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1997 was a difficult and challenging year, this we have not denied. Some important sectors showed growth but the severe drought, continued destruction of the manufacturing sector and the fall out in the financial sector, all combined to result in an overall decline in GDR Despite this major setback, 1997 was also a year of achievements. We continued to fight off inflation, with the figure for the calendar year being 9.2 per cent and for the fiscal year 97/98 we expect an out-turn of about 8.5 per cent. Furthermore most of the major indicators in welfare in the social sectors showed improvements. During calendar year 1997 and fiscal year 97/98, we faced and dealt with the greatest threat to the financial sector this country has ever faced. Without the benefit of one dollar of external loans we have intervened in several banks and institutions, thus protecting the savings, pensions and insurance policies of nearly two million Jamaicans. Our concerted efforts to bring stability to the exchange system and reduce inflation, have had tremendous costs, that we do not deny. But over ability to deal with the problems in the financial sector was directly related to the tough set of measures which we had implemented over the past several years. There are many more powerful economies - countries against which we have been adversely compared - which have not been able to deal with their problems, even with massive external support. Even in our situation where there are those who seemed to have wanted the sector to have collapsed. Furthermore, certain developments on the industrial scene in the last few weeks have confirmed that the message is getting through in terms of the credibility of our anti-inflation fight. The wage settlements between BNS and its workers, as well as in the sugar ' industry, should demonstrate that there is greater faith in the macroeconomic policies being pursued and a greater awareness of the need to moderate wage demands. It is the only way forward. There has also been external recognition of our achievements, best demonstrated by the rating given to us by Moody's, and to which I made reference earlier in my presentation. Economic development is a process, not an event. Even countries like Japan, with the second biggest economy in the world, are from time to time, rocked by economic crises. That we have encountered setbacks, is undeniable, but we have faced each challenge and have dealt with them as the need arose. We have not denied that there have been significant costs. The most prominent is that of the intervention in the financial sector, but the worst step we could -have taken would be to abandon the course because we have encountered some obstacles. We have a vision of an efficient competitive economy. We have been growing and creating jobs for a vibrant, healthy and educated population as we seek to create a just and more equitable society. We are clear about our medium and long-term objective which is to achieve self sustaining macroeconomic growth with increased employment as a basis for improved living standards. We have set out and implemented a clear set of strategies not only for fiscal year 98/ 99, but for the medium-term which will facilitate our achieving our objectives. The difficulties associated with the process of implementation must not cause us to abandon the road. We hear the calls of those who would pander to cheap popularism, who can find a solution to all problems in one policy initiative, but we have been down the road of devaluation before and we know the pain and grief it inflicts on those who are least able to defend themselves. We have also been down the road where we have engineered a dramatic increase in interest rate and we know it is always more costly and painful to recover from such acts rather than to stick to a path which, although longer, is showing results. I have outlined certain specific initiatives aimed at fostering economic growth. However, we must insist that these all must be credible and sustainable. We need to face frontally the problem of declining ethical standards. I wish to state once again, this Administrations recognition of the principal role to be played by the private sector in fostering increased investment and economic growth. I wish to repeat, and to state explicitly once again, the continued willingness of this Administration to work with the private sector in achieving our joint objectives. However, whilst supportive of business, there are certain behavioural patterns which we cannot, and will not accept as part of the norm. We can never accept that any member of the business community has the right to collect from employees statutory deductions, contributions to NHT and NIS and not pay them over to the proper authorities on the grounds that he is having cash flow problems. These resources do not belong to him and must be paid over as the law dictates. This Administration cannot, and will not, tolerate those operating deposit-taking institutions, or who are licensed to be security dealers and investment advisors, taking the funds of clients and using them for their own purposes. Whatever the fallout, we cannot and will not, accept this as normal business. The objectives which I have outlined in this extensive presentation are not filled with (goodies) but that was not my intention. The intention was to articulate a programme which simultaneously provides each sector of the economy with a chance to participate in the rebuilding exercise. We believe we have presented a programme for the achievement of a fiscal surplus which will be credible to investors, both domestic and external. I humbly seek the support of the entire nation as we tackle this difficult and complex task || Previous | Table of Contents ||
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