Economy on autopilot
IN REFERENCE to your article posted August 3, 2018, and titled ‘Gov’t says no to removing tax on fuel’, I would like to respond to our minister of finance.
The minister of finance is clearly only highlighting the level of desperation the GOJ is in – he must be sweating profusely. Growth promised and unachieved seems to be eclipsing the Government by a good distance if they are unable to even consider protecting Jamaicans and Jamaican companies from the global fluctuations in oil prices given the delicate conjunction we are currently at in our economy.
On one hand, we are trying to get rid of debt, and on the other we are trying to stimulate the economy to grow. Perhaps, only one is possible for the Government given its utterances and policy decisions.
The minister highlighted the NIR positions as a buffer against “oil, among other things”, but how much can we really use NIR to buffer millions of barrels of oil Jamaica imports should the trend continue?
Oil prices saw an unprecedented increase from US$25 per barrel in 2000 to approximately $100-plus between 2012 and 2013. Thereafter, oil prices trended down. Taking out an insurance policy in the form of a hedge fund during the global upheaval of oil prices seems to be strategic in protecting the productive sector from these external shocks.
A DISSERVICE TO JAMAICANS
The previous government initiated such measures but failed on several fronts, as highlighted by the minister. In fact, both governments have done Jamaicans a disservice by continuing to collect specific SCT on petrol with hidden agendas.
Oil prices did fall significantly soon after the SCT on petrol came into effect. The previous government smartly channelled that money elsewhere.
Despite the prevailing global uncertainty that might create another upheaval in oil prices, the minister seems to be beaming confidence in the net reserves to withstand external shocks – rather incautious given climate changes and the level of uncertainty with US trade policies.
The finance minister must further explain the terms of the hedge contracts despite not being triggered. Did we lose all or some of this money invested under the PNP administration? He owes that to us, for clarity.
How highly counterproductive it is to be spending big on social programmes and at the same time stifling growth in the economy by refusing to consider stepping in to contain the cost of fuel for electricity and transportation, which plays a critical role economic growth.
Finally, the Government of Jamaica is failing miserably in finding creative ways to stimulate growth, and this seems yet another imperious stance taken by them that is ultimately hurting us all in an effort to pay off our debts.
I beg the PM to listen more to the people – especially young people like myself who are trying hard to make this country a place to pursue our dreams – and create more space for businesses to grow, especially innovations.
We are still awaiting policy decisions by your Economic Growth Council that is currently acting on behalf of the GOJ on several fronts if you’re not willing to consider containing the cost of fuel.
On one hand, we are trying to get rid of debt, and on the other we are trying to stimulate the economy to grow. Perhaps, only one is possible for the Government given its utterances and policy decisions.