New from our Region
Jamaica's Finance MinisterPredicts Tough times ahead
Jamaica's Finance and Planning MinisterDr. Omar Davies saidin an article in the Gleaner that whicheverparty forming the next government would face major challengeswith earnings tourism and the bauxite and alumina industry, primarilybecause of the sluggishness of the United States economy duringthe past year.
Noting that the United States economy hasnot recovered as many had predicted, the Minister said the performancein its stock market mirrored a general uncertainty about the futurein that country.
The performance of the US economy, he said,was partly, but not totally related to the after effects of theSeptember 11, 2001 terrorist attacks on the United States, whichhave continued longer than anticipated. However, that performancewould continue to have an effect on the performance of the localeconomy.
Speaking at a breakfast presentation hostedby Citibank's Citiservice at the Terra Nova Hotel in St. Andrew,Dr. Davies said that "as long as there is this concern abouttravel, as evidenced in the present problems facing every singlemajor airline in the US, whether it be United, American, US Air,that doesn't speak well for our tourism."
According to the Gleaner article, Daviessaid that while Jamaica may seek to garner a larger percentageof the tourism market, "the fact is, the overall pie is notgrowing in terms of international trade as we had projected."The Minister said that whatever growth there may be, the US domestictourism market would absorb a larger percentage. "That isa challenge which faces us, both in terms of foreign exchangeearnings as well as insurance of employment," he said.
Dr. Davies said that although Jamaica hasdone better in the context of that uncertainty than many othercountries, "in doing better one of our strengths is alsoour weakness in the sense that Jamaica's tourism product is moreintricately linked to the rest of the economy than say Bahamasor Barbados" since the downturn in tourism has also impactedagriculture and manufacturing.
"So that's one reality that we haveto face and whichever party forms the next Government, the issueis how do we carve out a bigger slice of a pie, which is not growingat the rate we anticipated in the tourism sector," said theFinance Minister.
Dr. Davies said the sluggishness of theUS economy also implied that demand for a product such as aluminawould suffer.
The extent to which that would impact onJamaica's industry clearly has implications in terms of plansfor expansion and foreign exchange receipts, he added.
A third factor, he said, related to thefact that Jamaica was 98 per cent dependent on imported fuel andthe country would have to accept the product at whatever priceit was being sold on the international market. Among other effects,he said, that has implications for the balance of payments.
Those were three major challenges whichany new administration would have to face, he said.