JLP says PM using war as scapegoat for sick economy

www.jamaicaobserver.comc DAVID PAULIN, Observer writer Friday, March 21, 2003

SHAW... why should we pounce on the war and use it as an excuse

FOOD shortages. Rising prices. A devastated tourism industry. Prime Minister PJ Patterson has warned that Jamaica could suffer all of these calamities as a result of a US-led war on Iraq, which he deeply opposes.

But the Jamaica Labour Party's spokesman on finance, Audley Shaw, says Patterson is playing politics with the war, and he said he is calling the prime minister bluff.

"We are not going to allow (the PNP) to use the war as a scapegoat for all the ills of the economy and mismanagement of the economy," said Shaw, who made the same point in Parliament on Tuesday.

The prime minister's warnings followed President George W Bush's 48-hour ultimatum to Iraqi President Saddam Hussein to get out of Iraq or face war.

"The heightened sense of alert, tension and uncertainty that accompanies war would erode confidence in the economy and wipe out anticipated gains from investment," said Patterson.

"Why should we pounce on the war and use it as an excuse for necessary and credible actions on the part of the Government to present a credible budget in April?" asked Shaw.

Patterson's remarks came as oil prices had plunged below the $30 mark -- their lowest in three months -- following Bush's ultimatum.

Zia Mian, an energy advisor in the Ministry of Mining and Energy, said oil supplies are in fact plentiful, and that politically troubled Venezuela had nearly ramped up production to the levels it had pumped at before a crippling oil workers strike. In recent months, Mian explained, uncertainty over Iraq had pushed up prices due to "speculative pressures" that it faced with the start of war.

After Bush's ultimatum, prices dropped $3 per barrel, he noted.

Meanwhile, Beverley Lopez, president of the Private Sector Organisation of Jamaica, said the island's business leaders "have assured us that they do not see any shortages of food stuffs because we do not do any importation from that side of the world".

She added: "The threat of war was having a worse impact than the war itself. A lot of people think a war will be short."

Both Shaw and Lopez said it remains to be seen how hard tourism will be affected by the war.

"So far, in our discussions with the Chamber of Commerce and Hotel and Tourism Association, we gather that the booking are still holding," Lopez said. "They have not had any rush for cancellations up to Wednesday."

Even if tourism does take a hit, Shaw said: "If you know what you are doing and target tourism and invest in a very specialised way, you might find that you are able to snatch victory from defeat."

Patterson is facing a bulging deficit that will close this fiscal year at about eight per cent of gross domestic product (GDP). The finance minister, Omar Davies, has pledged to swipe two percentage points in the coming fiscal year, and that will mean a combination of spending cuts, higher taxes, and more taxes.