Minister of Finance and the Public Service, Audley Shaw'. - file
Finance Minister Audley Shaw must tell the country tomorrow in clear, unambiguous language, where the country's economic ship is heading.
We don't want to hear about the Government fulfilling its promise to deliver tuition-free education up to the secondary level or free health care.
Several commentators and economic analysts have begun expressing fear that the wheels are falling off the local economy and Mr Shaw needs to show the country that he is in charge.
Inflation is heading skyward and the economic fallout in the United States could have serious consequences for Jamaica, particularly if the US economy contracts further. There's every indication that it will get worse in the US before it gets better.
Shaw's $489-billion budget was predicated on an inflation rate of from eight to nine per cent and an exchange rate of US$65 to J$1. The budget has been busted and now that the vice grip is tightening on the country's coffers, the chief treasurer needs to show leadership. Shaw has been rather unconvincing in telling Jamaicans that the country will not catch pneumonia from the US cold.
Blamed the Bank
The finance minister has failed to show leadership for two consecutive weeks in the House. First, he blamed the Bank of Jamaica for being 'overly optimistic' when it forecast that inflation would end the fiscal year at maximum nine per cent, even though he was warned that it would be in high double digits.
"To put it mildly, they (BOJ) were somewhat over ambitious," Shaw told the House two weeks ago.
This is not a matter for which Shaw needed to blame anyone but, as poor leaders often do, he passed the buck.
Despite the job losses in the United States, the learned Shaw stood up in the House and encouraged the country to sit tight. Remittances would continue to flow and tourist dollars would still be coming as they have done before, Shaw said with a grin.
Right!
The Gleaner reported last week the difficulties Jamaicans living abroad are facing as a result of the US meltdown. Audrey Wilson, who owns a mortgage brokerage business and is a licensed real estate dealer, said she is no longer able to send US$400 every two weeks to her mother. Now, she says that she is able to send home only $55.
Perhaps, for Shaw, there are only a few persons in Wilson's position. Today is yet another opportunity for Shaw to prove that he is not worse than John McCain, who believes the "fundamentals" of the US economy remain strong, even while US jobs are sliding into the abyss faster than the West Indies batting line-up.
Crashes
The job losses in the United States are not the only factor threatening remittances. Many Jamaicans living abroad have lost money due to the crash of Cash Plus, Olint and other unregulated investment schemes. Many persons had taken out second mortgages on their homes in the United States and invested in these alternative investment schemes locally. Now that they have folded, many Jamaican migrants overseas are handicapped and less money will be coming home.
Shaw himself has admitted that "we are in uncharted waters." All we ask from him now is a clear and believable signal as to how he intends to navigate this ship called Jamaica.
Portia needs to respect her colleagues
Opposition Leader Portia Simpson Miller, now with full control of the People's National Party, needs to make punctuality a part of the party's progressive agenda. It has never been fashionable for Simpson Miller to be early for sittings of the House of Representatives, but it is time she felt compelled to show respect for her colleagues who usually make the effort to be on time.
We also encourage Simpson Miller to whisper a quiet word in the ear of seasoned parliamentarian Robert Pickersgill and her Jamaica Labour Party counterpart Olivia Grange, who seem not to remember that the sittings of the House of Representatives start at 2 p.m.
Opposition Leader Portia Simpson Miller.
Information the finance
minister may not have:
Job cuts in the United States (US) in September were 33 per cent more than a year ago.
More than 760,000 jobs have been lost in the US this year.
Employers in the US cut their payrolls by 159,000 in September, the biggest job cuts since March 2003. Manufacturers cut 51,000 jobs, construction companies axed 35,000 jobs, retailers got rid of 40,000 positions, business services shed 27,000 and financial services slashed 17,000 positions. Leisure and hospitality companies also reduced employment by 17,000.
Jamaica's inflation rate for January 1, 2008 to August 31, 2008 was 16.1 per cent. This is 8.9 percentage points above the 7.2 per cent recorded over the corresponding period last year.
Inflation for the fiscal year April 1, 2008 to August 31, 2008, stands at 10.3 per cent.
Inflation for the period August 2007 to August 2008 was 26.5 per cent
The Bank of Jamaica's (BOJ) initial inflation projection for the 2008-2009 fiscal year was between eight and nine per cent.
The BOJ's revised inflation target for the fiscal year is now between 15 and 17 per cent.
BOJ initial growth projection for the country was in the 2.5 to 3.5 per cent range.
Revised GDP growth projections are now within the range of 1.2 to 2.2 per cent.
