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FINSAC saved Jamaica
Sunday, July 27, 2008
Dear Editor,
Recently, Dennis Johnson wrote a brilliant letter to the Observer with regard to FINSAC, and I would like to add to his comments that history will judge former Finance Minister Omar Davies and the creation of FINSAC under his watch.
Despite the emotional attachments associated with and/or any allegations of cronyism about FINSAC (which is understandable), people with vision and those at the policy-making level would probably by now understand that Omar Davies was a brilliant tactician, and history will confirm that FINSAC was the best instrument that saved the Jamaican economy from a "tsunami effect" in the late 1990s.
Back then, I admired Seaga, who was in opposition, on most levels; and he too knew that Davies was right (at least this is my assumption).
There were several things that happened at the same time, or within a 12-month period, globally while the FINSAC saga was unfolding: the East Asian Tiger Economies went through a financial shock, the Russian rubble sent the economy into a whirlwind, Brazil had a currency crisis and the Europeans, having just emerged from their meltdown in the early 1990s, were on the verge of adopting a single currency.
Jamaica withstood such stealth force wind of the then various financial crises simply because the financial wind travelled across the Atlantic and was slowed down in the northern part of the region due to creation of FINSAC.
It is not obvious now, since very few people are engaged in long-term visions which are for the better of society. In the current administration of Bruce Golding there are some policy issues that I have found favour with, but those very policy issues can be blown away with the wrong handling of a FINSAC enquiry (politics can rear its ugly head). The JLP seems to need the advice of perhaps one of its stalwarts on economic and financial issues - a former prime minister who now acts in an intellectual capacity at UWI. While the former prime minister had a few "financial gaffes" with Finsac, that was simply the human in him, as in all of us. When you gamble (which is essentially any form of financial transaction) you either win or lose, but Seaga is no fool on policy issues. FINSAC may turn out to be the downfall of the current administration, though it might not be obvious to them at the moment.
FINSAC, by and large, has been examined at the academic level in various schools globally (ask Damien King at UWI, Mona who has made a few contributions) and to some extent was adopted in some form by other nations that had later experienced "financial shocks". Though Jamaica, which has one of the most open economies in the world, grew dismally in the 1990s (and the popular argument here is due to failed economic policies of the then government), the financial cyclone which started in East Asia and spread to South America was unable to make a landfall in Jamaica (and the wider Caribbean). My explanation for this is due to the fact that Davies, having realised that some policies were not perhaps best implemented and the failure of the then powerful financial houses (mutual societies, investment banks, insurance companies) which performed badly and in some cases were criminally wrong, managed to "shutter" up Jamaica with FINSAC and as such history will deem Jamaica's structural adjustment policy as the foundation that saved the Jamaican dream since 1962.
P Sean Morris
Helsinki
Finland
Sunday, July 27, 2008
Dear Editor,
Recently, Dennis Johnson wrote a brilliant letter to the Observer with regard to FINSAC, and I would like to add to his comments that history will judge former Finance Minister Omar Davies and the creation of FINSAC under his watch.
Despite the emotional attachments associated with and/or any allegations of cronyism about FINSAC (which is understandable), people with vision and those at the policy-making level would probably by now understand that Omar Davies was a brilliant tactician, and history will confirm that FINSAC was the best instrument that saved the Jamaican economy from a "tsunami effect" in the late 1990s.
Back then, I admired Seaga, who was in opposition, on most levels; and he too knew that Davies was right (at least this is my assumption).
There were several things that happened at the same time, or within a 12-month period, globally while the FINSAC saga was unfolding: the East Asian Tiger Economies went through a financial shock, the Russian rubble sent the economy into a whirlwind, Brazil had a currency crisis and the Europeans, having just emerged from their meltdown in the early 1990s, were on the verge of adopting a single currency.
Jamaica withstood such stealth force wind of the then various financial crises simply because the financial wind travelled across the Atlantic and was slowed down in the northern part of the region due to creation of FINSAC.
It is not obvious now, since very few people are engaged in long-term visions which are for the better of society. In the current administration of Bruce Golding there are some policy issues that I have found favour with, but those very policy issues can be blown away with the wrong handling of a FINSAC enquiry (politics can rear its ugly head). The JLP seems to need the advice of perhaps one of its stalwarts on economic and financial issues - a former prime minister who now acts in an intellectual capacity at UWI. While the former prime minister had a few "financial gaffes" with Finsac, that was simply the human in him, as in all of us. When you gamble (which is essentially any form of financial transaction) you either win or lose, but Seaga is no fool on policy issues. FINSAC may turn out to be the downfall of the current administration, though it might not be obvious to them at the moment.
FINSAC, by and large, has been examined at the academic level in various schools globally (ask Damien King at UWI, Mona who has made a few contributions) and to some extent was adopted in some form by other nations that had later experienced "financial shocks". Though Jamaica, which has one of the most open economies in the world, grew dismally in the 1990s (and the popular argument here is due to failed economic policies of the then government), the financial cyclone which started in East Asia and spread to South America was unable to make a landfall in Jamaica (and the wider Caribbean). My explanation for this is due to the fact that Davies, having realised that some policies were not perhaps best implemented and the failure of the then powerful financial houses (mutual societies, investment banks, insurance companies) which performed badly and in some cases were criminally wrong, managed to "shutter" up Jamaica with FINSAC and as such history will deem Jamaica's structural adjustment policy as the foundation that saved the Jamaican dream since 1962.
P Sean Morris
Helsinki
Finland
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