Minister of Finance, Planning and the Public Service, Hon. Dr. Peter Phillips, says a national consensus is required of all Jamaicans about the importance of the country getting out of the current debt trap.
The Minister said it has often been repeated, but not truly recognised by a lot of people, the severity of the economic situation that the country has to confront. “It is a severe situation, but it is one that we can, we will, and we must overcome,” he added.
Dr. Phillips was addressing the 28th Annual Joint Central Conference of the Special Constabulary Force Association, at the Sunset Jamaica Grande Hotel, in Ocho Rios, on June 28.
“The heart of the problem that we face is the enormous public debt that the nation has to confront. Our debt currently stands at some US$8.6 billion or JA$1.7 trillion, and we can only have confidence in being able to secure high rates of growth for the country, and to provide for the future of coming generations, if we are able to reduce this debt, as measured by debt to Gross Domestic Product (GDP) ratio,” he argued.
The Minister pointed out that the current value of the country’s debt is about 128 per cent of everything produced in the country (goods and services) annually.
He informed that the consequence of the debt right now is that the Government cannot invest sufficiently in all the things that are required to ensure rapid continued development, pointing out it has also affected a number of projects being financed by overseas donor partners, who are demanding that an agreement be reached with the International Monetary Fund (IMF) before funds are forthcoming to the projects.
“It is also the case that in respect of private capital markets, we are not going to secure (money) at reasonable rates that we can afford, unless we demonstrate an ability to (reduce) our debt,” Dr. Phillips said.
The Minister said the Government has no intention, as an administration, in returning to those days when Jamaica literally faced the problem of isolation from the international financial system, adding that such a situation would make life unmanageable and set us back as a nation for a considerable time.
Dr. Phillips emphasised that over the long term, the country needs to be put in a position whereby a debt of this magnitude is not accumulated again.
By Bryan Miller, JIS Reporter