Bank Exec Says JA’s Response to Economic Crisis Stifled by Lack of Cash

Manager of Research, Development and Portfolio Management at Pan Caribbean Bank, Merrick Plummer, has said that Jamaica’s efforts to respond to the current recession with stimulus packages have been stifled by the lack of cash resources.
Mr. Plummer said that many persons have responded to the economic crisis by withholding their money, and with the life blood of the financial sector cut off, Governments have been forced to throw money in to save the financial sectors, small businesses and spending on infrastructure development, in a bid to restore the economy.
“We have not had the ability to do so because, as you know, we have limited resources. Basically, what you find is that we have not been able to provide the sort of stimulus that other countries have been able to do,” he remarked.
However, he said that the Jamaican Government has reacted to the crisis by engaging in talks with the International Monetary Fund (IMF), maintaining stability in the foreign exchange market and reducing interest rates, as well as the size of the public sector.
“If we have limited resources, we have to spend less and two of the things that we have been trying to spend less on is interest rates, or interest costs, and wages,” Mr. Plummer said.
“So, right now, we have the Prime Minister coming out boldly and telling us that one of the things that we will have to do is to reduce the size of the Government sector. Those are what we can do. We cannot spend money like everybody else. Things that are under our control we will try to control,” he explained.
Mr. Plummer, speaking recently at an Economic Outlook seminar at the Birds of Paradise Restaurant, Mandeville, Manchester, said however that there is hope as many countries are now reporting growth, which is an indication of recovery from the economic crisis.
“Basically, six months ago the climate was gloomy and many countries were reporting that their economies were declining. What are we hearing today, we are hearing that these countries are growing,” he pointed out.
He said that countries like Brazil and Costa Rica in Latin America, Germany and France in Europe and the United States, were now reporting some amount of growth.
These reports are good for Jamaica, which depends on these countries to import its goods and services, he noted.
“We sell them services like tourism. Our relatives over there send us money, so we want them to grow, as they have been growing recently.” he said.
He added that other signs of recovery included a rise in business and consumer confidence, increases in the purchase of durable goods, higher commodity prices, especially for oil, and an increase in car sales.
“There is some amount of rising business and consumer confidence, so people are now more willing to do business and we are seeing an increase in consumer purchases. Certain types of machines that you do not ordinarily buy if you do not have to, we are seeing people buying these things, which is a good sign,” he noted.