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A thought on the Air Jamaica divestment
Saturday, March 20, 2010
Dear Editor,
Economics was not one of my strong subjects in university, but I nevertheless find it stimulating. In recent times I've been toying with certain ideas as I try to make sense of the vicissitudes of economic activities taking place.
My first thought is that even though micro and macro economics are treated as separate studies they are linked to each other, much like the egg and the chicken. This link is especially noticeable when governments issue government paper.
The fact that government paper interest rates are often so attractive people find it more financially prudent to invest in them. But, as is made plain in recent times, this success is not sustainable. At best this is a legitimised pyramid scheme.
What is happening here is that the interest that the government is able to pay comes primarily from taxes collected. In other words, the money you pay as taxes comes back to you as interest payment on your investment in government paper. This, of course, happens at the expense of necessary infrastructural development that should make us a more advanced society; economic growth is nil, even though individuals may experience much improved personal fortunes; monies are just changing hands, or going to a few hands. The Jamaica Debt Exchange programme was inevitable or we'd have just another Cash Plus-like debacle, only at the macro level.
It is a pragmatic imperative that new monies enter our economy, and better so when it is the result of productive activity than through loans.
Finally, it would be based on the above considerations that I, in theory, would agree with the stance of not negotiating with the Jamaican Airline Pilots Association in the sale of Air Jamaica -- monies would be coming primarily from local sources. That would hardly help our national operating capital plight.
In acknowledgement of the sentimental value of Air Jamaica though, I don't know how seriously we have looked at leasing for a fixed period, with a view of retaking full possession or to extend the lease, based on our economic footing at the expiration date. This, doubtlessly, is easier said than done.
Charles Evans
charock01@yahoo.com
Saturday, March 20, 2010
Dear Editor,
Economics was not one of my strong subjects in university, but I nevertheless find it stimulating. In recent times I've been toying with certain ideas as I try to make sense of the vicissitudes of economic activities taking place.
My first thought is that even though micro and macro economics are treated as separate studies they are linked to each other, much like the egg and the chicken. This link is especially noticeable when governments issue government paper.
The fact that government paper interest rates are often so attractive people find it more financially prudent to invest in them. But, as is made plain in recent times, this success is not sustainable. At best this is a legitimised pyramid scheme.
What is happening here is that the interest that the government is able to pay comes primarily from taxes collected. In other words, the money you pay as taxes comes back to you as interest payment on your investment in government paper. This, of course, happens at the expense of necessary infrastructural development that should make us a more advanced society; economic growth is nil, even though individuals may experience much improved personal fortunes; monies are just changing hands, or going to a few hands. The Jamaica Debt Exchange programme was inevitable or we'd have just another Cash Plus-like debacle, only at the macro level.
It is a pragmatic imperative that new monies enter our economy, and better so when it is the result of productive activity than through loans.
Finally, it would be based on the above considerations that I, in theory, would agree with the stance of not negotiating with the Jamaican Airline Pilots Association in the sale of Air Jamaica -- monies would be coming primarily from local sources. That would hardly help our national operating capital plight.
In acknowledgement of the sentimental value of Air Jamaica though, I don't know how seriously we have looked at leasing for a fixed period, with a view of retaking full possession or to extend the lease, based on our economic footing at the expiration date. This, doubtlessly, is easier said than done.
Charles Evans
charock01@yahoo.com
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