honouring their commitments on the international scene and a comment by Lagarde suggesting otherwise required that Finance Minister Dr Peter Phillips pen a "cordial" letter advising her that that has never been the case.

"We must protect our national dignity," Shaw said, adding that in its activities across the world the International Monetary Fund is not a perfect body and its "orthodoxy" is not always right for countries.

A case in point, he said, is the suggestion by Lagarde that the Jamaican dollar is not yet at a competitive rate and further devaluation should be expected.

Shaw said that empirical evidence has shown that devaluation as a strategy for competitiveness has not proven effective.

He said that even technocrats from the IMF, Inter-American Development Bank and the World Bank are having second thoughts about the benefits of devaluation.

"It's not about fixing an exchange rate. It's about fixing the economy in such a way that you build the confidence, people step forward and invest their money (and) we earn our way. The more we earn is the less the question of the exchange rate becomes an issue in our economy," he said.

The Opposition spokesman on finance said that the anticipated visit of the IMF's managing director has ended and the "fundamentals" remain the same, emphasising that the country is still totally dependent on imported oil and the energy situation is in disarray.

He suggested that ways to grow the economy will include recapitalising and expanding the export/import bank of Jamaica, reducing transfer taxes and stamp duties to stimulate transactions and investments in real estate, fast tracking new and cheaper sources of energy and that JAMPRO (Jamaica Promotions Corporation) needs to "come alive" and find business opportunities, both in Jamaica and abroad/




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