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Tuff Gong
03-17-2006, 11:55 PM
Minister of Finance should not be required to be a member of Parliament - Perkins

Al Edwards
Friday, March 17, 2006

Largely because of the serious challenges the Jamaican economy faces, the high debt to GDP ratio and the gargantuan task of spurring more growth, the Minister of Finance and Planning at this point in time should not be required to be a member of Parliament.

So said the President and CEO of Pan Caribbean Financial Services (PCFS) Donovan Perkins yesterday at an economic seminar breakfast hosted by PCFS at the Terra Nova Hotel in St Andrew.

With Portia Simpson Miller now the Prime Minister-Designate the question is who is she likely to choose as her Minister of Finance? The economic plight of the country demands that this may well be Simpson Miller's most important Cabinet selection decision, one requiring a great deal of consideration.

Dr Omar Davies has held the position for twelve years and while he is perceived as a very capable Chancellor, the economy remains in a quagmire of inertia, debt, high interest rates and stagnant growth.

Perkins declared: "I would like to recommend that this year. 2006, we remove from the Constitution of Jamaica the requirement that the Minister of Finance be elected to Parliament."

"I say this because, certainly for the next decade or more, Jamaica's serious challenges will remain. I think for the country to be able to address these challenges, the Office of the Minister of Finance and Planning, the most powerful minister in the Cabinet should be 100 per cent focused without any distractions on matters of: economic growth and development, debt policy and debt management, tax policy, public sector reform and development of our domestic financial markets."

Perkins added that Jamaica's circumstances do not allow it the luxury of having a critical resource like the Minister of Finance focused on managing a constituency.

"Jamaica must adopt a catch-up mode, and when you are behind in a football game, you need your striker up front. full-time.. undistracted.getting the job done because we want to win the game," said Perkins.

The President and CEO of PCFS made it clear that this was not in any way a criticism of Dr. Omar Davies and that under the constitution it is mandatory that he should represents constituency. As such he has an obligation to the people of his constituency to represent and protect their interests.

Grim economic news

The national debt now stands at J$830 billion and Jamaica has one of the world's highest debt to GDP ratios at 132 per cent. In 1985 it reached as high as 216 per cent .According to World Development Indicators GNI per capita stands at US$2,700 with a GDP of US$8 billion.

STATIN recorded an inflation rate of 12.9 per cent between January 2005 to January 2006.

External trade imports came in at US$379 million in November 2005 while external trade exports registered US$135.4 for the same period.

The Planning Institute of Jamaica (PIOJ) is forecasting an economic growth rate of 3.3 per cent for this year.

The return of Edward Seaga

It has been mooted that Edward Seaga could return as Minister of Finance. This would indeed be a bold move by Simpson Miller and would be in keeping to some degree with Perkins' thinking.

In choosing a Cabinet it would give her options and create a precedent by crossing the party divide. Seaga is credited as being one of the best finance ministers of Jamaica over the last forty-three years. During his tenure between 1967 to 1972 he helped to develop local financial institutions including the Jamaica Development Bank and supervised the transfer of foreign-owned companies to local ownership.
He still is an advocate of fiscal discipline and free market policies. His understanding of the Jamaican economy is considerable and the notion of returning in that capacity is not inconceivable.

Portia Simpson Miller may well gain political capital out of such a move, as it would pit Seaga against his protege Bruce Golding- rather like Anakin Skywalker taking on Obi-Wan Kenobi. This could divide loyalties and diminish the effectiveness of the Jamaica Labour Party.

The Prime Minister-Designate has cited Seaga as an influence which bodes well for a working relationship.

Questions remain about Seaga's age and frailty but his intellectual capacity remains undiminished. If a ten to fifteen-term strategy were to be implemented then he could shepherd it in for the opening four to five years without having the distractions of constituency obligations as Perkins points out.

Minister of Finance should not be required to be a member of Parliament - Perkins (http://www.jamaicaobserver.com/magazines/Business/html/20060316T200000-0500_100754_OBS_MINISTER_OF_FINANCE_SHOULD_NOT_BE_ REQUIRED_TO_BE_A_MEMBER_OF_PARLIAMENT___PERKINS.as p)