‘Liquidity support for region should top Trinidad agenda’

(Jamaica Gleaner) – Caribbean thinkers are agreeing that an immediate need to find liquidity to support Jamaica’s budget, as well as those of other islands in the region, should be the foremost issue on the agenda of Prime Minister Bruce Golding and other Caribbean Community (Caricom) leaders when they meet with United States President Barack Obama at the fifth Summit of the Americas in Trinidad next month.

The mix of thinkers, brought together by the recently launched Roxborough Institute at The Jamaica Pegasus hotel in New Kingston on Wednesday evening, said that, given the gloominess of the country’s economic outlook, some urgent support was needed to see the country through the next fiscal year.
According to the committee, Jamaica’s major sources of income are seeing decline, and bauxite, which has been the hardest hit, might not see two-thirds of its industry recovered.

The academics argued that the country needed money to finance its enormous deficits and, given its non-productivity and negative growth rate, it needed urgent assistance.

“It seems the first line of support we should be trying to pursue is to find sufficient liquidity support financing for the budget in the upcoming fiscal year,” said former Caricom secretary general, Sir Allister McIntyre said.

“Without that falling into place, we shall be in any number of difficulties, so I would have thought that is an immediate and that should be pursued in Port-of-Spain (Trinidad),” he said.

Professor at the New York City University, Don Robotham, said the anticipated seven per cent deficit needs to be confronted now.
“The other side of it has to do with garnering resources exter-nally. Right now, about eight per cent of our debt stock is financed by multilaterals. We cannot finance our debt on the private money market,” Robotham argued.
Modify loan conditions

“It doesn’t exist to take off Jamaican debt. So we are going to be compelled to do more for multilaterals whether we like it or not, and whether the PNP (People’s National Party) or the JLP (Jamaica Labour Party) like the IMF (International Monetary Fund) or not, that is where we are heading,” he added. Robotham said what the country needs to focus on is modifying the conditionalities attached to the loans it takes from multilaterals.
Financial analyst Keith Collister said the country needs to find its footing in the export market.
A gateway strategy, Collister posited, might be the country’s best way out of crisis.

“Taking advantage of Jamaica’s superior location, a gateway strategy should be carefully designed to integrate large-scale investment in the Far East by major Chinese and Singaporean and Indian investors, aimed at the US and Latin American market,” he said.

Collister added that a discussion also needs to be had on forming new industries, such as the provision of high-quality, low-cost health care to Americans.

“Last year, one hospital in Thailand had revenues of over US$600 million from 65,000 patients, over half of whom were Americans. One such hospital in Jamaica could replace the minimum likely damage to export earnings from the collapse of the bauxite industry,” he said.

However, president of the Caribbean Policy Research Institute (CaPRI), Dr John Rapley, cautioned the thinkers not to expect too much from the Obama administration.

“Let us not make the mistake of saying because we have a black man in the White House we are home free,” Rapley said. “In fact, in many ways we have done better in the region when we have a Republican administration, and I think it’s particularly complicated by the fact that there is a Democratic Congress which is more protectionist than the previous Congress,” he said.

Rapley said Caribbean leaders need to approach the US Congress with a clear plan on the issues on which it wants cooperation and support.

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