Here is my two cents re devaluation of the Jamaican Dollar. Is it somewhat worrying yes. Worrying because devaluation as an economic strategy is often aimed to booster economic growth through exportation and attracting foreign investments. The later at this time seem more of a possibility...however, Barbados who for years have relied heavily on foreign investments have seen them selves in a financial pickle as these kinds of activities weaken globally. Exportation.....well I am yet to see the collective framework that would move us towards exportation in the short to medium term? I am waiting? With that said. Lets say that somehow there are real plans to booster exportation and attract foreign investments. Does the devaluation then make sense? Not sold yet #pondering Complicated economics aside this is what I think... (1) Our dollar is still inflated. Simply put economic activity has been stifled in Jamaica since before my lifetime. (2) After the federation dissolved Jamaica, Trinidad and Barbados were all face with the real threat of currency devaluation. Trinidad manufactured there way out of the problem, Barbados embraced education in a way that allowed for social and economic reform policies, Jamaica borrowed there way out. (3) now if 3 has any credence then it would stand to say that Jamaica has not really had a real economic policy in place for decades (4) Without any real way of generating revenue then we have controlled our dollar devaluing by false measures. (5) Is Jamaicas economy equal to Japans? Yet the JAD had always been comparable to the Yen. (6) International sites like Amazon and Walmart are currently trading the JAD ABOVE 119:1 - THIS INDICATES THE INTERNATIONAL PERCEPTION OF THE DOLLAR. (7) Bauxite, sugar and Banana industries on the verge of death. Some of our major foreign currency earners (8) The tourism industry is badly in need of reform. Villas close daily while all inclusives suck the resources and migrate funds to their home countries. Bahamas has few all inclusives. even the great Atlantis isnt all inclusive. There strawberry market is laced with Jamaican paraphernalia and tourist arriving on pier pass through purchasing souvenirs as a natural part of their trip. the Norwegian sky one of the smaller vessels hold about 2000 peeps. Ships like Oasis holds almost 6000. Missed opportunities Jamaica? I could fill my timeline with points that would suggest that there is little economic reason to think that our dollar is at its intrinsic value. My take is that without the large scale borrowing, the lack of any real economic policy that supports true economic growth and a bunch of dimwits that for years have dug an economic grave for this country our dollar is worth conservatively 125:1. Note conservatively. My issue is that the pace of the devaluation can have adverse economic impacts (a whole different convo) it is not that the rate implied by Lagarde is in anyways far fetch given the economic state of our beloved Jamaica.
Posted on: Tue, 01 Jul 2014 01:41:22 +0000
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