Business

Stop the runaway slide!

Small business body wants several issues addressed

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Friday, August 24, 2018

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The Small Business Association of Jamaica (SBAJ) yesterday called on “policymakers” to address a number of issues facing its members.

SBAJ President Hugh Johnson, addressed three primary issues hindering growth in the sector in his address to a press conference held at the association's headquarters in New Kingston, namely: consistently increasing fuel prices; the rapid slide of the Jamaican currency; and, bank fees and the their interest rate spread at the commercial banks.

He said that the government needed to address the issues promptly to avert a “FINSAC-esque implosion” within the sector.

Relating to the cost of fuel, he noted that one of the largest input cost to small business is transportation costs, and that the ever-increasing price of the product has been placing significant burden on the operations.

“Having observed the disparity in the cost of a barrel of fuel on the world market, as against the price announced weekly by Petrojam, the SBAJ is calling on the government and its regulatory bodies to investigate and intervene in the pricing mechanisms used at Petrojam and to make public the findings,” he said.

On the issue of the sliding dollar, he said that banking fees are being increased “covertly”, resulting in an erosion of small businesses' efforts to survive the challenging financial environment.

“While the BOJ (Bank of Jamaica) has been implementing measures to influence a reduction in interest rates, we are, however, not seeing comparative reduction at (financial) retail outlets,” he stated.

“As far as we can observe, moral suasion has not impacted how these financial institutions operate,” he added.

Johnson submitted that the slide in the dollar has resulted more from greed than any other factor, and has led to a crippling effect on small business operators.

“Over the last three months, we have carefully tracked the movement of the dollar by some ten per cent. This impacts our planning and operations, making business significantly difficult in this type of environment,” he argued.

He said that the SBAJ is urging the government to take whatever means necessary “to stem the runaway slide of the dollar”, which the association believes is being caused by greed for the most part.

On fuel prices, Johnson noted that one of the largest input cost to small business is transportation costs, and that the ever-increasing price of the product has been placing significant burden on their operations.

“Having observed the disparity in the cost of a barrel of fuel on the world market, as against the price announced weekly by Petrojam, the SBAJ is calling on the government and its regulatory bodies to investigate and intervene in the pricing mechanisms used at Petrojam and to make public the findings.

“Those are the challenges that we think are hurting us badly as it relates to the greed.

He said that “poorly thought out policies” by successive governments over the years have created the current situation.

Johnson also noted that the World Bank has reported that the financial sector, while being one of the least efficient sectors in the Jamaican economy, is getting “the lion's share” of the proceeds from their activities in the economy.

He said that these pointers suggest the need for a more equitable system.

“And since it is government actions which have put us here, we are expecting government action to make the playing field more level and more equitable,” he said.

Johnson was supported at the press conference by SBAJ directors Garnett Reid, who chairs the membership and public relations committee, and Bevenisha Moodie, who heads the special projects committee.

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