Mitchell calls for pegging of J$ to the greenback

BY HORACE HINES
Observer staff reporter

Wednesday, April 17, 2019

Print this page Email A Friend!


MONTEGO BAY, St James — Arguing that devaluation is a curse, President of the Private Sector Organisation of Jamaica (PSOJ) Howard Mitchell is calling for the fixing the exchange rate of the Jamaican currency to its US counterpart.

“...So from Montego Bay, I am calling for the Jamaican dollar to be pegged to the US currency. I am calling for it from Montego Bay because Montego Bay has the most experience with dolarisation. We can teach Kingston. I want to abandon this fiction of a managed exchange rate in our open, fragile economy,” Mitchell appealed.

He added: “In any event our middle class economy is already dollarised. Much of our real estate is rented and sold in US denominator terms. Our major trading arrangements are with partners who either are in the United States or accept US dollars. Much of our economy is in fact, foreign owned. And that's why it is important, ladies and gentlemen. You see these sways in demand because people repatriate profit and repatriate dividends, they repatriate it to all where they don't live.

“And let us face reality, I don't know why we are imagining this basket of currencies when the basket of currencies is the US dollar and the English pound.”

Mitchell argued that the 1969 abandonment of the Jamaican pound, which was pegged to the UK pound, has since resulted in a dreadful effect on local spending.

“We have been visiting hellfire and damnation on our poor people, on our fixed income earners, on our pensioners, on our struggling manufacturing sector-all because of some maladjusted sense of misplaced pride,” he pointed out.

He questioned: “Can anybody offer me any rational explanation why we continue to pretend that we can successfully operate a foreign exchange management programme in an economy as open to externalities as Jamaica?”

He lamented that recently the local currency continues to slide even in the peak of the tourism season and after interventions from the Bank of Jamaica.

“The fact is today in the height of the tourist season when dollars are flowing, and in spite of BOJ intervention on at least two occasions, maybe three, the dollar is hovering at about 132, 133 coming from 125 in a matter of 12 days,” he pointed out.

“Which small business do you know can pay back a debt on a particular day and the dollar move six per cent on him? Six per cent is a whole heap. So that it's fine to tell me that over the past two years the variance has been only two per cent. Over the last two years I am dead.

“Ladies and gentlemen I submit that dolarisation is an appropriate strategy today, especially because we in Jamaica have come to grips with our fiscal challenges. We know what they are, especially because our confidence is high and our commitment is certain.”

The PSOJ president argued that his views will not go down well with the Bank of Jamaica (BOJ) or economist Dr Damien King, but insists that the time has come and that the PSOJ is fed up with the devaluation of the local currency.

“I know that Dr Damien King is going to have kittens or maybe cows and the Bank of Jamaica will throw thunderbolt at my head, but I am choosing the Republic of Montego Bay to make this call. We are tired of devaluation, we are tired of a volatile dollar. We do not have confidence in the management of our exchange rate and our small businesses and our poorer citizens have had enough of this brutal and unnecessary uncertainty and erosion of their finances.

“Devaluation is a curse, it is a self-imposed albatross around our neck and it is time that we face that reality.

As the noted economy and former Central Governor Delisle Worrell has explained, “the erosion of the external purchasing power of domestic money that comes with a devaluation comes with a devastating impact on domestic savings habits”.

Mitchell was speaking at Jamaica Manufacturers and Exporters Association's (JMEA's) Jamaica International Exhibition (JIE) Breakfast at the S Hotel in Montego Bay, yesterday.

The JIE 2019 will be staged at the Montego Bay Convention Centre from May 30 to June 1.

JMA President Metry Seaga who noted that currently 80 exhibitors and more than 140 buyers from the USA, Canada, UK, the Caribbean have already indicated their participation in JIE, invited more local manufacturers to hop on board.

“This is not a joke. The Jamaica Manufacturers and Exporters Association (JMEA) does not execute an event unless we see the significant impact it will make to those who participate. So, I implore you, if you have not signed up, this is one trade show you don't want to miss out on. Make sure that you are present at the Montego Bay Convention Centre on May 30th to June 1st,” Seaga implored.


Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at http://bit.ly/epaperlive


ADVERTISEMENT




POST A COMMENT

HOUSE RULES

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy



comments powered by Disqus
ADVERTISEMENT

Poll

ADVERTISEMENT
ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT