No wonder we have such poor passes in mathematics; Petrocaribe Mathematics exposes our so called financial experts

The biggest news over the last two weeks is the decision of the government of Jamaica to replace low cost debt with high cost debt.

The Petro Caribe deal has become the most intriguing  attempt at mathematical modelling, financial and economic analysis that I have ever seen .

Depending on who you listen to, whose article you read, which sets of financial calculation you follow and what mathematical models is used and various assumptions considered you get either a good deal financial or a bad deal.

I continue to look on in amazement and then came to the conclusion  that I know have the answer to why Jamaica does not seem capable of growing or moving forward.

The answer is we do not know what the heck that we are doing  and why do I say this.

What was supposed to be a simple deal has become a financial and mathematical nightmare as the major players all seem to arrive at very different position using the exact set of numbers.

The numbers are simple

  1. Debt amount is A
  2. interest rate is B
  3. Coupon Payment is C
  4. Tenor is D
  5. Debt being replaced is E
  6. interest rate on debt being replaced is F
  7. Tenor of debt being replaced is G

How on earth that with all the above being known and with the known financial models that are available we cannot seem to determine if this is a good or bad deal.

UWI, UTECH, UCC have a bunch of people lecturing in finance, mathematics and economics, where are their voices, why have we not heard from them, is this not part of what we should expect from our professors  or is that too much to ask ?

Depending on who you speak with the deal is either bad or good and I am flabbergasted that if such a simple mathematical model cannot be used to determine if this deal is a financially sound one and will bring forth economic good output, how the “F” can we expect to fix this countries more complex matters.

If the powers that be cannot go into a deal and determine if its financial sound and show the mathematics done to prove it it so, can we really depend on them to come up with policies and programs to grow this dying economy ?

Mathematics is an exact sciences it is either wrong or right, there is no in between, but the numbers being used must be correct.

Can we really expect to get good passes in mathematics if we cannot crunch simple numbers to determine if we have a good or bad “investment”.

I am not very optimist about any numbers I now hear from either the government, opposition or any talk show analyst, frankly I am pissed with all of them and now is convinced that I have no idea where we are headed, with all these  f%$#%ed up numbers being banded about.

We hear the debt to GDP/Ratio will fall by

  1. 10%
  2. 9.5%
  3. 8.1%
  4. x %

Which one is correct, well that depends on which numbers you use and here we go again

  1. Petro Caribe debt is not included in the BOJ/MOF Debt/GDP ratio
  2. All the Petro Caribe Debt is included in the IMF Debt/GDP ratio
  3. Only $0.8b of the Petro Caribe Debt is included in the IMF Debt/GDP ratio
  4. For 1 – 3 the Debt/GDP ratio is a different number.

So we do not even know what the  …… we are using as the starting point, to determine where we are going and explains why we continue to end up where we do and then wonder how on earth did we get here.

Dominica Republic concluded such a deal without much fanfare and controversy , so why do we have to be such a SCREW UP here in Jamaica !!!

SMH

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