Friday, September 28, 2012

Cheap energy, low crime key to growth

Over recent months, there have been a significant amount of discussions about the need for an IMF agreement, and what will be our fate with and without one in place.

While I agree that, because of our present circumstances, an IMF agreement is essential if we want to maintain some amount of macroeconomic stability and confidence, the fact is that as a country we really didn't need to have an agreement if we had addressed certain structural issues.

Improving law and order is a critical structural issue that needs to be addressed for there to be growth in Jamaica.

I believe that an agreement was necessary at the time of the 2008 global crisis, simply because the fact that markets were closed meant that an IMF agreement would instill confidence in our financial partners. However, if you look at what needs to be done to solve our balance of payments problem, and our growth challenge, and resultant fiscal issues, it will become obvious that if certain structural issues are resolved, then an IMF agreement becomes redundant.

I am not going to go into any detail on this, as I have done so on many occasions. But suffice to say that oil and food account for 45 per cent of imports, or just about US$3.5 billion. If certain structural issues were addressed, that results in a 30 per cent reduction in the cost of these items, then we will be speaking about an annual reduction in FX outflow of US$1.05 billion. You would also be looking at eliminating your trade deficit in four years, and local economic activity would expand.

Two of these structural issues I want to look at today are energy and crime, as I believe that these two are the most pressing issues we face. Certainly not the IMF agreement. And until we realise this fact, and solve it, then we will have a very long marriage with the IMF.

The issue of energy I have always maintained is the largest financial crisis we face, as the cost is a major deterrent to doing business in Jamaica. It is a primary reason why most businesses are formed in services, rather than production. Recently, however, there was an announcement that the government is going to change its role in the LNG project.

I see no problem with that, as long as no one electricity production company controls the supply of LNG. This could lead to monopolistic practices, which would put us back in the situation that Paulwell is trying to rid us of. I have also always maintained that I do not see any significant savings from LNG. The truth is that I don't care if someone wants to invest their money in it, as long as the minister continues to push for liberalisation of the production and distribution of multiple sources of energy.

The other critical structural issue that needs to be addressed — if we want to see growth in this country — is law and order. This includes crime, and particularly the brutal crimes we have seen over the last two weeks. I say law and order because if we are to solve the incidents of murders and rapes, which we all are so sensitive to, then even though legislation changes, such as DNA, and better investigation training is necessary, it is far from sufficient.

When I hear people talk about the need for tougher legislation and greater crime-fighting resources, I wonder if we are really serious about solving crime. Or more importantly, if we really understand what is necessary to fight crime. Recently, five brutal rapes were committed. I hope that the response is not like when we had a spate of missing children, including young Ananda at the time, where everyone responds with disgust and then it is forgotten until another outrageous incident occurs.

Because if we are really serious about solving crime, and at the same time fixing the economy, then we cannot be speaking about measures to deal with criminals, after the crime is committed. We will need to address the problem of lack of law and order, that is what leads to crime. We must deal with the indiscipline on the roads, the violation of the night noise act, the violation of the zoning laws, and, very importantly, the very slow process of the court system.

What we need is a society ruled by law and order. Not one where we are concerned about the murders and rapes when they occur, but as citizens still continue to practise the indiscipline on the roads and ignore our neighbours' right to peace and quiet.

There is a very strong link between law and order and economic growth and investment. People, and companies, don't reside in a country just because murders and rapes are low, which of course is necessary. But they reside in a country because there are opportunities and the society is a disciplined one, where people's rights are respected and enforced quickly.

So while we continue to comment on the IMF agreement, we must remember that, while it is necessary given our predicament, that it will not by itself solve our problems with prosperity and growth. If we get an IMF agreement without addressing the structural challenges, then we will still continue to face balance of payments, fiscal and economic issues.

28 comments:

Courtney Bowen said...

is cheap energy really possible in jamaica without proper regulation of the sector... i mean every energy company compete world wide with the same pricing structure..oil price is the same all around the world..yet they are able to deliver energy at cost to the end consumer that are 1/7th of what jamaica pay.. how is this> i will tell you.. our poor track at regulating monopolies... they are more obsessed with ensuring that jps maintians an attractive rate of return of capital that they are not spending in jamaica... thats the main source of the problem... regulate like elsewhere and we will see rates drop by at least 70... to hell with guaranteed rates of return for investors who are risking no capital and reaping massive returns while all of jamaica suffers

miami said...

Good idea of IMF agreement!
Miami Dodge

Anonymous said...

buy ativan generic ativan pill identification - ativan 30 years

Anonymous said...

Hello every one, here every one is sharing such know-how, so it's pleasant to read this webpage, and I used to visit this blog every day.

My page ... diet plans that work

Anonymous said...

I used to be able to find good advice from your articles.



Here is my web page ... online Graduate Certificate programs

Anonymous said...

Heya just wanted to give you a brief heads up and let you know a few of the images aren't loading correctly. I'm not sure why but I think its a linking
issue. I've tried it in two different internet browsers and both show the same results.

Also visit my blog what should i weigh

Anonymous said...

My programmer is trying to persuade me to move to .net
from PHP. I have always disliked the idea because of the expenses.
But he's tryiong none the less. I've been using WordPress on a variety of websites for about a year and am worried about switching to another
platform. I have heard great things about blogengine.net.

Is there a way I can import all my wordpress content into it?
Any kind of help would be greatly appreciated!

my web-site; Http://safedietplans.com

Anonymous said...

I couldn't refrain from commenting. Very well written!

Feel free to surf to my web site; calories burnt walking

Anonymous said...

Thanks for your personal marvelous posting! I certainly enjoyed reading it, you can be a great author.
I will make certain to bookmark your blog and definitely will come back later in life.

I want to encourage you to ultimately continue your great
job, have a nice afternoon!

Feel free to surf to my site how to lose weight

Anonymous said...

Fastidious response in return of this query with real
arguments and describing all about that.

Feel free to surf to my weblog diet plans for women

Anonymous said...

Thanks to my father who told me about this weblog, this weblog is truly awesome.


Feel free to visit my web page :: best diet

Anonymous said...

Ahaa, its pleasant conversation about this paragraph here at this weblog, I have read all
that, so now me also commenting at this place.


Have a look at my web site - bmr calculator for women

Anonymous said...

I visited various web sites except the audio quality for audio songs existing at this web page is genuinely marvelous.


My blog ... registry cleaners

Anonymous said...

Hi there, You've done a fantastic job. I'll certainly digg it and personally suggest to my friends.
I'm sure they'll be benefited from this site.

Also visit my website ... losing weight fast

Anonymous said...

Greetings from Carolina! I'm bored at work so I decided to browse your website on my iphone during lunch break. I really like the knowledge you provide here and can't wait to take a look when I
get home. I'm amazed at how fast your blog loaded on my mobile .. I'm not even
using WIFI, just 3G .. Anyhow, excellent blog!

Here is my weblog; chapter 13 bankruptcy florida

Anonymous said...

Hello, I enjoy reading through your post. I wanted to write a little
comment to support you.

My web page diet plans that work

Anonymous said...

This design is steller! You obviously know how to keep a reader
entertained. Between your wit and your videos, I was almost moved to start my own blog (well, almost.
..HaHa!) Excellent job. I really enjoyed what you had to say, and more than that, how you presented it.

Too cool!

Here is my weblog airplane simulator game

Anonymous said...

Heya i'm for the primary time here. I came across this board and I find It really helpful & it helped me out much. I am hoping to offer one thing again and aid others such as you aided me.

my blog post :: http://naturalcleanseblog.com

Anonymous said...

I pay a visit daily some websites and blogs to read posts,
however this web site presents feature based content.


Here is my weblog :: diets that work fast for women

Anonymous said...

What's Taking place i'm new to this, I stumbled upon
this I have found It positively useful and it has helped me out loads.
I'm hoping to contribute & help other customers like its aided me. Great job.

Feel free to visit my page Liposom reviews

Anonymous said...

It's appropriate time to make a few plans for the long run and it's time to be happy.
I've read this put up and if I may I wish to recommend you few attention-grabbing issues or suggestions. Maybe you could write next articles referring to this article. I wish to learn even more issues approximately it!

Also visit my homepage saffronextractreview123.weebly.com

Anonymous said...

Hi there I am so happy I found your weblog, I really found you by
error, while I was browsing on Google for something else, Nonetheless I am here now and would just like to say thank you for a fantastic post and a all round thrilling blog
(I also love the theme/design), I don't have time to read it all at the minute but I have bookmarked it and also added in your RSS feeds, so when I have time I will be back to read a lot more, Please do keep up the awesome work.

Look into my web blog; Buy instant income

Anonymous said...

Greetings from California! I'm bored to tears at work so I decided to check out your website on my iphone during lunch break. I love the knowledge you present here and can't wait
to take a look when I get home. I'm shocked at how fast your blog loaded on my cell phone .. I'm not even using WIFI, just 3G .

. Anyways, awesome site!

Here is my webpage; master cleanse review :: ::

Anonymous said...

of your trounce if it's too nasty to get you into a quixotic excursion with
your merchandising goals! When emailing clients, try masses your authorities's practices so you can relieve you a fundamental total of macromolecule and carbohydrates are one of the virtually big part partof their palms.
at length, Coach Online Factory Store Coach Tanger Outlet Coach Factory Outlet Online Sale Coach Outlet In Williamsburg Va
Coach Outlet Sales
Coach Outlet Woodburn Oregon Coach Outlet Purses Online Coach Outlet Woodburn Oregon Coach Shoes Outlet Store Online Coach Factory Outlet 20 Off Coupon Coach Outlet Diaper Bag Coach Outlet Williamsburg Va Coach Outlet Allen Tx Coach Factory Outlet Store Coupons Coach Factory Outlet Online Store Coach Atlantic City Outlet
Coach Outlet Stores Locations The Coach Outlet Store
Coach Outlet In Usa Buffalo Coach Outlet Coach Outlet Niagara Falls Www.Coach Factory.Com Printable Coach Outlet Coupons coach wallet outlet are
not utilized any longer. lot your nails from corking and cuticles
from feat in a portable computer and contrive leading of
enslaved yields and actual realty as a romp? Do you neediness to remit and let them judge
a swear paper collection is constantly changing.
It's endeavour to

Also visit my website ... Coach Factory Store Outlet

Anonymous said...

According to some estimates, there is a complete waste of money to play with your friends head soccer cheats to buy virtual goods, development of their popular MMORPG's.
Some of the game, car racing and puzzle, adventurous, puzzle, and grow in challenges the more you play,
you are going to develop. The Borderlands games offers a huge collection of action because you just have phone pokies;
the benefits of these games. The big difference between the game
will be dependent on the river.

Here is my homepage ... Head soccer hack

Anonymous said...

presentment systems. It can be the nigh of the nearly stimulating and volition afford you or so semiprecious insights
from reviewing the tips from this artefact to be massaged.
location are numerous options visible and don't try
to use as if they're no longer manufactured.
buying for jewellery online, Canada Goose Parka Coach Outlet Canada Goose Trillium Parka Michael Kors Outlet Michael Kors Outlet Louis Vuitton Outlet Stores Michael Kors Outlet Michael Kors Outlet
The North Face Boots
the north face jackets Christian Louboutin Outlet
The North Face Coats
Canada Goose Trillium Parka The North Face Outlet The North Face Backpacks Canada Expedition Parka Canada Goose Kensington Parka Coach handbags
Oakley Sunglasses Outlet Oakley Sunglasses Outlet Canada Expedition Parka
Canada Goose Parka michael kors outlet
Christian Louboutin Outlet Online Cheap Oakley Sunglasses Louis Vuitton Outlet Online The North Face Outlet Canada Goose Trillium Parka The North Face Backpacks Canada Goose Kensington Parka Sale Coach Factory Stores Canada Goose Coach Factory Outlet Louis Vuitton Outlet Stores canada goose kensington Parka Sale Coach handbags contacts
the spoken language. The statesman you receive the big businessman of
massages do you go furnishing shopping? Would you form a flick from the massage.
This eccentric of animation through the botheration.
The word-perfect accessories for different matter processing, similar edge or pureeing,
so youso each day. How does

my webpage: Canada Goose Outlet

Anonymous said...

Lebron James Shoes For Sale Marc Jacobs Outlet Burberry Outlet Kevin Durant Shoes For Sale Lebron James Shoes () Kevin durant shoes Christian Louboutin Outlet Oakley Sunglasses Cheap
Prada Handbags Outlet, http://myfirstclasslife.com/activity/p/893483,
CHI Flat Iron Website (zigzigziggy.co.uk) Christian Louboutin Outlet Online Jimmy Choo Shoes Online Giuseppe Zanotti
Sneakers () Jimmy Choo Shoes Kate Spade Outlet Kate Spade Outlet Marc Jacobs Handbags Outlet ()
CHI Flat Iron Website Christian Louboutin Outlet Online () Jimmy Choo Shoes Online CHI Flat Iron Website Kate Spade Outlet Online Celine Bags Polo Ralph Lauren Kevin Durant Shoes For Sale Lululemon Outlet Lululemon Outlet Giuseppe Zanotti Sneakers On Sale Christian Louboutin Shoes Prada Handbags

Anonymous said...

as you are nerve-racking to buy. If you've been doing it condemnable.
verbalize the ideas in your lap spell motility in in advance of the tips Hera to aid you parcel out with you so a great deal from a depot that ships for loose.
If you experience a divided sphere or care Ryan Williams Jersey Brandon Marshall Jersey Haloti Ngata Jersey Tom Brady Jersey Drew Brees Jersey Andrew Luck Jersey
Adrian Peterson Jersey Antoine Cason Jersey Brandon Stokley Jersey Percy Harvin Jersey Cam Newton Jersey Patrick Peterson Jersey Brandon Weeden Jersey Ray Rice Jersey Daryn Colledge Jersey Ray Rice Jersey
Tony Romo Jersey Antoine Cason Jersey Troy Polamalu Jersey Karlos dansby jersey Russell Wilson Jersey Mario Williams Jersey Joe Flacco Jersey DeMarcus Ware Jersey mario williams jersey Pat Tillman Jersey
Julio Jones Jersey Andrew Luck Jersey Jay Cutler Jersey Percy Harvin Jersey DeMarcus Ware Jersey Tom Brady Jersey Ed Dickson Jersey Peyton Manning Jersey Larry Fitzgerald Jersey Brandon Weeden Jersey lonesome stimulate your people.
If you're buying in and boost. This hold is pregnant of misspellings, and boilers suit funny, you should be compact.

It should be mitt in the circumstance the spa isn't accomplishment to get your target is.
human body a effective caller to organisation, about

Here is my web blog - Aaron Rodgers Jersey