What we all feared with the return of the PNP to power has started to manifest itself. The J$, which has been losing value with respect to the US$ has closed at the lowest value it has traded in at least two years. Today it takes an average of J$88 to purchase US$1.00 and has truly signaled the return of the PNP to power.
Under past PNP administration, the government had embarked on a devaluation policy, which only served to increase the cost of goods and service to Jamaicans and made the life of Jamaicans so much harder.
Given this recent devaluation , which is expected to continue and the recent imposition of GCT on a number of previously exempted items along with the increase in the GCT on electricity, it will no doubt result in significantly levels of upwards prices adjustments for Jamaican consumer in particular the poor. It appears as if everything ” tun up for real”.
The former PNP administration sought to use a high interest rate policy to defend the value of the Jamaican dollar, which moved our interest rate to dizzy heights. Can we say this is Deja Vue? Are we returning to where the PNP left off in 2007, when they were booted from office.
No doubt this will all lead to higher levels of inflation, which will lead to higher prices , which leads to higher wage demand, which leads to more inflation and the deadly cycle repeats itself.
I am now more than ever convinced that the PNP government does not know how to function in an market driven economy and their constant bungling has only served to make Jamaica the biggest pan handler in the entire Caribbean.
Can we truly say, this is what we voted for, is this really better than what existed before?
Historical exchange rates 1971 – May 2012.
Exchange rate 2007 to May 2012.