What's your plan?

[Marilyn]

Been reading some recent comments on here again....of course I don't want Jamaica "closed up" because I personally like to go there (yeah selfish I know), but my mother always said don't harp on a problem unless you have at least a suggestion of a solution or alternative.


So hypothetically, YOU have the power to totally get rid of the dreaded tourism, and the horrible tourist along with it....
what's your plan??

Hold on now, no theories like "Jamaica needs to develop a product it can export that will balance trades, and bring prosperity to the country"

You have to work with either what already exists, or what is humanly possible.

So if all of us wicked wicked people whose only intent when we come to Jamaica is to rack and ruin your nation would just keep the dirty dollars and stay away...what then???

Ansa that

This line of thinking reminds me of a scene from Gone With thE wIND WHEN ALL OF THE gung ho southerens ready for war at a dinner at Twelve Oaks got mad as hell when Rhett Butler pointed out all of the simple facts as to why the south would indeed loose the watt.



Another hilarious point is that the ones making the most noise are doing so from comfortable vantage points in the US and Canada and wouldn't go back to live in Jamaica if their lives depended on it. Hell, I have more friends from over here in the US going over there and building and staying for extended periods than folks on here.

[halfwaytree]

Re: What's your plan?

Until crime and corruption are addressed in Jamaica no one can make plans. When one is struggling for self preservation making plans is an afterthought.

So there is no plan. Jamaica is a rudderless ship drifting aimlessly towards becoming a failed state a la Haiti and Somalia.

I don't mean to sound so pessimistic but it is hard not to especially when you start to hear about things like kidnappings etc. on top of the brutality that we have grown accustomed to over the years.

[Dr.Dudd]

Re: What's your plan?

Jamaica is not rudderless. It Is perfectly under the control of those who make billions yes with a B and in US dollars too. They make billions off the high crime and murder rate. The most wealthy organizations in the country are the private security firms.
They also have members on the gun license commission.

They also influence the withholding of introduction of liberal license polity.
They have successfully fooled the majority.
They take advantage of the fact that most people even the well read do not really have the ability to analyse problems on their own.
So they come up with solutions that they know will never work and promote themn to the point where the majorioty of readers accept them.
So the crime problem in Jamaica Cannot be solved.
No country irrespective of how wealthy i sable to use a police department to eradicate high crime. I<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Curmudgeon_Milo</div><div class="ubbcode-body">Until crime and corruption are addressed in Jamaica no one can make plans. When one is struggling for self preservation making plans is an afterthought.

So there is no plan. Jamaica is a rudderless ship drifting aimlessly towards becoming a failed state a la Haiti and Somalia.

I don't mean to sound so pessimistic but it is hard not to especially when you start to hear about things like kidnappings etc. on top of the brutality that we have grown accustomed to over the years.


</div></div>

[Nanook]

Re: What's your plan?

Sadly, what Milo Man speaks of is why I have not returned for several years. I hesitated to post in this thread at the beginning, as I don't think that the issue is &quot;t<span style="font-style: italic">he dreaded tourism, and the horrible tourist along with it</span>&quot;....coming from an area where tourism is the number one industry I can fully understand some of the issues. One main issue is tourism cannot sustain an economy alone. There needs to be a staple, such as the previous aluminum and sugar cane exports etc...which sadly have not been a mainstay. Once again, the film &quot;Life &amp; debt&quot;. comes to mind.

Anyway, I no longer feel free to travel about the island in the style I grew accustomed to. Then I fell into a physical state whereas I am less able to protect myself. That was still OK though, as I had a protector. Well, my protector went missing and is presumed murdered over a year ago. If that man couldn't stay safe...a well respected and loved business man in a small community, of all people I knew...then nobody can!

The place is going to hell in a hand basket and it breaks my heart to watch. I still have friends there that I care for, and worry about how they will survive.

I watch from a distance though...as the violence continues. I watch with a tear in my eye over those helpless to do anything about it and with anger for those than can and choose to turn a blind eye.

[Wahalla]

Re: What's your plan?

The place has been going to hell in a hand basket as long as I can remember... But asking that those who live else weher as if it is an exclusionary policy not to comment removes the right of 99 % not to comment..

I tried to make life in Jamaica and failed.. Because of lack of education and opportunity.. I simply could not get my head in the game....Wrong colour wrong accent wrong connections.. and there are many like me who took the easy route out...literally...

I spent the last two hours discussing an economic prospect of a multibillion dollar project for a southern European country with the chief economist of a major European bank in another language. I did not realise but the CEO was listening in I did not know him. I say this not to boast but to point out that if a seacond grade Jamican idiot can run with the big dogs then there is a hell of alot of talent in Jamaica as there are smarter Jamaicans than me.. Alot of skills that are wasted... a lot of iniitative has been lost.. alot of talent is unrecognised and not rewarded.. For hell sake I could not get a job cutting cane in Jamaica, I did not qualify...

There is so much there in the above... Jamaicans dont buy into the system of goverment.. So they dont feel oblidged to contribute.. The goverment is seen as something to milk to exploit not to pay taxes into...

Two things the goverment runs based on internal loans and devaluation of the currency which gives high interst rates ....and taxes dont reflect the goods and services that are in Jamaica.. I dont mean the tourist sector which is artifical anyway... but Jamaicans...

Taxes and interest rates.. Lower but broader based taxes collected efficently.. and lowering of local interest rates will cure all Jamaican ills in a twenty year period.. simple but no one do this.. what does a matter is that little social / infra structure investment has been made in Jamaica in the last 30 years....

oh one other thing ignore all foreigners who preach salvation...We are tougher and smarter than them all

[Tuff Gong]

Re: What's your plan?


Any arguments/coversations/discussions about getting rid of tourism is closed minded and idiotic. I am betting US$100 that the same person(s) who are advocating that wants to get rid of Chinese Merchants, Paki In-Bond Merchants and the remnants of the 21 Families.

[Wahalla]

Re: What's your plan?

waht 21 families..As I said in my yout there were 10 families now there are 21 or 14 or 28.. family inflation going up in factors of 7!. Tourism should be part of the economic mix. It can suppliment the other sectors of the economy not dominate it...

I find the way tourism sucks capital investment hides the lack of investment in the rest of the country.. and the non tourist areas.. The social impact well I leave that to wiser heads...

[Marilyn]

Re: What's your plan?

Now that was some good dicussion, and took an angle I did not anticipate. Thank you.

[Wahalla]

Re: What's your plan?

go to any rum bar or high school common room and you will find a superior discussion... as well as a discussion on the malvado vs whoever feud..

[ILP]

Re: What's your plan?

These kind of conversations gives me headaches, but I had to share this. I was watching the end of <span style="font-style: italic">Meet the Press</span> this morning and one of the speakers (some reporter lady) was commenting on the joblessness in the US. She said something that while so simple is the most common sensical (&lt;--my made up word that) thing I've heard in a while. She was asked to comment on the US gov'ts plan to address the jobless rates by &quot;retraining&quot; workers to do future jobs. Her response was that a govt must have an industry in place <span style="text-decoration: underline">first</span> so that a worker can be retrained. She said that it cant be one major industry, it had to be multi-layered, as was demonstrated by the failing auto-industry and the loss of manufacturing jobs in the midwest. Industry's that have all but collapsed (for a myriad of reasons). She also mentioned that the US had to be prepared that many of the unemployed workers will never be retrained and will most likely remain jobess. What kinda of social ramifications will that have? That is another discussion all together, but she hinted to it briefly by saying rise in crime, decreased tax collection, population flight, talent drain. Mmm...sound like any countries we know?

It got me to thinking about Jamaica, whose primary industry is tourism. Do I think that Jamaica should get rid of tourists/tourism? No, but tourism <span style="text-decoration: underline">should not</span> be its primary source of income. Compared to other islands Jamaica will soon price itself out of the market in that area anyway. Plus, the jobs that Jamaicans are getting in the industry for the most part cant even buy a patty these days let alone take care of a family. Any person that argues that Jamaica (and I mean it citizens) is getting a net benifit from the tourism industry is deluding themselves.

Thanks for listening. I am sure smaddy will be along soon fi call me eediat. They might be right, what do I know.

[evanovitch]

Re: What's your plan?

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Another hilarious point is that the ones making the most noise are doing so from comfortable vantage points in the US and Canada and wouldn't go back to live in Jamaica if their lives depended on it. Hell, I have more friends from over here in the US going over there and building and staying for extended periods than folks on here.</div></div>

now this is truly hilarious....the assumption that the little bit ur friends contribute matter r even make an impact on the wellbeing of the Jcan economy....

not to mention the presumptuousness of y Jcans migrate...after all we know that African Americans have never migrated from <span style="font-style: italic">their paradise that is the USA</span>, first world ameneties and rights as it has ALWAYS afforded them and heck, forgive yaad fi giving dem Marcus who showed dat not all black man felt being black was a curse,...

and all the brain power the migrated Jcans have brought to the USA n the bizniz acumen an ingenuity of even the likkle man...afta all, if we neva badda dan bad, all would not be seeking their comfort zone away from dem fuss worl country

but hey, the 1.5million of us who pay taxes here, contribute here, have built up from scratch <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> comfortable vantage points </div></div> and still find heavy remittance to send bak home surely dont measure up to some holiday spending an a likkle set up here n dere


wid Permission ILP <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Thanks for listening. I am sure smaddy will be along soon fi call me eediat. They might be right, what do I know.</div></div>

[Tuff Gong]

Re: What's your plan?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: ILP_N_Belly</div><div class="ubbcode-body">It got me to thinking about Jamaica, whose primary industry is tourism. Do I think that Jamaica should get rid of tourists/tourism? No, but tourism should not be its primary source of income </div></div>

The question is when did Tourism become the one industry?
Not the 40s, not the 50s, not the 60s, started in the 70s when the Government wrecked the economy.
In the 80s hundreds of factories were built then closed again in the late 90s.

Tourism was more of a survivour because some out in all the prostituting and destruction of the Jamaican Economy by corrupt Governments the stupid mainly North American Tourists kept coming.

I want to folks who want the the tourism sector closed down to explain what would Jamaica look like if the tourist industry had not outlasted almost every other industry in Jamaica?

[evanovitch]

Re: What's your plan?

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">I want to folks who want the the tourism sector closed down to explain what would Jamaica look like if the tourist industry had not outlasted almost every other industry in Jamaica? </div></div>

u know, i been awn yah fi years n cant memba anyone saying tourism fi lock dung...wat i have read is the questioning of the contribution it makes to the economy and society on a whole as opposed to the allocation of scarce commodities that it gets....the cost of the breakdown of the island, across the board as opposed to the longterm contributions it has made
...the priority anyting n everyting associated wid it in the mind of our govament at the expense of the welfare of the many...

how long will the imbalance continue even as we achieve less n less from it, as we sell more an more of the tangible that makes tourism possible

[Tuff Gong]

Re: What's your plan?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: evanovitch</div><div class="ubbcode-body"> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">I want to folks who want the the tourism sector closed down to explain what would Jamaica look like if the tourist industry had not outlasted almost every other industry in Jamaica? </div></div>

u know, i been awn yah fi years n cant memba anyone saying tourism fi lock dung...wat i have read is the questioning of the contribution it makes to the economy and society on a whole as opposed to the allocation of scarce commodities that it gets....the cost of the breakdown of the island, across the board as opposed to the longterm contributions it has made
...the priority anyting n everyting associated wid it in the mind of our govament at the expense of the welfare of the many...

how long will the imbalance continue even as we achieve less n less from it, as we sell more an more of the tangible that makes tourism possible </div></div>

I have seen where folks claim they want the industry locked down, not once but hundreds of times.
As for misallocation. Of course funds are misallocated but that is the work of corrupt, inept governments that in face of the destruction of the economy cannot find anything else to Pimp but tourism. In so doing they open themselves to any kind of idiotic advice and schemes.

I say tax it fairly and remove all the extra money spent to promote it over other ventures. The GOJ needs to get completely out day to day involvement of business and just relegate itself to a supervisory role.

[evanovitch]

for TG: When politics trumps economics

When politics trumps economics
Published: Sunday | December 27, 2009



Peter-John Gordon, Contributor
Professor David Wong, in an article carried in The Sunday Gleaner of December 20, entitled 'A fairy-tale view of interest rates', which was in response to an earlier article by me ('Debating interest rates', December 6), suggested that the Government could use its influence to determine interest rates. He claimed that my &quot;simplistic view&quot; of interest-rate formation was not informed by the structure of the market for loanable funds in Jamaica.

My analysis did implicitly take account of the structure of the loanable-funds market in Jamaica. I did not assume a perfectly competitive market where no player would be able to affect the price/quantity combination which would prevail. I did state that the Government was a large enough player to determine which one of the given price/quantity combinations would prevail at the time it seeks to borrow. The crux of my argument was, however, that the Government is not in a position to determine the set of price/ quantity combinations from which it must choose i.e., it cannot by itself simply determine that it is going to borrow a large sum of money at a low interest rate.

Whether the Government has some monopsony power (i.e., the ability of the buyer to determine the price) or not, does not change the essence of my argument, because the Government does not have complete monopsony power. My argument is that there is some reservation rate below which people will not be willing to lend to the Government the amount of money which it would like to borrow. How that rate is determined will of course be a function of the alternatives available to people who have money to lend. In a perfectly competitive market, the quantity-price combinations at which people are willing to lend is nicely define; in a monopsony situation it is more problematic, but reservation levels do exist.

Monopolist example

Readers are more familiar with monopolies than they are with monopsonies, so I will use an example with a monopolist to demonstrate that a sole seller is not in a position to determine the price-quantity combination all by himself.

There is one supplier of electricity to consumers in Jamaica (a monopolist), and most people would consider electricity a necessity. However, as the price of electricity rises, people are willing to buy less, and in fact, there are prices above which individuals will stop buying. The electricity company cannot by itself determine the price of electricity and the amount sold. Obviously, the income of the consumer is a major factor in determining how much he will buy at various prices; but equally important are the alternatives available to him.

In Jamaica, as the price of electricity rises, people with electric stoves will shift to gas or some other source of energy for cooking; they will seek light bulbs, which use less electricity, etc. All of these are mechanisms for consuming less electricity as prices rise until the ultimate price is reached where no electricity is consumed at all. Equally so, if there is a sole buyer, he cannot all by himself determine how much is to be traded, and at what price.

Wong wants to use more advanced economics textbooks to examine the loanable-funds market in Jamaica. In particular, he wants to model this market in game-theoretic terms as a bargaining game. Let me briefly but succinctly use the bargaining framework to demonstrate that the results from my earlier article hold.

Access to international private-capital markets

The Government of Jamaica at this time does not have access to the international private-capital markets. People in Jamaica who have money to lend, however, do have access to this market, i.e., they can buy US treasury bills, buy stocks and shares on foreign stock markets, put their holdings in foreign bank accounts, etc. The Jamaican Government is locked out of the international capital market, while Jamaican lenders have access.

From a bargaining perspective, Jamaican lenders have more options than does the Jamaican Government. It is well known that in any bargaining situation, the party with more options has the upper hand, since it is less costly to him if that deal is not consummated. This means that the hand of the lenders in Jamaica today, in any bargaining game with the Jamaican Government, is stronger than the hand of the Government.

The approach by the Government to the International Monetary Fund (IMF) for a loan, born out of necessity, is an attempt to strengthen its hand in bargaining with creditors. With loans from multilateral institutions, the Jamaican Government will need less private credit. The scarcity premium, which private creditors are able to extract, would, therefore, be reduced. The IMF and other multilateral institutions will not finance budget deficits year after year, therefore, the Government has to reduce its desire for borrowing if future rounds of bargaining are to result in lower interest rates, i.e., the Government must either cut expenditure and/or increase taxes if interest rates are to fall.

I had raised the issue in my previous article of what determines the interest rate that people are willing to accept. This is a legitimate question whether we are dealing with a few players or many players. People always act in their self-interest. It is naïve to think that there can be some sort of social partnership where people voluntarily decide to put the good of society before themselves. Unfortunately, in Jamaica, we have sought to substitute politics for economics. In the game-theoretic language which Wong would use, we have sought to turn a non-cooperative game, i.e. one in which people are motivated by their own interest, into a cooperative one, where the welfare of the group is given precedence over individuals via a social contract. If this is possible, I would say let us throw religion in while we are forging this new way of behaving.

The best that people can do for themselves is a function of the alternatives open to them. People will accept a low interest rate if that is the best that they can do. The best that they can do takes account of all the possibilities open to them, holding their wealth in financial assets, as well as non-financial assets. If the interest rates on offer are insufficient to maintain the real value of an individual's wealth, that individual will move his wealth out of financial assets into physical assets such as commodities, real estate, gold, etc.

Jamaica is an open society, which means that a part of the set of options open to Jamaicans is investing abroad. The average annual inflation rates between 2000-2008 in the USA and the United Kingdom were 2.83 per cent and 2.94 per cent, respectively. In Jamaica, it was 11.46 per cent. During this period, the lowest inflation rates experienced by the USA and the UK were 1.58 per cent and 1.67 per cent, respectively, both in 2002.

Variations in rates

The highest rates were 3.84 per cent and 3.97 per cent, respectively, in 2008. In Jamaica, the lowest inflation rate during the same period was 5.7 per cent in 2006 and the highest, 16.8 per cent in 2007 and 2008. The average inflation rates in the USA and the UK are much lower than in Jamaica. Also, variations in these countries are in a much narrower band. Volatility adds to the uncertainty of what future inflation will be.

In 2005, the inflation rate in Jamaica was 12.6 per cent. The following year it was 5.7 per cent, and then it shot up to 16.8 per cent in 2007. If a person had kept his wealth in Jamaican dollars under his mattress from 2000-2008, he would have lost almost 12 per cent of the value of that wealth each year, or approximately 64 per cent over the entire period, because of inflation.

If that person had converted that wealth to US dollars or English pounds, and placed that money under his mattress, his loss would have been less than three per cent of its value each year, or less than 21 per cent over the entire period, due to inflation. It takes a much smaller interest rate on US dollars or English pounds to preserve the value of one's wealth than would be required for Jamaican dollar assets.

In addition, the volatility of the Jamaican inflation rate increases the uncertainty involved, thus forcing a premium on the Jamaican dollar interest rate, which would be required for people to continue holding their assets in Jamaican dollars. So it is not true to suggest that the international interest rates are the lower limits of what people in Jamaica will accept. Recall also that the options open to people include non-financial assets. A person buying a lot of land is likely to be protected from inflation because the price of this lot of land will rise in tandem with inflation.

Empirical evidence

Wong has stated that Edward Seaga might have a better understanding of the matters of interest rates than I do. This may, in fact, be true. But I dare say, it could not be for the reasons which Wong has posited. The central bank and the Ministry of Finance cannot jawbone any interest rate which they would like. The empirical evidence is there to support the conclusion that the central bank and the Ministry of Finance are not able to set whatever interest rate they wish and at the same time attract the amount of loanable funds they want. Both institutions have in the past failed to attract the amount of loanable funds with the interest rates they have offered, no doubt with much behind-the-scenes cajoling.

The balance sheet of the Bank of Jamaica (BOJ) in November 2009 revealed it had lent $3 billion to the Ministry of Finance. The governor is quoted in a newspaper article as saying that the BOJ had also lent the Government money earlier this year and late last year. No doubt this became necessary as a result of the failure on the part of the Ministry of Finance to attract the quantum of loans which it desired at the interest rates offered. The implication of the central bank's accommodation of the Treasury's inability to raise funds on the market is an interesting topic best handled on its own.

Peter-John Gordon is a fellow at the Sir Arthur Lewis Institute for Social and Economic Studies, UWI, Mona. Feedback may be sent to [email protected].