Credit Rating

Well, the latest piece of bad news is in, Jamaica’s credit rating has been downgraded to CCC+ by Standard and Poors.  This should not come as a surprise to anyone because our financial situation is dire.  It should also not surprise us that it has come at this time because after taking a beating for overvaluing the mortgage backed securities and other dubious investments, the climate in the market place is one of caution.  I agree with the minister that we are committed to repaying all debt but in the context of not imposing additional taxes or being prepared to reduce the size of government, a default to the average person seems likely.

Here are three policies that need to be addressed immediately, there are others but these are the most important.
1.    Import policy – we no longer have the luxury of importing whatever we want, decisions need to be made to restrict some imports whether by higher import duties or by banning them.  People that come to Jamaica marvel that we are a third world country but we live like we are a first world country.
2.    Energy policy – it is time for the minister to develop a realistic policy regarding alternative energy sources.  Oil is the biggest part of our import bill and if the price of oil were to go back to $140, we would not be able to afford to import it.  There should be a drive towards energy efficiency, efficient public transportation (the route taxi system in major cities is not fuel efficient and too much productive time and fuel is wasted in hours of traffic) and use of solar and wind technology.
3.    Production policy – we need to identify areas of production that we can go into with a view to increasing our exports.  Agriculture is the most obvious choice with the shortages of food commodities being experienced throughout the world.  There are opportunities not only in farming but also in food processing.  This would not only increase exports but also reduce imports of food items.  However no success can be had in this area without addressing the problem of pradiel larceny.

Here is a crazy idea for you; government should reopen the old jockey factory through partnership with Puma, Nike and others.  The aim would be to produce Memorabilia for Jamaica and possibly the Caribbean.  This would include flags, outfits for sporting teams, shirts and shorts with our athletes e.g., Usain bolt, Asafa Powell, Veronica Campell-Brown, etc, West Indies cricketers, Sunshine girls , Reggae Boys, etc.  Capitalize on the popularity of our sports men by putting people to work where all parties can get to share in the spoils.

Feedback question:  what do you think that Jamaica should produce for export?