Cabinet pores over report on preliminary IMF talks

[evanovitch]

Cabinet pores over report on preliminary IMF talks
Monday, 20 July 2009
The country's Cabinet should now be poring over a report from Finance Minister Audley Shaw on preliminary discussions held with officials of the International Monetary Fund (IMF).

For several weeks the government has been engaged in discussions with the Fund on the possible resumption of a borrowing relationship.

The government says given the current economic crisis and the dwindling funds available to finance the budget the country has little options outside of the once dreaded IMF.

He claims that the IMF has softened its hard line stance of previous years which saw it imposing stringent conditions on borrowers.

The Prime Minister has already indicated that discussions with the IMF are ongoing, because the government wants to know what the terms and conditions are likely to be.    

He said these terms and conditions will determine whether to formally apply for a standby loan facility.                                                

And public sector workers have also expressed concern about what the IMF's relationship with the government will mean for their jobs.

Trade union leaders say they are trying to meet with the Ministry of Finance this week to discuss how Government-paid workers will be affected.

Speculation is rife that a cut in the civil service is one of the loan conditions that the Fund will impose on Jamaica.    

                                                      

 

[evanovitch]

Re: Cabinet pores over report on preliminary IMF talks

"Speculation is rife that a cut in the civil service is one of the loan conditions that the Fund will impose on Jamaica."

[evanovitch]

Re: Cabinet pores over report on preliminary IMF talks


By Sir Ronald Sanders
Consultant and former Caribbean diplomat
 

 


There may be lessons for Caribbean countries in negotiations between Latvia and the International Monetary Fund (IMF) for a rescue programme totalling about US$10.4 billion.
Latvia is a relatively small member country of the European Union (EU).

Its population of 2.3 million is roughly the same as Jamaica.

Until 1991 it was a member of the Union of Soviet Socialist Republics (USSR) dominated by Russia.

With the break-up of the USSR, Latvia regained its independent status and elected to join the EU in 2004.

Bailout programme

Between 2000 and 2007, Latvia enjoyed one of the highest GDP growth rates in the EU, but this collapsed in late 2008 exacerbated by the global economic crisis and shortage of credit.

The economy dramatically fell in the first quarter of 2009 by 18%, the biggest fall experienced by any EU country.

Since last year, the Latvian government has been engaged in negotiations with both the EU and the IMF on the $10.4 billion bailout programme.

Anxious to help an EU member state, and mindful that Latvia has pegged its currency to the Euro – the official currency of most of the EU members – the EU Commissioner for Economic and Monetary Affairs Joaquin Almunia has announced the release of $1.6 billion as a rescue loan payment but only after extracting budget cuts worth $1 billion from the Latvian government.

In the event, the EU loan is only 10 percent of Latvia’s needs, and it is the IMF to which the government is looking for the greater part of its borrowing.

The going has not been good.

And, despite the rhetoric about more flexibility in fiscal and monetary policies in light of the present and ongoing global financial crisis, the IMF is still pushing tight fiscal policy, cuts in government spending and very low inflation as conditions for its lending.

Before Latvia, Romania faced similar problems with the IMF.

It is reported that the IMF mission chief for Romania said that in exchange for $17.5 billion, there were requirements to bring down budget deficits below 3% of GDP, restructure wages policies, recalibrate pension schemes and reduce inflation.



The IMF imposed conditions for Latvia to qualify for rescue funds
In this regard, the much vaunted increase in IMF resources up to $750 billion after the G20 meeting in London last April could mean little.

It seems that what remains vital is the need for reform of IMF terms for lending, or, as the Third World Network has suggested, "additional resources to the IMF would give it the means by which to discipline crisis-hot countries the wrong way, worsening the crisis for them."

Conditions

Going back to Latvia specifically, the government announced that the IMF has imposed fresh conditions for it to qualify for rescue funds.

Other reports also indicate, as this commentary is being written, that Latvia has been given a deadline by the IMF to agree its conditions, or the negotiations will end.

The Prime Minister, Valdis Dombrovskis, said the negotiations had turned contentious, largely over how quickly to cut the country’s budget deficit.

The government wants to reduce the budget deficit, which could hit 10 percent of GDP this year, to 3 percent by 2012, but the IMF wants a faster rate of reduction.

Following riots in its capital city, the Latvian government is naturally unwilling to accept the IMF proposals lest discontent in the country results in further upheavals.

The IMF also wanted Latvia to devalue its currency, arguing that the present link to the Euro is unsustainable.

A devalued currency, they say, would make Latvian exports cheaper.

But it would also make imports more costly and push-up the cost of living.

Fortunately for Latvia the IMF appears to be persuaded by the EU to back-off from a requirement for devaluation at this time.

Nonetheless, Latvia is not out of the woods. The Prime Minister has said that IMF backing for its whole programme is necessary even if the government raises the money it needs from other sources.

The major areas of contention appear to be: cutting budget deficit levels, further tax rises and reducing spending in key areas like education, welfare and health even though Latvia has already made cuts that included reductions in public sector salaries and a 10 percent reduction in pensions.

Asking IMF's help

Several Caribbean countries are now considering engagement with the IMF to help their ailing economies.

A few of them have already entered special arrangements that are not rescue programmes.

For instance, St Vincent and the Grenadines has an arrangement under the Exogenous Shocks Facility (ESF) which has a higher degree of flexibility and does not include structural conditions but does require a low inflation rate.

Dominica has also received $5.1 million from the IMF under the same ESF.

The government had to commit to aim for annual primary surpluses of at least 3% of GDP so as to reduce public debt.

It also had to agree to finance capital largely with external concessional resources – a hard task indeed at a time when concessionary financing is drying-up.

Jamaica is presently talking with the IMF about a possible Standby Agreement for Foreign Exchange Balance of Payment Support.

The details of the sort of programme that Jamaica is seeking and the terms that the IMF has put on the table are not known as this commentary is being written.

But the Finance Minister Audley Shaw has said that “there is no need for the great concern for conditionalites that will be oppressive; that will be destructive to the social sector; that will be destructive to the financial sector. Not at all”.

Jamaica has enough experience with the IMF and enough people who have worked within the IMF, to negotiate the best terms possible.

But, it is as well for all Caribbean countries to keep their eyes focused on the Latvian experience to which the IMF would be much more sympathetic because of the EU’s lobbying and the place of its key member states on the Executive Board.

So far, the IMF does not appear to have relaxed its tough conditionalites.

It is also necessary for the Caribbean to join with others for meaningful reform of the IMF’s lending terms.

The existing terms could make hard-hit economies worse rather than better.

The forthcoming Commonwealth Finance Ministers meeting is a good place to advance the arguments for urgent reform.

Responses to: [email protected]

 

[Dr.Dudd]

Re: Cabinet pores over report on preliminary IMF talks

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: evanovitch</div><div class="ubbcode-body">&quot;Speculation is rife that a cut in the civil service is one of the loan conditions that the Fund will impose on Jamaica.&quot;

</div></div>They are going to try to use theIMF as an excuse to cut thecivil service and hire out the service to some profit makingcorp, that will do like thepriovate cprp idi withthe IRS and the Philadelphia school system. That is because they are bilndly folowing the policise that brough the US to it's knees.
Jamaica is in a time warp.
They are follpwing the stories that the US passing off real cause. As for the IMF, that are not going to change like they say. They are just uoto aniother con game. POromise youthatthey wilkl change,but don't and blame the country for the devastation caused by the pokicies they demand in exchange for the loans.
Most of the time they never pay out what they forst promise. Just another con game.

[evanovitch]

'NO ALTERNATIVE THAN TO RESUME IMF BORROWING' - SHAW

'NO ALTERNATIVE THAN TO RESUME IMF BORROWING' - SHAW
JamaicaObserver.com
Posted: 7/21/2009 2:58:53 PM
SPEAKING in Parliament today Minister of Finance Audley Shaw announced that Jamaica is going to resume its borrowing relationship with the International Monetary Fund with a formal application to be submitted mid-August, to be reviewed by the IMF when its board meets again at the beginning of October.

Jamaica is to apply for 300 per cent of its special drawing rights (SDR) from the IMF valued at US$1.2 billion over the next three years.

Shaw said that the Jamaica Labour Party (JLP) administration had no alternative but to seek IMF assistance given the recession and a shortfall in government revenue.

However he argued that the support would be granted on a more favourable basis than in the past with an IMF team visiting Jamaica next week to continue negotiations.

[Dr.Dudd]

Re: 'NO ALTERNATIVE THAN TO RESUME IMF BORROWING' - SHAW

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: evanovitch</div><div class="ubbcode-body">'NO ALTERNATIVE THAN TO RESUME IMF BORROWING' - SHAW
JamaicaObserver.com
Posted: 7/21/2009 2:58:53 PM
SPEAKING in Parliament today Minister of Finance Audley Shaw announced that Jamaica is going to resume its borrowing relationship with the International Monetary Fund with a formal application to be submitted mid-August, to be reviewed by the IMF when its board meets again at the beginning of October.

Jamaica is to apply for 300 per cent of its special drawing rights (SDR) from the IMF valued at US$1.2 billion over the next three years.

Shaw said that the Jamaict a Labour Party (JLP) administration had no alternative but to seek IMF assistance given the recession and a shortfal in government revenue.

However he argued that the support would be granted on a more favourable basis than in the past with an IMF team visiting Jamaica next week to continue negotiations. </div></div> Now you see why the US objected to China buying the Alcoa interest when it was up for sale and agreed for the Russians to buy it?
the Russians owe the West are financed by the west. So they close it down on orders. If it was owned by China they would have kept it going. Just as they did with primary metals from Australia. They kept them running. they bought from Brazil and are still buying from Brazil.
The Jamaica Bauxite end up being almost a monopoly and like they did during the 70's and forced Manley to sell to Russia to keep the country going. they did it again. The Jamaican Politicians never learn. That when it comes to Jamaica everyone of their so called friends are anything .
They sell them a bag of goods just as they are planning now. You Watch how much of that1.2 billion the Jamaican government will get. Yet they don't tell you that Jamaica will have to pay for the whole contracted amount,because it has to be put away for them. Although they know that they will not get it. The IMF are always encouraging countries to sign for an enormous amount,that they will ah veto pay to hold yet they will never received anywhere close. In that case although you are quoted a low interest rate, the amount you pay as against what you recieve is almost commercial rate.
Jamaica should have gone to China. China need Jamaican as much as Jamaica need China, it is only politics why this is not attempted.

[evanovitch]

Jamaica goes back to IMF seeking US$1.2 billion loan facilit

Jamaica goes back to IMF seeking US$1.2 billion loan facility


CMC

Posted: 7/21/2009 5:03:19 PM

KINGSTON, Jamaica — Government is seeking an estimated US$1.2 billion from the International Monetary Fund (IMF), Minister of Finance Audley Shaw announced today.

In a statement to Parliament following preliminary discussions between a Jamaica government delegation and the Washington-based IMF, Shaw said that the matter had been discussed at a Cabinet meeting yesterday where an assessment of the current trends in the local economy was also undertaken.

Shaw said that the general conclusion reached at the Cabinet was that given the objective reality of the fall out in foreign exchange earnings and foreign capital flows as well as the lack of access to the international capital market, the island had no choice but to seek assistance from the IMF.

“Jamaica has no real option at this time but to return to a borrowing relationship with the IMF,” he said, adding “accordingly, Cabinet yesterday authorised the Minister of Finance and the Public Service to make a formal application to the IMF to seek to borrow up to 300 per cent of quota (approximately US$1.2 billion) in a Stand by Arrangement”.

Shaw told legislators that a passive balance of payments projections point to a financing gap of between US$600 - US$800 million in 2009-2010.

He said that a general distribution of more than US$250 billion among all member countries has been approved by the Board of the Fund and is likely to be ratified by the Board of Governors.

“Jamaica’s share of this allocation would boost resources available to the Bank of Jamaica by approximately US$320 million before the Annual IMF/World Bank Meetings in early October.”

Shaw said that the conclusion of a Stand-By Arrangement by September, in which the IMF is expected to commit the equivalent of US$1.2 billion over two years, “would provide Jamaica with the wherewithal to meet all its external commitments.

“It would be expected that at least US$400 million of the Stand-By Arrangement would be available ‘up front’. This pool of convertible funds and the endorsement of the Fund would also smooth the flow of approximately US$400 million to US$500 million from other multilateral sources and make the

IMF funds a truly precautionary arrangement.”

The Finance Minister, who also warned of the “prospect of a severe contraction in the local economy beyond the present crisis”, told Parliament that the Bruce Golding administration proposes to have further discussions with the IMF “during the course of next week and to keep Jamaica informed on the substance of these talks.

“We expect to complete the preparatory work and documentation by mid-August and to make a formal submission to the Executive Board of the IMF when it resumes in September.”

Shaw said Government was “acutely aware of the apprehension that many feel in our approaching the IMF and we will continue to consult with our stakeholders as far as practicable so that we can all be assured that we move together as one towards a more prosperous future”.

Earlier this year, Government said that the Ministry of Finance had developed a medium-term economic programme for presentation to the IMF that includes the revised medium-term targets and draws heavily on the proposed reforms to the financial and tax systems that are already underway.

The government said the global financial crisis and continued concerns about the country's balance of payments, as well as pressure on the Net International Reserves (NIR) were the main reasons for exploring a medium-term economic programme with the Fund.

It said that the approach to the IMF comes against the background of a recent World Bank report, which stated that the world economy is projected to decline further than initially anticipated — by 2.9 per cent instead of 1.7 per cent.

Prime Minister Bruce Golding said that his administration would only enter into an agreement with the IMF if the terms are beneficial to Jamaica.

Shaw told legislators that the traditional conditionalities that accompanied IMF borrowing arrangements were no longer in practice.

“Such terms in the past included ‘prior actions’ such as exchange rate action, legislation... and structural changes such as liberalisation. These lending arrangements led to denial of ownership by borrowing countries and the development of a political stigma around IMF arrangements,” Shaw said.

He said while IMF support is more liberal and more focused on the general evolution of policy rather than discrete steps, there has been no lowering of the standard with respect to the need for presentation of an internally consistent set of projections and policies. It is important to emphasize that Fund support is being sought for a programme defined and presented by Jamaica.

“The Government has already entered into several agreements with other multilaterals which support a programme of reform in the public sector, the provision of social and economic infrastructure and a range of programmes to enhance human development.

“This implies that the measures advanced by the authorities for closing financing gaps in the public sector will be consistent with commitments given to other multilaterals.”

Shaw said that exploratory discussions have been taking place with the IMF since June and these consultations are essentially three areas the IMF would like to see Jamaica strengthened as part of a foundation for medium term sustainability.

He said the areas are the consolidation of public enterprises, the formulation of a debt strategy for the medium term that will relieve the extraordinarily high debt service burden and steps towards limiting the size of future deficits.

“These areas are not new and are already being pursued by the administration. The key issue for immediate consideration among stakeholders is the need for a compression of Government spending in the current fiscal year to meet the limits set by available revenue and borrowing.

“These are decisions that would have to be made with or without an IMF programme. However, the inflows associated with IMF support will make such adjustments easier and set the stage for a more sustainable fiscal path into the future,” Shaw said.

[johnnycakes]

Re: Jamaica goes back to IMF seeking US$1.2 billion loan fac

In other words, more of the same economics that have never worked.

Brilliant.

[evanovitch]

Mixed reactions to return to the IMF

Mixed reactions to return to the IMF
Wednesday, 22 July 2009
The government has been receiving mixed reactions to its decision to resume borrowing from the International Monetary Fund, IMF.

Among those expressing concern are trade unions representing public sector workers.

The workers believe their jobs could be in jeopardy since the government will have to reduce expenditure.

The National Workers Union (NWU) says it has given the government until next week to meet with the trade union movement to outline details on the proposed deal with the IMF.

But the Private Sector Organization of Jamaica (PSOJ) has come out in support of the Government's decision to return to the IMF.

PSOJ President Joseph Matalon says given the severe contraction in the Jamaican economy, the decline in foreign exchange earnings and the lack of access to international capital markets, pursuing a borrowing relationship with the IMF is a prudent policy action.

[Amberal37]

Re: 'NO ALTERNATIVE THAN TO RESUME IMF BORROWING' - SHAW

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Jamaica should have gone to China. China need Jamaican as much as Jamaica need China, it is only politics why this is not attempted.</div></div>

<span style="font-weight: bold">
<span style="font-size: 14pt">No way!!!</span></span> better the devil you know... and there's a &quot;new world order&quot; so to speak!!
Would not trust giving so much power to the Chinesse in Jamaica at all!! Too closed, and unaccountable.

[Amberal37]

Re: Cabinet pores over report on preliminary IMF talks

Though I have an issue with Ja. going to the IMF - more the situations that got us to this juncture, I don't buy what this Mr Sanders identifies as 'lessons' from Latvia.

Without having the option to sell bonds at the extortionate rate, the government of JA. has a lender whose jobs is to bail out countries. ANY lender lending large - essentially unsecured - sums will impose tough conditionalities.

Having been involved in such negotiations in corporations, the do impose what are called &quot;covenants&quot; which while initially strict, also serve as a general guideline and benchmark for the institution to work towards.

Let's see:
<span style="font-weight: bold">Devaluing the currency </span>
Latvia's link to the EURO IS unsustainable! the Euro is also overvalued and damaging Spain &amp; Greece - Devaluation definitely a good thing for Ja.
This will firstly offset the high inflation of former years, making it cheaper for tourists to buy things - bringing in more money.
<span style="font-weight: bold">But this can ONLY be effective for the economy if fiscal policy and INFLATION is kept in check</span>.
Hence, reducing, not increasing money supply (raising sales tax is one method) offering tax rebates for companies to employ and train people at a particular salary and above.
Thereby also generating more employment and employment taxes.

Of course imports will be more expensive!! The Ja economy should focus on MAKING especially it's own food - it has the resources for THAT atleast. It also will hopefully reduce the cheap imports from India and China that are eroding the native entrepreneurial fabric, and not giving anything back to the people.

<span style="font-weight: bold">Keeping inflation in check </span>- you guys HAVE the luXURY of low inflation in areas such as US, Canada, UK! do hopefully I don't need to explain why.

Cut government spending - well start with the police force, and use some of that to train those youngsters that are likely to commit crime. <span style="font-weight: bold">Do NOT cut teachers</span>, but restructure. Look at cutting government civil servants.
Do not tie up their financial resources with the national housing trust - it is innefective! it DOES NOT WORK! make the people build their own houses by getting them into jobs and let let the banks lend to the, but the government regulate, and mediate IF NECESSARY (this can be funded by planning taxes, etc.).

[RichD]

Re: Cabinet pores over report on preliminary IMF talks

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: amberal37</div><div class="ubbcode-body">
Let's see:

Devaluation definitely a good thing for Ja.
This will firstly offset the high inflation of former years, making it cheaper for tourists to buy things - bringing in more money.
<span style="font-weight: bold">But this can ONLY be effective for the economy if fiscal policy and INFLATION is kept in check</span>.
Hence, reducing, not increasing money supply (raising sales tax is one method) offering tax rebates for companies to employ and train people at a particular salary and above.
Thereby also generating more employment and employment taxes.

Of course imports will be more expensive!! The Ja economy should focus on MAKING especially it's own food - it has the resources for THAT atleast. It also will hopefully reduce the cheap imports from India and China that are eroding the native entrepreneurial fabric, and not giving anything back to the people.

<span style="font-weight: bold">Keeping inflation in check </span>- you guys HAVE the luXURY of low inflation in areas such as US, Canada, UK! do hopefully I don't need to explain why.

Cut government spending - well start with the police force, and use some of that to train those youngsters that are likely to commit crime. <span style="font-weight: bold">Do NOT cut teachers</span>, but restructure. Look at cutting government civil servants.
Do not tie up their financial resources with the national housing trust - it is innefective! it DOES NOT WORK! make the people build their own houses by getting them into jobs and let let the banks lend to the, but the government regulate, and mediate IF NECESSARY (this can be funded by planning taxes, etc.).

</div></div>

sounds fantastical....

[Dr.Dudd]

Re: 'NO ALTERNATIVE THAN TO RESUME IMF BORROWING' - SHAW

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: amberal37</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Jamaica should have gone to China. China need Jamaican as much as Jamaica need China, it is only politics why this is not attempted.</div></div>

<span style="font-weight: bold">
<span style="font-size: 14pt">No way!!!</span></span> better the devil you know... and there's a &quot;new world order&quot; so to speak!!
Would not trust giving so much power to the Chinesse in Jamaica at all!! Too closed, and unaccountable.

</div></div>I Have seen over the years many ho write similar to you over the last 30years,and I have always come down opposite to them. And guess what/ I am still here writing my analysis and not one of them can come out and open their mouth today.There are lots of people who believe they know economics, but they actually know only half of the theory that governs economics. 99% of those who are writing today couldn't sit in my economics class when i was lecturing . And that was in my20's.The reason is that they did bother to study sociology. One thing I can say is . You can't actuatrely analyse economics without having a very good understanding of sociology.Emotions do not come into this. Only a crazy person would suggest that it is better to follow the devil you know than the one you don't.
In That is what keep us in the economic doldrums. It is called <span style="font-size: 17pt">cowardice </span>. Can you believe that if all countries had followed that principle where they would be?
There would never be any discovery. Their idea is completely opposed to all principles of economics,management, development and every discipline that is required for progress.
You need to go research the name Ronald Saunders. You must be either be very young or haven't followed Jamaican economics at all. I notice you suggest that devaluation will be of benefit to the Jamaican economy. You need to stop using half of economic theory to solve economic problems. That is what happen to people who believe that economics is an art and not a science. They calculate a part and then take the views of others to make up for the rest.It is possible to calculate All aspects of economics. You just have to use the appropriate data and you will always be correct. That is what I do . And since I have been analysing economic programs. <span style="font-size: 14pt"> I have never been wrong in any of my economic predictions. That is many years and many programs. </span> I have predicted every single economic failure years before then come to pass. And I have come against only opposition . Well it has abated these few years. Since every time I project a different outcome from the majority,they eventually adopt my view.
You can name any so-called economic analysts,and i have had them sitting on the sideline until I propose my analysis on the program.
That is why you don;'t see the chorus of analysts chanting the advantages of going to the IMF. Yes you name them I have opposed them and i have proven every single one of them wrong.
SO all i will say at this time is that the IMF has proven that it has no interest in the economic progress of developing countries. It' interest is to make the assets of the countries attractive to investors of developed countries. Usually what that does is undervalue the assets to attract these investors that take as much as they can,and before the country can see benefit,move on to the next carcass. They drive the value of the GDP of countries they involve in down instead of up. Devaluation only benefit countries that has control over their raw material costs. So the raw material cost will go down with the devaluation of the currency. Jamaica imports everything. As a result all devaluation does is to increase the numerals on the value but does not-decrease the costs. It does not matter what is the number on the Jamaican bill. it will still but the same stuff it would with any number. Since the costs floats with the foreign currencies they are bought in. And of you think that you can reduce imports due to devaluation that is only temporary.
Since as the dollar devalue the riots start and the people strike and the losses compound. That is what sociology does in economics. There is no economics without sociology. What some people think is economics is really statistics, that have little relevance to predictions of outcome. And that is what is necessary in these projects. All Jamaica's imports and exports are transacted inferior exchange. All it produces are minimally transformed imports. The Food is imported. the oil,is the hotel supplies and they are all quoted in foreign exchange,and will not be influenced by devaluation. The only area where devaluation really depress is taxes. Land taxes and labour., The problem is that labour will riot and change everything, but taxes always lag. What that will do is widen the defect,even if spending is reduced. since Jamaica is pared close to the bones. Any closer, they won't be able to supply medication to the hospitals. Then every thing will really crash.

[Dr.Dudd]

Re: Cabinet pores over report on preliminary IMF talks

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: amberal37</div><div class="ubbcode-body">
Let's see:

Devaluation definitely a good thing for Ja.
This will firstly offset the high inflation of former years, making it cheaper for tourists to buy things - bringing in more money.
<span style="font-weight: bold">But this can ONLY be effective for the economy if fiscal policy and INFLATION is kept in check</span>.
Hence, reducing, not increasing money supply (raising sales tax is one method) offering tax rebates for companies to employ and train people at a particular salary and above.
Thereby also generating more employment and employment taxes.

Of course imports will be more expensive!! The Ja economy should focus on MAKING especially it's own food - it has the resources for THAT atleast. It also will hopefully reduce the cheap imports from India and China that are eroding the native entrepreneurial fabric, and not giving anything back to the people.

<span style="font-weight: bold">Keeping inflation in check </span>- you guys HAVE the luXURY of low inflation in areas such as US, Canada, UK! do hopefully I don't need to explain why.

Cut government spending - well start with the police force, and use some of that to train those youngsters that are likely to commit crime. <span style="font-weight: bold">Do NOT cut teachers</span>, but restructure. Look at cutting government civil servants.
Do not tie up their financial resources with the national housing trust - it is innefective! it DOES NOT WORK! make the people build their own houses by getting them into jobs and let let the banks lend to the, but the government regulate, and mediate IF NECESSARY (this can be funded by planning taxes, etc.).

</div></div>

sounds fantastical....

</div></div> Yes like fantasy Island. the same failed strategy that has been passed of as real economics . Reaganomics. Although you have no demand you should give incentive to businesses to employ people. It never work. The only thing that creates employment is demand for labour. No amount of incentives has ever increased the demand for labour unless the demand for production justifies this. No amount of tax breaks. especially with the fragile social climate the country had been in since colonial days. Nothing has change. They want ti lend private sector money to build schools and have then charge poor people to send their kids to school. Then they come back and blame the country for the literacy rate.They are a bunch of criminals.That is what they are. They are koan sharks. They can't lend the country the monet but they can lend it to foreigners to sell it to the people at a profit. those schools should be well insured. They will need it.

[evanovitch]

Should JA restructure National Debt?

Civic group calls for the restructuring of national debt
Thursday, 23 July 2009
The group Jamaicans United for Sustainable Development has joined other groups giving cautious support to aspects of the Finance Minister's presentation in parliament when he announced that the government will be returning to a borrowing relationship with the International Monetary Fund, IMF.

But the group has offered some suggestions to the government on alternatives to improve Jamaica's position.

Among the suggestions from the Group, which is headed by Lecturer in the Department of Government at the University of the West Indies, Richard Crawford, is restructuring the country's debt.

The group suggested that an equivalent of the Paris Club called the Kingston Club initiative, meets with all local holders of government debt with a view to reducing interest rates on existing debt by 2%.

The group also called for the reduction of government agencies and companies and divesting government assets and for the relocation of government agencies to downtown Kingston.

According to the group, performance-based compensation for public sector workers must be implemented at all levels and where public sector agencies and companies are not performing there must be initiatives to replace non-performing managers.

And with the government acknowledging that its projections for tax collection is off target, the group says tax collection must be broadened by bringing more informal businesses into the tax net.