Merit in Pooling Financial Resources – Dr. King

Story Highlights

  • Co-Executive Director of the Caribbean Policy Research Institute (CaPRI), Dr. Damien King, says there is merit in the Government’s proposed relocation of public bodies’ financial resources to the Consolidated Fund.
  • Dr. King also contended that successive administrations could have also utilised State entities’ surplus funds that were sitting in low-interest accounts, rather than borrowing high-cost loans, which have rendered Jamaica highly indebted.

Co-Executive Director of the Caribbean Policy Research Institute (CaPRI), Dr. Damien King, says there is merit in the Government’s proposed relocation of public bodies’ financial resources to the Consolidated Fund.

Speaking on the Jamaica Information Service (JIS) television programme, ‘Issues and Answers’, on March 24, Dr. King said it is understandable that within Jamaica’s tight fiscal space, State entities would be keen to secure financial resources to ensure that their specific obligations were adequately funded.

This, he argued, was logical from the perspective that “fiscal resources have been tight in Jamaica for a very long time”.

The Co-Executive Director said consequent to this development, over time, many “special purpose funds” have been created.

These, he explained, were taxation arrangements earmarked for specific engagements, citing the Culture, Health, Arts, Sports and Education (CHASE) Fund and the Tourism Enhancement Fund (TEF).

“While it guarantees funds for all these purposes, the problem is that it doesn’t allow a government, at any point in time, to weigh on equal terms competing demands for its expenditure… because it doesn’t have access to the total pool of funds,” Dr. King said.

“So, how do you (for example) weigh the need for drugs at the Kingston Public Hospital (KPH) against a legitimate need to keep the verges tidy on some highway that tourists and residents on the north coast drive on,” Dr. King argued.

Citing each as a legitimate need, he emphasised that the Government, at some point, would need “to be able to weigh those two against each other”.

Dr. King also contended that successive administrations could have also utilised State entities’ surplus funds that were sitting in low-interest accounts, rather than borrowing high-cost loans, which have rendered Jamaica highly indebted.

“So, while we understand why funds are separated… it’s an efficient way of managing your funds when you have tight resources. So, there is an argument for pooling them,” he added.

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