Jamaican opposition spokesman on Finance, Audley Shaw, Tuesday offered three alternative economic solutions to spur the country towards broad-based investment, growth and economic development.
Among the solutions was a new debt reduction strategy which, he said, urgently needed attention.
He has recommended that the multi-billion-dollar PetroCaribe fund be used to address the country’s mounting debt problems, reports the Jamaica Gleaner.
Mr. Shaw offered the solutions while making his contribution to the Budget Debate in the House of Representatives.
He said the PetroCaribe Agreement should see the country receiving some $18 billion by the end of the current financial year.
“It is clear that any government serious about debt reduction should use PetroCaribe as a debt reduction tool and not as a social spending slush fund,” Shaw said. “PetroCaribe funds should not be used as a crash programme by any other name.”
Mr. Shaw predicted that in just three years, this policy alone could lower debt to GDP ratio by an increment of eight per cent, and interest expense by three per cent of revenue.
He argued that money from PetroCaribe was not the only debt reduction option available. Mr. Shaw pointed out that flows that are linked to foreign currency, such as bauxite earnings, airport fees, earnings at the ports, among others, could also be considered.
Mr. Shaw is, however, recommending that the Government borrow US$1 billion (J$65 billion) from a consortium of multilateral institutions, such as the Inter-American Development Bank, the World Bank and the Caribbean Development Bank, to replace expensive instruments as they mature.
As it relates to economic growth, Mr. Shaw recommended an aggressive export-oriented industrial policy by making investments in new, fast-growing sectors, such as agri-business, light manufacturing and health tourism.
He also recommended a revival of the agricultural sector by putting in place a support programme for small farmers that allows them access to affordable credit at single digit interest rates.
The Opposition spokesman suggested that the Government should put in place incentives such as removing General Consumption Tax, Customs duties and user fees on capital goods and raw materials for the private sector.
As it relates to a fixed exchange rate, a position favoured by former Leader of the Opposition, Edward Seaga, Mr. Shaw said: “Proposals to fix the exchange rate will not fix the problem. While we agree that this issue requires greater study as we fully recognise its merits, we believe that such a policy could be inappropriate for Jamaica at this time.”