Davies
FINANCE and Planning Minister, Dr. Omar Davies, has said Jamaica's economic outlook for 2001 is positive, despite the challenges ahead.
He pointed out that inflation was under control and several sectors of the economy were pointed for "substantial" growth.
The Minister was speaking last week at the annual retreat of the Executives of the Export-
Import Bank (Ex-Im) at the Grand Lido Braco Resort in Trelawny.
"In looking at this year, there are several very positive signs," Dr. Davies, said, noting that "there is going to be additional economic activity".
He drew attention to the fact that the bauxite/alumina sector was expanding, and that the Gramercy plant in Louisiana was back in operation. Gramercy, the biggest export market for Jamaica's bauxite, was closed for months because of an explosion which caused extensive damage to the plant.
Dr. Davies told the gathering that the biggest challenges for the Government this year, were to return interest rates to its downward trend and for the Ministry of Finance to assume the debt from the Financial Sector Adjustment Company Limited (FINSAC).
"Up until September, we were well on target in terms of the downward target in interest rates, but in September/October, problems arose which could not be solved by selling additional resources into the foreign exchange market," he said.
Dr. Davies noted that it was "a tough decision", to use the higher interest rates to stabilise the market, but the "negatives were less than the negatives, in terms of an exchange rate slide".
The Finance and Planning Minister stressed that if inflation had started to spiral out of control, the country would have lost all the benefits it had gained. He added that inflation control was a major plank of the Government's economic policy and had helped greatly in smoothing out labour relations.
Dr. Davies told the gathering that there were two areas where adjustments were needed and "we have held back". These included the pricing of public transportation and energy, the Minister said.
He argued that the Government had kept bus fares low, but noted that the transportation market had changed, as individuals were now prepared to pay far more than the current bus fares for the convenience of taxis.
"There has to be an adjustment in bus fares," he said.
