Re­think Ja­maica’s ac­count­ing par­a­digm

Jamaica Gleaner - - OPINION & COMMENTARY -

THE ED­I­TOR, Sir: THE TAR­GET­ING of growth by the Eco­nomic Growth Coun­cil should be based, in prin­ci­ple, on some knowl­edge of the re­la­tion­ship be­tween cap­i­tal in­vest­ment and out­put (gross do­mes­tic prod­uct) growth in Ja­maica. But there are no es­ti­mates of cap­i­tal in­vest­ment in the cur­rent set of na­tional in­come statis­tics. This lack of data could be a draw­back to the work of the coun­cil.

This sit­u­a­tion ex­ists be­cause the Sta­tis­ti­cal In­sti­tute of Ja­maica com­piles only one of the three main na­tional ac­counts that are rec­om­mended by the United Na­tions. This ac­count is con­sid­ered to be the most im­por­tant of the three be­cause of its fo­cus on es­ti­mat­ing out­put growth in the econ­omy. But the other two ac­counts are also very im­por­tant. The data they pro­vide are es­sen­tial for plan­ning and for iden­ti­fy­ing pat­terns of in­come dis­tri­bu­tion, in­clud­ing the size of the in­for­mal sec­tor.

The re­cently es­tab­lished Eco­nomic Growth Coun­cil will need a wide range of eco­nomic statis­tics. It is, there­fore, time to com­pile the three main ac­counts in the sys­tem of na­tional ac­counts to meet this de­mand.

This work will in­evitably take some time to be com­pleted, and it may re­quire a sub­stan­tial in­crease in fi­nan­cial and other re­sources. For­eign ex­per­tise will also be needed. Norwegian na­tional in­come statis­ti­cians are among the best in the world, and they should be asked to as­sist with this project.

A fully ar­tic­u­lated na­tional ac­count­ing sys­tem (in­cor­po­rat­ing the three main na­tional ac­counts) is prob­a­bly the most ba­sic tool of eco­nomic man­age­ment in many coun­tries, de­vel­oped as well as de­vel­op­ing. Ja­maica needs such a sys­tem of ac­counts to pro­vide data on the ba­sis of which re­li­able plans can be for­mu­lated to pro­mote growth and de­vel­op­ment of the coun­try. E.A. SHAW Econ­o­mist

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