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Gov't urged to be aggressive but cautious on economy
BY KERRY MCCATTY Observer staff reporter
mccattyk@jamaicaobserver.com
Wednesday, January 23, 2008
Business leaders yesterday urged the four-month old Bruce Golding administration to move aggressively but cautiously to deal with the country's economic problems, with a possible 20 per cent reduction of the civil service as one solution.
Additionally, the leaders, speaking at a luncheon hosted by Observer chairman Gordon 'Butch' Stewart at the newspaper's Kingston office, said the Government's decisions would have to straddle what is politically shrewd and what is economically viable.
CEO of Life of Jamaica, Richard Byles (right) makes a point at yesterday's lunch hosted by Observer chairman Gordon 'Butch' Stewart at the newspaper's Kingston office. Beside him is Kenny Benjamin, head of the Guardsman Group. (Photo: Bryan Cummings)
"Over the last four to five years we've missed every target we've set ourselves," president and CEO of Life of Jamaica, Richard Byles, said. "[The finance ministry] is gonna have to make this budget work - set better targets and reach them."
His view was shared by a number of people in the meeting, including former president of the Jamaica Hotel and Tourist Association, Godfrey Dyer, who suggested that the upcoming budget would "tell us whether we have a serious government in place".
Byles said an "out of control wage fund" had to be addressed and the civil service had to be cut and promised only a "sub-inflation increase" which, he admitted, was "a tough medicine to swallow politically".
Outside of that, he argued, "we can't climb out of this debt trap".
However, Stewart suggested that it would be difficult to solve problems that took a long time to develop under the previous administration, which was in office for 18 years.
Byles said while rating agencies were concerned about the level of risk in Jamaica, they were also impressed with the change of government.
"The confidence that they have is directly proportional to what they expect them (the Government) to do. They don't want to see itsy bitsy moves," Byles said. "That confidence engendered the expectation."
Wisynco's William Mahfood suggested that the number of ministries be reduced as part of an "overall cut all the way down the line".
However, Stewart said cutting ministries was not immediately feasible, since "Jamaica is hard to manage". Instead, he said, the Government would need about three years to learn how to maximise efficiency, without excess manpower, then perhaps cutting ministries could be considered.
The Government's slim parliamentary majority (32 - 28) and the fact that it could affect the administration's need to make tough decisions was also raised in the discussion.
One suggestion from Insurance Company of the West Indies chairman Dennis Lalor was that the Government should ride the wave of goodwill it was receiving from the business community and call an election, with the hope that the results would strengthen its mandate.
President of the Private Sector Organisation of Jamaica, Chris Zacca, agreed.
Meanwhile, Bashco and Megamart CEO Gassan Azan said what was needed at this point was a frank discussion between the Government and current foreign investors to determine the best way forward. He said many of these investors who were now being sceptical had reaped profits, which they repatriated.
Stewart added that local businesses should replace "emotional investments" with "hard investments".
BY KERRY MCCATTY Observer staff reporter
mccattyk@jamaicaobserver.com
Wednesday, January 23, 2008
Business leaders yesterday urged the four-month old Bruce Golding administration to move aggressively but cautiously to deal with the country's economic problems, with a possible 20 per cent reduction of the civil service as one solution.
Additionally, the leaders, speaking at a luncheon hosted by Observer chairman Gordon 'Butch' Stewart at the newspaper's Kingston office, said the Government's decisions would have to straddle what is politically shrewd and what is economically viable.
CEO of Life of Jamaica, Richard Byles (right) makes a point at yesterday's lunch hosted by Observer chairman Gordon 'Butch' Stewart at the newspaper's Kingston office. Beside him is Kenny Benjamin, head of the Guardsman Group. (Photo: Bryan Cummings)
"Over the last four to five years we've missed every target we've set ourselves," president and CEO of Life of Jamaica, Richard Byles, said. "[The finance ministry] is gonna have to make this budget work - set better targets and reach them."
His view was shared by a number of people in the meeting, including former president of the Jamaica Hotel and Tourist Association, Godfrey Dyer, who suggested that the upcoming budget would "tell us whether we have a serious government in place".
Byles said an "out of control wage fund" had to be addressed and the civil service had to be cut and promised only a "sub-inflation increase" which, he admitted, was "a tough medicine to swallow politically".
Outside of that, he argued, "we can't climb out of this debt trap".
However, Stewart suggested that it would be difficult to solve problems that took a long time to develop under the previous administration, which was in office for 18 years.
Byles said while rating agencies were concerned about the level of risk in Jamaica, they were also impressed with the change of government.
"The confidence that they have is directly proportional to what they expect them (the Government) to do. They don't want to see itsy bitsy moves," Byles said. "That confidence engendered the expectation."
Wisynco's William Mahfood suggested that the number of ministries be reduced as part of an "overall cut all the way down the line".
However, Stewart said cutting ministries was not immediately feasible, since "Jamaica is hard to manage". Instead, he said, the Government would need about three years to learn how to maximise efficiency, without excess manpower, then perhaps cutting ministries could be considered.
The Government's slim parliamentary majority (32 - 28) and the fact that it could affect the administration's need to make tough decisions was also raised in the discussion.
One suggestion from Insurance Company of the West Indies chairman Dennis Lalor was that the Government should ride the wave of goodwill it was receiving from the business community and call an election, with the hope that the results would strengthen its mandate.
President of the Private Sector Organisation of Jamaica, Chris Zacca, agreed.
Meanwhile, Bashco and Megamart CEO Gassan Azan said what was needed at this point was a frank discussion between the Government and current foreign investors to determine the best way forward. He said many of these investors who were now being sceptical had reaped profits, which they repatriated.
Stewart added that local businesses should replace "emotional investments" with "hard investments".
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