June 11, 2022 | By Hopeton O’Connor-Dennie | The World Bank is warning of “stagflation” as a result of the Ukrainian/Russian war. Growth figures have been projected to 1.5% downward from 4.1% to between 2% to 3.9%. This has caused Central Banks to raise interest rates.
There has been a lively debate in Jamaica as to what role the BOJ should or has been playing as it relates to stemming “stagflation”. The business sector has been strident as it feels the BOJ has been too aggressive as it tries to mop up the liquidity.
70 Countries Could Fall
The World Bank is warning that it is projecting that some seventy developing countries could fall. Jamaica is not among them.
Seventy percent of countries could fall into recession. It is slashing his world projection to 4.1.
Jamaica is outside this dire projection. Jamaica is protected to grow to 3.2 percent. Dr. Nigel Clarke said we wanted to differentiate ourselves. 2.3% for 2023 for Jamaica is what we are looking at.
The Opposition Leader Hon. Mark Golding has been urging the Andrew Michael Holness led government to slow the debt repayment and instead release an estimated Ja$40 billion dollars to assist the most vulnerable in our Jamaican society. The Finance minister has said no. This has been a defiant no. The Opposition has repeated their call.
PM Andrew Michael Holness
“We need to surge greater partnership with the private sector. The Caribbean is the most dependent area. Thirty six ($36) billion is being spent by the tourist. We should incentivise companies.”
Prime Minister Michael Andrew Holness was speaking overseas at a Summit of the Americas today June 8, 2022 in the USA.
Jamaica so far is on a sound economic trajectory. In the 70’s and 90’s a lot of unforced errors were made. The Jamaican economy was mismanaged and debt was allowed to skyrocket. There was no real plan to pay down the debt. Spending and low production was the order of the day. We were heading towards bankruptcy.
Dr. Nigel Clarke
The turning point started on or about 2010 to date. It actually started with Dr. Peter Phillips, who was Finance Minister, under the then PNP government led by Hon. Portia Simpson Miller as Prime Minister of Jamaica. When she lost the election of 2016 this saw a new JLP administration led by Andrew Michael Holness. The Finance Minister Hon. Audley Shaw took the baton and did well. He then handed the baton to Dr. Nigel Clarke who has performed spectacularly. Dr. Nigel Clarke is better trained to do this job. He can be termed a specialist. It was painful to see Audley Shaw go, but such is the nature of politics. No position is guaranteed. You either serve at the whim of the electorate or the Prime Minister.
The tough decisions of the Andrew Michael Holness led JLP administration are paying dividends. They navigated well the pandemic and are now on a sound footing to deal with any fall out due to the Ukrainian/Russian war.
What is going to happen next.? Will there be another world war over grain distribution and oil/energy crisis? Will the blockade be broken in the Black Sea which would allow for the effective distribution of grains, fertilizer and say natural gas. We hope good sense will prevail. Starvation is either happening or on the verge of occurring in many African nations who may be suffering from drought and other disasters.
30 Percent Grain Supply
Between Ukraine and Russia they supply an estimated 30 percent of grain and a high percentage of energy supply to the world market. Fertilizer is another of the high demand products which are produced in the Ukraine/Russia area.
Hopeton O’Connor-Dennie is a poet, elegist, and author who writes for Vision newspaper.