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If the stimulus package is to work...
Wednesday, February 04, 2009
The economic stimulus package unveiled last year-end by the Bruce Golding administration has tremendous potential for helping Jamaica out of the global crisis we are experiencing.
We at the Jamaica Observer need go no further than the testimony of our own chairman, Mr Gordon 'Butch' Stewart, who willingly shared the results of his use of the tax breaks offered by the plan to the tourism industry, in respect of the Sandals chain of hotels.
Mr Stewart said that his hotels in Jamaica had pumped the money retained through the tax break into an intense advertising and marketing campaign, utilising many of the big United States networks to push Jamaica and the tourism industry. It has paid big dividends, with brisk room occupancy in January and with February expecting, to use a Jamaican phrase, "room full, hall full, caan get a spoonful".
Very critically, Mr Stewart appealed to all beneficiaries of the stimulus package to ensure that the money is put to good use in the interest of the country.
We would like to go further by suggesting that the state's monitoring agencies do not wait on beneficiaries to do what is right but to make periodic checks to see that the money is being spent for the purpose it was given.
In the grand scheme of things, the stimulus package - $6.4 million in loans and 4.5 per cent of GCT allocated to the tourism sector to help with cash flow and $4.5 million toward small businesses - is a small one, especially seen in the light of the US package which is US$888 billion. But we are not the US economy, and if used wisely it can make a difference, especially with a bit more creative thinking.
Everyone knows and understands that the tourism industry was chosen for immediate benefits because of its volatility and vulnerability and its overriding importance to the economy. To get a complete picture of the situation, one needs only look at the fact that the currency of Jamaica's biggest tropical tourism competitor, Mexico, has devalued by 40 per cent!
But we believe that Jamaica could get more out of the stimulus package if it were extended beyond the tourism industry, to areas such as manufacturing, commerce, agriculture, the entire export sector as a matter of fact. And the tax breaks should be widened to include import duties for the export sector, which is entirely under great stress.
If the finance ministry feels skittish about giving import duty breaks, it might consider a trial period of say three to six months and then review it to determine if it is having the desired effect of jolting the economy forward.
We have not yet received a report from the administration on how the package has been working, but we remind Mr Golding of his pledge to help workers who have lost their jobs and borrowers who are having difficulty making their mortgage payments. Since the unveiling of the package in December, the jobless figures have climbed steadily and are continuing to climb.
We all have a vested interest in a stimulus package which works for us at this critical time of need.
Wednesday, February 04, 2009
The economic stimulus package unveiled last year-end by the Bruce Golding administration has tremendous potential for helping Jamaica out of the global crisis we are experiencing.
We at the Jamaica Observer need go no further than the testimony of our own chairman, Mr Gordon 'Butch' Stewart, who willingly shared the results of his use of the tax breaks offered by the plan to the tourism industry, in respect of the Sandals chain of hotels.
Mr Stewart said that his hotels in Jamaica had pumped the money retained through the tax break into an intense advertising and marketing campaign, utilising many of the big United States networks to push Jamaica and the tourism industry. It has paid big dividends, with brisk room occupancy in January and with February expecting, to use a Jamaican phrase, "room full, hall full, caan get a spoonful".
Very critically, Mr Stewart appealed to all beneficiaries of the stimulus package to ensure that the money is put to good use in the interest of the country.
We would like to go further by suggesting that the state's monitoring agencies do not wait on beneficiaries to do what is right but to make periodic checks to see that the money is being spent for the purpose it was given.
In the grand scheme of things, the stimulus package - $6.4 million in loans and 4.5 per cent of GCT allocated to the tourism sector to help with cash flow and $4.5 million toward small businesses - is a small one, especially seen in the light of the US package which is US$888 billion. But we are not the US economy, and if used wisely it can make a difference, especially with a bit more creative thinking.
Everyone knows and understands that the tourism industry was chosen for immediate benefits because of its volatility and vulnerability and its overriding importance to the economy. To get a complete picture of the situation, one needs only look at the fact that the currency of Jamaica's biggest tropical tourism competitor, Mexico, has devalued by 40 per cent!
But we believe that Jamaica could get more out of the stimulus package if it were extended beyond the tourism industry, to areas such as manufacturing, commerce, agriculture, the entire export sector as a matter of fact. And the tax breaks should be widened to include import duties for the export sector, which is entirely under great stress.
If the finance ministry feels skittish about giving import duty breaks, it might consider a trial period of say three to six months and then review it to determine if it is having the desired effect of jolting the economy forward.
We have not yet received a report from the administration on how the package has been working, but we remind Mr Golding of his pledge to help workers who have lost their jobs and borrowers who are having difficulty making their mortgage payments. Since the unveiling of the package in December, the jobless figures have climbed steadily and are continuing to climb.
We all have a vested interest in a stimulus package which works for us at this critical time of need.
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