Phillips: No godfather to rescue Jamaica from inflation crisis

Forecasting “a very turbulent and rocky economic time” for Jamaica, former Finance Minister Dr Peter Phillips has said that the Government and Opposition must put aside political posturing to prevent an already crisis-weary economy from collapsing.

Phillips said it is time Prime Minister Andrew Holness and Opposition Leader Mark Golding find common cause for a genuine meeting of the minds and for trade-offs in navigating the challenges ahead.

In a Gleaner interview on Monday, the St Andrew East Central member of parliament – who is credited for steering the nation from the brink of an economic abyss between 2011 and 2016 when he was chief steward of the country’s coffers – said Jamaica is on its own and must act accordingly.

“There are severe challenges and it makes no sense to pretend that things are hunky-dory when they, in fact, are not,” said Phillips, following a community Wi-Fi launch by the Universal Service Fund on Ricketts Avenue in Maxfield Park, St Andrew.

“The sad fact is that small countries in the Caribbean are going to have to steer their way out of this crisis alone. There’s no godfather anywhere, and I think this is something that Government and Opposition should sit down and discuss and come to a meeting of the minds about,” he added.

Phillips noted that there is “tremendous” pressure on the average Jamaican to meet expenses and insisted that the Government must rein in spiralling inflation, which rose to 11.8 per cent in April.

The Bank of Jamaica (BOJ) last month announced a sixth rate hike in months, but those interventions have not halted inflation's gallop beyond its target range of four to six per cent.

The policy interest rate, offered to deposit-taking institutions on overnight placements with the central bank, increased to five per cent per annum from 4.50 per cent.

The Private Sector Organisation of Jamaica (PSOJ) has pushed back against the increase, noting that there has been a slowdown in lending, particularly to businesses.

The PSOJ said that this could stifle investment inflows.

“Never forget that the people who suffer most when inflation picks up are the poorest and the most powerless in the country," ” said Phillips.

"We have been on that inflation roller coaster for a very long time – for decades – and we dare not allow the country to lose the benefits of low inflation."

Phillips said that the Holness administration must, at the same time, continue to sustain debt reduction.

kimone.francis@gleanerjm.com