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Be open to all economic suggestions


rhondathompson, [email protected]

Be open to  all economic suggestions

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Several ideas have emerged from the ongoing debate about the economy and the fiscal deficit, but there are some truths which may not be as self-evident as they should be and which we think should attract attention.
A sizeable cache of foreign reserves should be acquired through aggressive promotion of the export-led sectors and every effort should be directed to maintaining those reserves. That was
a main plank of Owen Arthur’s policies and given events since 2008, we would now be more completely at the mercy of our lenders and the IMF, without the large build-up of such reserves.
Another issue which has lately emerged is the impact which the psychology of political persuasion can have on the choice of political managers of the economy, sometimes with deleterious injury to the national well-being.
In Brass Tacks Sunday last Sunday, for example, Mr Reudon Eversley disclosed that he was involved in the initial stages of planning DLP strategy; and that the strategists of the DLP realising that they could not defeat Mr Arthur on the economy, decided to attack him on other emotionally-grounded matters which he says resonated with the voters.
Mr Eversley’s disclosures tell us that one party’s negative personal attack emotionally packaged, will very often defeat the straightforward and accurate claim by another party that its economic policies and programmes are better suited to the current state of the economy. According to Eversley, since “human beings are essentially creatures of emotions, if you can speak to those emotions you can essentially get what you want”. It is a sobering thought that choice of economic policy may be based on emotional influences.
As for the fiscal deficit, the consensus has emerged in favour of sustainable and not runaway deficits. In 1990-91 our deficit was in the region of eight to nine per cent of GDP; thereby rendering our dollar vulnerable to devaluation. Recently we were back at those levels of deficit. Hence our recent discomfort.
The deficit is the two-edged sword that can be used by sensitive governments to ameliorate the plight of the under privileged; and yet if mismanaged, it can cause the most serious grief with the poor and vulnerable suffering most, since the tendency is to curtail the discretionary programmes comprising most aspects of the social safety net.
Clearly something has to be done about high fiscal deficits and Mia Mottley as Leader of the Opposition has proposed that we should legislate the maximum deficit so as to protect the national economy, in a fashion similar to that of the European Union and with built-in provision for emergencies.
Such a restriction would remove some discretion from a minister of finance, and we caution that national economies cannot be managed in the manner of a company. Unlike the corporate bottom line, the public bottom line is concerned with the total national welfare.
We support the policy of small manageable deficits and understand the anxiety of those who believe that legislation is the answer to runaway deficits. The problem is that flexibility of policy has always been necessary to proper management of national economies.
The value of these public discussions in the media and elsewhere must not be lost, and we must take on board those views which will help us better to manage our affairs.

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