the whole issue of devaluation

[Assasin]

in economic terms devaluation should make the exporters make more profit and export more while import becomes more expensive and we import less.

My question is why haven't our economy export more over the years? If they are not exporting more and importing more then may as well we revalue the dollar??

I would like to take the politicans and business sector to task about this.

[Don1]

in economic terms devaluation should make the exporters make more profit and export more while import becomes more expensive and we import less.

My question is why haven't our economy export more over the years? If they are not exporting more and importing more then may as well we revalue the dollar??

I would like to take the politicans and business sector to task about this.

Answer: The politico-business elite class is riddled with myopia, corruption and lack of focus on national development (as a result of excessive tribalism)

Standard economic doctrines like a devaluation fueled export drive...will not work well in our current dysfunction.

This is why a focus on "growth" in our dysfunctional system is putting the cart before the horse.

Jamaicans have yet to awaken to the reality that the imperative of these times is REFORM.

Tribalists Rule.

Dun talk.

[Islandman]

Economics is never that simple.

A whole heap of other variables are always at play including govt policy (interest rates, etc) , efficiency, labour force skill level, etc.

[Don1]

in Jamaica our dysfunctional sociology trumps all...

[Assasin]

So then it would have been better if we had a fix rate of say 20-1 then?

We would have less debt, same amount of export, less inflation.

The problem is in 10 years we devalued by from 5.50 to 70-1 and instead of increasing export we actually decreased??? It does show that we thing have to change drastically.

[Gamma]

true, importers who bring in goods at a certain cost given the value of the dollar at the time may complain but strictly speaking i don't see why, as it will now take less J$ to repay those USD debts.

on the other hand, if someone borroed to pay in JA$ then while the iominal figure of the J$ will remain the same it will likely have cost them more when the dollar was weaker.

either way, a strengthening of the $ is of more benefit than either stagnation or devaluation in the medium to long term.

[Assasin]

But is we importing more as the dollar devalue which is against the grain of economics. If we were importing less it would have been worth the pain but.........

[Don1]

LoL! I guess you don't understand the Jamaican puzzle... It did take me quite a while so...hush

how lang unnu aggo puzzled??

Sheesh!

really dun talk now...unnu cyan gwaan wid di why dis an why dat nuh appen..

[Assasin]

It is not a matter of understanding, but a matter of action and going against it.

First thing is you notice how since Walker at Customs import drop and more duties are been paid??

the fact is most Jamaicans don't understand the very simple economics.

[Islandman]

I thought we have already been down that road? You forget?

If you fix the rate to an artificial level and dollars are scarce, then you get an unofficial market (black market) that sets the true rate. Plus you turn people inna criminal because them have to buy on the black market to run them business.

BTW we did not devalue the dollar, the dollar devalue itself because of supply and demand.

[Don1]

dis haff nutten fi duh wid Walker.

If the social relations are rotted due to tribalism & myopia...yuh cudda deal... not much aggo gwaan fi wi

nuh amout ah IMF money an passing fi dem tes whey unnu love talk bout ah guh duh much fi wi

if yuh fix di social relations...plug in any system...it will wuk betta dan di fooliniss ah gwaan now..

Without vision the people shall continue to perish...

[Assasin]

but if we talk about the supply and demand route then why is less of our goods at a cheaper price is not demanded? Another question is why are all these consumer goods are demanded??? when foriegn goods are suppose to be more expensive.

Don't get me wrong these maybe simple answers but we need to take the politicians to task and demand more from them all.

[Islandman]

Are our goods cheaper than the competition? That is ultimately what is comes down to. Our dollar may be weaker but our companies have a lot of unnecessary overhead.

Security costs, tiefing, overpaid and underproductive management, etc etc. There are many products that we produce or used to produce that the imported product is cheaper for these and other reasons.

Exchange rates fluctuation can't fix those things. We have to find real solutions. But yes that is the job of the govt, to come up with practical solutions.

[Assasin]

It is more complex than that.

Politicians give their friends waiver on stuff we can produce and therefore flood the market and not charge any duties on it so it affect our producers.

Then there is the whole wide scale corruption in customs which allow people to import and evade duties so they can undercut our producers.

An example of this is water. At one stage 90 of bottle water was imported. How could that be? when people bottle pipe water in America and we have FREE steam water running in Jamaica? They have pay import duties and Jamaican don't. If it cost too much to make plastic bottle then sell it in plastic bag to rhatid.

Also the recent clamp down of customs with the fake cigarettes, the import of goods to wholesales and the car dealer should show you a whole lot, that not only are they not paying taxes but some companies are competing unfairly and how do local producers compete with them?