Pretty money, ugly debt
A long-awaited series of banknotes promised by the Jamaican Government has finally appeared, and in a surprisingly anticlimactic manner from my point of view.
Meanwhile, people on social media have expressed a range of views regarding the banknotes’ true significance to the country’s current economic state. Frankly, some view it as a comical masquerade and cunning distraction by the Jamaican Government, and others welcome the visually appealing, novel approach to the printing of the nation’s money. However, many were apathetic as they had graver matters on their minds, such as the brazen kidnappings of our children in recent weeks and struggling to survive in a dystopian-like economy.
While reviewing some past articles on the banknotes, I came across one in particular, written by Andrew Laidley, senior business reporter for the Jamaica Observer, titled ‘New year, new money’, in which he highlighted Finance Minister Dr Nigel Clarke’s speech at the unveiling of the notes. Dr Clarke’s speech detailed some of the advantages that led to the Government’s decision to issue the new notes. Here are a few points to consider:
1)These new notes will (initially) solve the fixed and variable costs problem of printing banknotes every year.
2)These new banknotes are made up of a special substrate polymer, which makes them more durable so they will have a physical shelf life of at least two years.
3)The new notes come with enhanced security features which will make counterfeit production and money laundering much more arduous for the high-tech criminals.
Although being attractive benefits on paper, there are also some notable drawbacks that need to be addressed as well as a needed shift in focus towards deeper issues, such as unemployment rates, the gross domestic product (GDP), and GDP per capita. The printing of these special notes in my candid opinion will exacerbate the aforementioned issues and here’s why:
a)Printing more money won’t increase the economic output of the country, which will inevitably increase customer demand for goods and services and the inflation rate.
b)The inflation increase will make consumers lose their purchasing power long term and will lead to eventual erosion of the little money the average Jamaican working class has.
c)Government financing will be more difficult if too much money is printed and inflation rates spiral out of control.
While changing our national currency is good, we should be focusing on civil servants’ salaries, improving citizens’ standards of living, improving infrastructure, and addressing crime’s root causes.
University of the Commonwealth Caribbean