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?”
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