JMA says Iraqi war will devastate Jamaica's economy

www.jamaicaobserver.com Observer Reporter

Friday, February 21, 2003CLARKE... war will significantly increase production costs in manufacturing sector

SOME of Jamaica's top business leaders registered concern Wednesday over the "devastating" impact a war in Iraq would have on Jamaica's fragile economy.

Members of the Jamaica Manufacturers Association (JMA) also expressed distaste over the scandal engulfing Finance Minister Omar Davies, saying his remarks on pre-election spending reflected a larger problem of economic mismanagement, and underscored the need for legislation to control fiscal policy.

JMA members broke into rare and unanimous applause during a regular board meeting when JMA President, Clarence Clarke, urged that the United States achieve "peace at all cost" in Iraq and not act unilaterally.

Calling on the US to "let good sense prevail", Clarke said a war would have a devastating impact on our economic wellbeing, hurting the tourism industry and provoking a significant increase in production costs in the manufacturing sector.

Clarke said some manufacturers already have complained that their electricity bills jumped 25-30 per cent, as a result of Venezuela's oil-worker strike, and that a war would exacerbate the situation.

In addition to hurting Jamaica's economy, Clarke said the US economy and global economy would suffer, and that the economies of small developing nations would be particularly hard-hit.

Clarke joins a growing list of high-profile Jamaicans, including leaders from the People's National Party and Jamaica Labour Party, who recently have spoken out against the increasing possibility of a US-led attack on Iraq.

US officials say military action may be the only way to disarm Saddam Hussein of weapons of mass destruction that he's alleged to have, and which, they say, pose a threat to US security following the Sept 11 terror attacks. However, some members of the United Nation's Security Council argue that more time should be given to UN weapons inspectors to find weapons that Hussein denies having.

Regarding the finance minister, Clarke said the Government faced a "credibility problem" and should consider legislation to better control election budgets, campaign financing, and deficit-to-GDP ratios.

Davies had said he gave the OK to some pre-election spending so as not to give the parliamentary Opposition the edge going into the election, and that it was time to correct the problem now that the administration has been returned to power.

Clarke said such remarks were unfortunate, considering that the fiscal deficit was programmed at 4.4 per cent of GDP but has now reached 8.4 per cent.

"If we implement such laws then governance will be much more transparent, and relevant sanctions can be brought against those not complying with the regulations," Clarke said.

"We cannot leave these issues to chance or discretion."