Dear Editor,
Kindly allow me some space in your paper to ask a question and make some suggestions. The question as strange as it may sound is why does Jamaica need the IMF?
Certainly the Balance of Payments (BoP) is determined by importers of foreign goods and the credit period that they are afforded by exporters at foreign ports. In essence, if every foreign exporter required payment up front, then the country could never have a BoP that exceeds zero and in fact we would have a positive BoP, as goods would be paid for beforehand and we would be awaiting shipments intransit.
So let us dismiss the BoP as any reason for the IMF, with the only variant being if the Government imported goods, and this we know is not entirely the case, not even in the case of Petrojam, which routinely makes a profit; and oil being the major import for Jamaica.
The same would apply for rice, where private or semi-private entities must fund their purchases. So why then does the Government need IMF support? Could it be that the Government cannot afford to spend however much it normally spends on infrastructural projects, salaries, motor vehicles for ministers, etc? The easy remedy for such a condition is to print money and pay the bills. The problem could not be that simple. The other option is that the Government is borrowing foreign exchange to sell to local suppliers, the Petrojams, the rice and flour mills, the motor vehicle inducstry, etc. If this final suggestion is the truth, then it implies an imbalance between the demand and the supply of foreign exchange. This problem can be aleviated by the Jamaican population by simply demanding less foreign goods.
The same would apply for rice, where private or semi-private entities must fund their purchases. So why then does the Government need IMF support? Could it be that the Government cannot afford to spend however much it normally spends on infrastructural projects, salaries, motor vehicles for ministers, etc? The easy remedy for such a condition is to print money and pay the bills. The problem could not be that simple. The other option is that the Government is borrowing foreign exchange to sell to local suppliers, the Petrojams, the rice and flour mills, the motor vehicle inducstry, etc. If this final suggestion is the truth, then it implies an imbalance between the demand and the supply of foreign exchange. This problem can be aleviated by the Jamaican population by simply demanding less foreign goods.
If foreign powers cannot supply goods for Jamaican dollars then Jamaica should produce a viable substitute where possible. As an example, bananas, cassava, yams and peas all make reasonable and tasty flour variations. The government can ensure that if you want wheat flour, you pay more. Crude oil is a necessary import, but manufacturing does not constitute the greatest consumption; it is only reasonable to expect the Government to offset imports by various methods.
In the first instance, special permission and an additional tax to import any gas guzzler (motor vehicle with fuel consumption under 25mp/g or 11km/l) should be implemented. Further, an education programme on why we should buy Jamaican. If a Rastaman makes a broom and that broom cannot be sold for less than an imported plastic broom it forces the Rasta to abandon broom making; not necessarily for a more meaningful and productive activity but perhaps to look at gas guzzlers driving by and wonder why Rasta life suh hard.
In addition to the Government, we must all look inside and determine the way forward. We will either buy local and encourage the exchange rate to remain where the country can afford to purchase the necessary foreign goods; buy foreign and promote a higher foreign exchange rate driven by the local demand for foreign goods or we can simply sell more goods and services for foreign dollars. The doctor understands this and should make public education a part of his mandate on resolving our challenges. Simply saying Buy Jamaican - Build Jamaica is not enough. Many Jamaicans do not understand the repercussions of buying foreign.
Robert Howell
roberthowelljm@yahoo.com
Do we really need the IMF?
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Kindly allow me some space in your paper to ask a question and make some suggestions. The question as strange as it may sound is why does Jamaica need the IMF?
Certainly the Balance of Payments (BoP) is determined by importers of foreign goods and the credit period that they are afforded by exporters at foreign ports. In essence, if every foreign exporter required payment up front, then the country could never have a BoP that exceeds zero and in fact we would have a positive BoP, as goods would be paid for beforehand and we would be awaiting shipments intransit.
So let us dismiss the BoP as any reason for the IMF, with the only variant being if the Government imported goods, and this we know is not entirely the case, not even in the case of Petrojam, which routinely makes a profit; and oil being the major import for Jamaica.
The same would apply for rice, where private or semi-private entities must fund their purchases. So why then does the Government need IMF support? Could it be that the Government cannot afford to spend however much it normally spends on infrastructural projects, salaries, motor vehicles for ministers, etc? The easy remedy for such a condition is to print money and pay the bills. The problem could not be that simple. The other option is that the Government is borrowing foreign exchange to sell to local suppliers, the Petrojams, the rice and flour mills, the motor vehicle inducstry, etc. If this final suggestion is the truth, then it implies an imbalance between the demand and the supply of foreign exchange. This problem can be aleviated by the Jamaican population by simply demanding less foreign goods.
The same would apply for rice, where private or semi-private entities must fund their purchases. So why then does the Government need IMF support? Could it be that the Government cannot afford to spend however much it normally spends on infrastructural projects, salaries, motor vehicles for ministers, etc? The easy remedy for such a condition is to print money and pay the bills. The problem could not be that simple. The other option is that the Government is borrowing foreign exchange to sell to local suppliers, the Petrojams, the rice and flour mills, the motor vehicle inducstry, etc. If this final suggestion is the truth, then it implies an imbalance between the demand and the supply of foreign exchange. This problem can be aleviated by the Jamaican population by simply demanding less foreign goods.
If foreign powers cannot supply goods for Jamaican dollars then Jamaica should produce a viable substitute where possible. As an example, bananas, cassava, yams and peas all make reasonable and tasty flour variations. The government can ensure that if you want wheat flour, you pay more. Crude oil is a necessary import, but manufacturing does not constitute the greatest consumption; it is only reasonable to expect the Government to offset imports by various methods.
In the first instance, special permission and an additional tax to import any gas guzzler (motor vehicle with fuel consumption under 25mp/g or 11km/l) should be implemented. Further, an education programme on why we should buy Jamaican. If a Rastaman makes a broom and that broom cannot be sold for less than an imported plastic broom it forces the Rasta to abandon broom making; not necessarily for a more meaningful and productive activity but perhaps to look at gas guzzlers driving by and wonder why Rasta life suh hard.
In addition to the Government, we must all look inside and determine the way forward. We will either buy local and encourage the exchange rate to remain where the country can afford to purchase the necessary foreign goods; buy foreign and promote a higher foreign exchange rate driven by the local demand for foreign goods or we can simply sell more goods and services for foreign dollars. The doctor understands this and should make public education a part of his mandate on resolving our challenges. Simply saying Buy Jamaican - Build Jamaica is not enough. Many Jamaicans do not understand the repercussions of buying foreign.
Robert Howell
roberthowelljm@yahoo.com
Do we really need the IMF?
-->