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More crises for JA
Thursday, 19 November 2009
A strong warning has been issued that the Bruce Golding administration <span style="font-weight: bold">has run out of options in sustaining its $1.3 trillion debt </span>and is now facing the harsh reality that it will have to renegotiate with its creditors.
At least one financial analyst believes Wednesday's downgrade of Jamaica's credit rating by Moody's Investors Services should serve as a wake up call for the Government that the time has come for speedy action.
Moody's, which raised the red flag regarding Jamaica's ballooning debt, adjusted the country's credit rating from B to C-A-A-1.
There has been no official response from Finance Minister Audley Shaw on the downgrade.
Untenable situation
Ann Shirley.But Anne Shirley, Financial Analyst, says the Government is now in dangerous waters by trying to keep up with its debt servicing obligations against the background of rapidly declining revenue.
According to Miss Shirley, the situation is untenable.
"There is no capital market that you're going to go to, even if people look at you and say the international market doesn't matter to us, the problem is if you're sitting down and your revenues gets less every single month, there has to be a plan for how you're going to turn the economy around. What everyone is saying is that the options for doing this are getting very, very tight and it's time now for the (Government) to see it.
"The Prime Minister cannot come forward anymore and talk to us about debates ... who wants a debate now? We want to know how we're going to make it through the next few years," said Miss Shirley.
All hands on deck
<span style="font-weight: bold">She added that for too long persons in authority have been burying their heads in the sand instead of acting decisively in tackling the country's debt crisis.</span>
"(Jamaica's record of never defaulting or restructuring a debt) is a record that we'll stand very proudly for but there's a point at which you can't keep paying out every single cent you have until you can't pay the light bill. At some stage, we need to look at this thing carefully.
<span style="font-weight: bold">"No matter on which side you stand, all hands must now be deck to sit at a table and use our technical capabilities to address this problem</span>," said Miss Shirley Wednesday afternoon on RJR's daily current affairs programme Beyond the Headlines.
She added that local financial institutions should be particularly concerned about Jamaica's deepening debt crisis.
<span style="font-weight: bold">According to Miss Shirley, with financial entities being the biggest holders of Government of Jamaica debt instruments, they will be the most affected by any restructuring plan arrived at with the country's creditors.</span>
"It is a delicate matter that is going to have to be carefully looked at."
Thursday, 19 November 2009
A strong warning has been issued that the Bruce Golding administration <span style="font-weight: bold">has run out of options in sustaining its $1.3 trillion debt </span>and is now facing the harsh reality that it will have to renegotiate with its creditors.
At least one financial analyst believes Wednesday's downgrade of Jamaica's credit rating by Moody's Investors Services should serve as a wake up call for the Government that the time has come for speedy action.
Moody's, which raised the red flag regarding Jamaica's ballooning debt, adjusted the country's credit rating from B to C-A-A-1.
There has been no official response from Finance Minister Audley Shaw on the downgrade.
Untenable situation
Ann Shirley.But Anne Shirley, Financial Analyst, says the Government is now in dangerous waters by trying to keep up with its debt servicing obligations against the background of rapidly declining revenue.
According to Miss Shirley, the situation is untenable.
"There is no capital market that you're going to go to, even if people look at you and say the international market doesn't matter to us, the problem is if you're sitting down and your revenues gets less every single month, there has to be a plan for how you're going to turn the economy around. What everyone is saying is that the options for doing this are getting very, very tight and it's time now for the (Government) to see it.
"The Prime Minister cannot come forward anymore and talk to us about debates ... who wants a debate now? We want to know how we're going to make it through the next few years," said Miss Shirley.
All hands on deck
<span style="font-weight: bold">She added that for too long persons in authority have been burying their heads in the sand instead of acting decisively in tackling the country's debt crisis.</span>
"(Jamaica's record of never defaulting or restructuring a debt) is a record that we'll stand very proudly for but there's a point at which you can't keep paying out every single cent you have until you can't pay the light bill. At some stage, we need to look at this thing carefully.
<span style="font-weight: bold">"No matter on which side you stand, all hands must now be deck to sit at a table and use our technical capabilities to address this problem</span>," said Miss Shirley Wednesday afternoon on RJR's daily current affairs programme Beyond the Headlines.
She added that local financial institutions should be particularly concerned about Jamaica's deepening debt crisis.
<span style="font-weight: bold">According to Miss Shirley, with financial entities being the biggest holders of Government of Jamaica debt instruments, they will be the most affected by any restructuring plan arrived at with the country's creditors.</span>
"It is a delicate matter that is going to have to be carefully looked at."
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