Borrowing

Anguilla’s Government visiting London to negotiate increased borrowing power. I heard on Radio Anguilla news that Jamaica is negotiating a huge loan with the IMF. I think I heard something like $1.2 billion.

The Jamaica Observer has an interesting interview with Dr DeLisle Worrell. He deals with the issue of government borrowing. I urge you to read it. The most relevant paragraph, I thought, was:

The nature of our economies is that you have to be very careful on the nature of your fiscal spending - that you don't overspend beyond what your taxes will bring in and what you can borrow from domestic markets. If you go beyond that then you tend to create additional spending over and above what your foreign exchange earnings will support. If you do make that mistake you have to correct it fairly promptly. I think the failure of Jamaica and Guyana in particular, was that they allowed that situation of imbalances on their fiscal accounts which had very adverse and persistent effects on their balance of payments.

What do our leaders want to increase borrowing for? Is it for the big infrastructure projects due to start in 2010? I hear that several election hopes are resting on these projects providing jobs for the boys.

If so, guess who will be paying dearly in the years to come.

Perhaps I would not be so worried if they had told us what it was all about, and what the money was really for.