Finance Minister Highlights Critical Areas for Economic Development


Minister of Finance and the Public Service, Audley Shaw has identified, as among the critical pillars for a competitive economy, debt reduction, an appropriate energy policy, and tax reform.
As it relates to tax reform, he said this includes rate cuts over time, and elevation of the compliance rate, which will help to reduce corruption. Another key factor to strengthening the economy, he pointed out at the launch of Money Expo yesterday (February 20) at the Pegasus Hotel, is an aggressive campaign to promote investment.
In terms of debt reduction, he stressed that Jamaica cannot continue to borrow expensive money for infrastructure projects. He said that the Government’s approach would be to stick to the capital market to raise money as needed.
On energy, he said, “We must stop paying lip service to the environment,” while adding that government was working on a policy towards cheaper energy, which could involve coal, liquid natural gas, and incentives for car-pooling.
Turning to investment, Mr. Shaw informed that the Jamaica Tourist Board (JTB) has been given $140 million to ramp up its marketing of Jamaica to attract foreign investment especially in hotels.
He noted the confidence already placed in Jamaica by Spanish investors who are constructing some 10,000 hotel rooms.
In a wide-ranging presentation, Minister Shaw urged investors to be cautious about where they put their money, particularly as it relates to the attractiveness of quick-return schemes, which he said has led many to invest in non-regulated investment entities.
“Some people see the regulators as (the) enemy. regulations mean that there are rules of transparency, and private citizens and investors must be protected.if you do not want it, you’re on your own,” he warned.
He encouraged investors to use the regulatory framework as a guide, and thus the basis to make sound financial decisions. Minister Shaw noted that without a link to a country’s productive and wealth creating capacity, “money becomes a useless piece of paper.”
Recalling the financial sector collapse of the 1990s, he described the involvement of FINSAC and its legacy as a monumental catastrophe, in which the public sector was left with a $140-billion bill or 40 per cent of the Gross Domestic Product (GDP).
But according to Minister Shaw, there are greater concerns: “The greatest impact (of the financial collapse) was the effect on entrepreneurial spirit . this has made investors risk averse, “so we are after every magical way of making money.”
Pointing to Jamaica’s $1 trillion debt, which represents 54 per cent of the total budget or 142 per cent of GDP, the Finance Minister stated that when real wealth is invested across the board, this provides a broad-based opportunity for all persons, and productivity will be high.
Another devastating consequence of the financial sector collapse, he argued was “the rise of the informal economy and the fall of the formal economy.it became better to invest in government paper than operating factories.everybody selling, more sellers than buyers.more persons out of work.”

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