| T O P I C R E V I E W |
| Karl |
Posted - Mar 21 2003 : 09:37:33 AM
Huntress
Remittances to the rescue
Friday, March 21, 2003, 7:17:23 AM
IP:170.148.10.23
Remittances to the rescue
published: Friday | March 21, 2003
A FURTHER deterioration in Jamaica's balance of trade account has just been announced which means that the cost of imports continues to rise but what we earn from exports continues to decline. This results in an obvious economic gap, which were it not for remittances from Jamaicans working abroad, would thwart any attempt to balance the national budget.
In a properly run economy there should not be such heavy reliance on remittances which represent unearned cash-flow descending on the island like manna from heaven. In fact the gratuitous dollars may have an adverse psychological effect they mask the extent of our financial crisis, lure us into a state of complacency, postpone the day of reckoning if, for any reason, they should be cut off or start to decline because the incomes of Jamaicans living abroad are themselves reduced by increased taxes or redundancies.
In 2002 remittances were galloping along at a rate of increase of 27 per cent over 2001 some $1 billion in 2001 compared with $1.3 billion in 2002. One should not look a gift horse in the mouth and to put the windfall in perspective we note that remittances to Jamaica are the second highest in the Latin American and Caribbean region, surpassed only by remittances to Colombia. Remittances are now the largest source of net foreign exchange, exceeding foreign exchange earned from tourism and accounting last year for 12.2% of Jamaica's gross national product.
Grace Kennedy in partnership with Western Union were the pioneers in regulating and formalising much of the remittance flows and we congratulate Capital and Credit Merchant Bank which, through a subsidiary, has joined forces with Jamaica Co-operative Credit Union League for opening up the remittance market to some 630,000 credit union members. Transfers can now be effected at 25 credit union branches which will be a special convenience at the grass roots level.
The credit union has the membership and physical locations, Capital and Credit will provide the computer software and training in the words of Andrew Cocking, managing director of Capital and Credit, 'a win-win situation for all concerned'.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
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