DR CLARKE… now is not the time to give up but the time to differentiate (Photo: Garfield Robinson)
…says Jamaica can’t afford a third debt restructuring
As the country seeks to recover from the fallout caused by the novel coronavirus pandemic, Finance Minister Dr Nigel Clarke has reiterated the need for the government to conduct its economic affairs carefully and manage the debt if it wants to. successfully weather the crisis..
Speaking at the Private Sector Organization of Jamaica (PSOJ) post-budget discussion yesterday, the Minister of Finance said that regardless of the negative impact of the pandemic, the country has weathered the storm well. storm but remains on a tight leash that calls the nation tax affairs must be strictly managed.
“The way out of this [crisis] is quite clear and on this, discipline must be maintained. We have become so used to the level of debt we have that we don’t really realize how high it is and the risk it entails. Having had two debt restructurings in the past decade, there is no way we can afford a third one as it would be disastrous.
“One thing we have to be aware of is where we are as a country, that’s why it’s important to make politics the first principle and not just borrow here and there and look at what others are doing, but to understand our circumstances and design policies that work for them,” Clarke explained while stressing the fact that despite the government’s ability to reduce debt to around 94% before the pandemic, the country was maintaining still high debt levels, ranking third out of 35 other countries in the Western Hemisphere.
He added: “Given where we are and the risks and uncertainties we face [related to national disasters, commodity prices, and changes in the global environment] we cannot afford to be caught off guard when things start to change in a very uncertain time frame. Any of many factors can send Jamaica south, and we are on the event horizon of a very large black hole that we cannot afford to go through but must move away from quickly. He said this amid growing concerns over an imminent threat that is expected to come from an emerging market debt crisis that many believe will affect countries over the next few years.
Dr. Clarke stressed the need for the country to take differentiated action if it is to overcome the crisis and move positively into the future. To achieve these results, he stressed the need for greater collaboration in the form of public-private partnerships and the private sector to play a critical role in growth.
He said the government, through its expansion of private equity fund facilities, was also working to address issues related to access to finance in order to stimulate the growth of small businesses as well as to design and to implement accommodating policies that will address bureaucracy and iron levels of inefficiency.
“Now is not the time to give up but the time to differentiate. Our direction is unquestionably positive and there is no better time to differentiate than in times of crisis and that is exactly what we do,” Dr. Clarke said.