Our Financial Challenges – Good News/Bad News

The uncertainty in the worldwide financial markets has caused a lot of arguments about the effects that it will have on Jamaica and how bad it will be.  Well as with all situations there is bad news and good news.

The bad news is that the devaluation of the Jamaican dollar will add inflationary pressures to the economy with imports being more expensive.

The good news is that our exports and local produce should become more competitive and may discourage us from buying these foreign imports.

The bad news is that the fall off in revenues from bauxite and tourism will put additional pressure on the dollar.  The good news is that the fall in oil prices has significantly reduced our need for foreign currency.

The bad news is that the worldwide recession has reduced the demand and the price for alumina.  The good news is that the low price will ultimately lead to an increase in demand for alumina.

The bad news is that remittances from abroad are expected to decline next year.  The good news is that it may encourage those who won’t work but choose instead to live off remittances to seek out work.  I believe that the sending of remittances has encouraged some persons not to work but to live off what they receive.  As a result many persons believe that they should get something for nothing and often end up in lives of crime because they do not understand the importance of working for your money.

The bad news is that tourist arrivals are expected to fall off sharply in the new year.  The good news is that it will force the hotel industry to clean up its’ act.   For too long there has been a need to diversify from where our tourists come as we rely too heavily on the U.S. market.  Secondly, it will encourage the hotels to cut out the waste and to become more efficient.  Hotels waste too much money on electricity, food and alcohol and need to rethink their operations.

The challenge for the government is to look beyond the bad times and to focus your efforts on how to prepare the country to take advantage of the coming good times.  For many years we have operated without an effective long term plan for the country, in these difficult times it is even more critical to plan for the future.

Feedback Question:  Is the government being too optimistic about the financial challenges ahead for Jamaica?

Tags: budget, dollar, economic, economy, exchange, foreign, jamaica, minister, ministry, recession, tourists, U.S.