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Monday, December 14, 2015

Whether or not Central Bank Governor, Jwala Rambarran, acted illegally and or irresponsibly in releasing information on the purchases of foreign exchange (forex) by named private corporations is not the most critical issue of the day. The lawyers on all sides will have a field day with those contentions.

What is far more important for public discussion and action by all is what is to be done to restore (or start) productive activity in the economy. Vitally important too is for the national community to become sharply understanding of the unproductive use of foreign exchange by elements of the private and state sectors and how we as consumers promote the productive sectors of other economies and leave ourselves forever dependent on international energy prices being high.

Moreover, the public discussion has to have refrains of previous boom periods when we wasted billions of US dollars on “riotous living” instead of using the windfalls to begin diversification of the economy.

During the first boom, Jamaica’s Prime Minister Michael Manley, perhaps in a fit of jealousy, noted that the dollars were passing through our system “like a dose of salts.” We became very offended; but we ignored the message of profligate living and unproductive spending leading inevitably to economic unpreparedness even after a windfall.  

But having made those points, the statement by Governor Rambarran should attract critical scrutiny for motives, objectives, professional thoroughness and what it can teach us.

As a journalist I have an inbuilt appreciation of “the right of the public to know” the truth of its affairs. However, I question public and private sector officials when they conveniently parade what is to them something they use to cover themselves and their actions which are often in contradiction to the principle of the public right to know.  

So for instance, why is the Governor only now being upfront and aggressive in calling the “recession?” Why did he not give early warning signals, quarter-by-quarter, of the continuing decline of the economy and warn of the consequences? 

Was it too politically volatile in the run-up to the September general election to signal that wild spending by the Government, the private sector, by certain state enterprises and by citizens was leading us to the recession he now identifies?

Yes, there have been continuing releases on the quantity of the foreign exchange sold by the Central Bank; but why did the Governor not place such information in the context of what he may have considered the unproductive use of the forex by the distributive and retail sectors? 

Having decided to focus our attention on the massive sums of foreign currency spent on imported consumption, why did the Governor not give a comprehensive list of all foreign exchange users? Why did he not also tell the country of the small- and medium-size businesses which have utilised foreign exchange but contributed little to earning the vital currency through export activities?

In this respect, the Governor’s statement on the major foreign exchange users needed to have been balanced against the forex earnings (if applicable) of the companies and state enterprises named. Critically too, the Central Bank Governor needed to have accounted for what measures the Bank took to better manage the outflow of foreign exchange. What were the outcomes of the monetary policy measures utilised to staunch the outflow of foreign currency?

However, notwithstanding the serious shortcomings of the statement as articulated, the population must utilise the information given on the use of the forex to critically and clinically develop plans for the more productive use of the lifeblood foreign exchange.

The economic players, inclusive of you and I as consumers, investors and the like, must use the information given to find ways to replace the foreign goods and services, upon which hundreds of millions of hard currency dollars are spent, with locally produced items.

We need to find ways and means to generate economic activity and do it in such a manner to stimulate local production and be net earners of foreign exchange for the economy and society.    

Effectively used, the information given by Governor Rambarran can lead to demands on the owners and managers of the supermarkets to give greater encouragement to local food producers. 

So too should consumers learn the lesson from the revelations of the Governor that there has to begin the transformation of habits which go back to the period when we exported raw materials and imported all that we consumed. The figures on food consumption indicate that little has changed over a couple hundred years.

The business corporations, their associations, their lawyers and public relations agents are no doubt seeking to make Governor Rambarran pay for what they perceive as his illegal exposure of their use of the economy’s foreign exchange. The Government of the day rubs its hands with delight at what it may perceive to be Rambarran putting his head on the chopping block.  

Meanwhile, the population, the owners of the foreign exchange and ultimately those who will suffer most from recession turning into depression, must use the information released for self-education.

Over the last three weeks this columnist has outlined in some detail, the potential for economic activity to be restarted through well planned and organised housing projects to meet the need for 160,000 homes of varying kinds. Simultaneously the $4 billion food import bill is a source for agricultural production.

The linkages amongst the industries would deliver employment and growth.


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