Editorial:The ‘financial wizard’ needs a worker-oriented solution now
Finance Minister, Dr Nigel Clarke walks around with a larger-than-life reputation of being a ’financial wizard’ and the ‘man with the brains’ in the Andrew Holness-led Jamaica Labour Party (JLP) administration.
Wearing the badge is one thing, but proving that he is worthy of such a badge is another.
Today, more than ever before, Dr. Clarke faces the acid test of whether the policies crafted and/or marshalled by him are having a positive impact on the lives of the Jamaican people, most of whom are working class, poor and marginalized.
One simple, yet effective, way of assessing the health of this or any national economy, is by the movement of the rate of exchange between the Jamaican dollar and the United States dollar, on which most international currencies are pegged.
As we make this assessment, we should bear in mind that this, and past JLP administrations, have always projected themselves as being better economic managers than those in the People’s National Party (PNP) administrations. Their ability to stem the devaluation of Jamaican dollar over the years, has been one of their headline achievements.
Let’s look at the figures.
In 1989 the JLP administration handed over the reins of government to the PNP with an exchange rate of $55.50 to one US$. By 2007, when the JLP returned to office, the dollar had jumped to $71.00 to one US$. During one of the worst global economic crises in 2007, the dollar moved to $89.00 to one US$ in 2008, then Finance Minister, Audley Shaw, was able to revalue the dollar and keep it at $86.00 to one US$ for three years.
The PNP defeated the JLP in 2012 and the dollar started another slide, moving to $121.00 to one US$, until it was replaced by the JLP in 2016. Then, again with Audley Shaw at helm, the dollar was held at $124.00 to one US$ until he was replaced by whiz kid Clarke in 2018.
Since then, the dollar has plunged to $154 to one US$ and there is no indication that it will be stabilized soon. ‘Financial wizard’ indeed!
Based on the utterings from Minister Clarke, Bank of Jamaica governor, Richard Byles and the gurus in the Private Sector, the dollar is moving in the ‘right direction.’
The public is being led to believe that the dramatic decline of the dollar is ’no problem’. The problem is inflation.
Unfortunately for them, this cannot confuse the Jamaican people. The motorist well understands that when $1,000 hardly moves the gas gauge – that is a direct result of the dollar slide. The housewife well understands that when she needs almost a half more money to take home the same amount of food from the supermarket- that is a direct result of the dollar slide.
By simply raising prices to cover the cost of the run-away dollar slide, merchants and manufacturers pass on their problem to the consumer, including government workers, who, like all workers, are stuck with wages that lose their value daily.
Amid the pain of crushing price increases, the nation watches as the ‘financial wizard’ will try to explain the ‘peanuts’ that will be offered to government workers, especially the highly praised ‘frontline’ workers, who guided us through the early days of the COVID-19 pandemic.
Grandstanding and the banging of desks cannot replace worker-oriented financial solutions this time!
