International financial analyst Carl Ross believe the Jamaican economy is on the mend and that to solve the financial problems policymakers need only implement measures already in place.
Ross, the managing director for investments at Oppenheimer & Company Inc, was referring to current tax reforms that are being undertaken, the existing relationship with the International Monetary Fund (IMF), a good relationship with the fastest-growing economy, China, and other fast-growing emerging markets, a debt-management strategy which sees the Government refinancing its debt at lower interest rates and the availability of human capital.
"The policy prescriptions for Jamaica are kinda like on paper already," said Ross, whose firm co-sponsors the annual JSE investment and capital markets conference that concluded Thursday in New Kingston.
"I think the challenge for this new Government is implementation. I think a lot of the solutions are already there. I think we can be fairly optimistic about Jamaica's future," Ross said at the conference opening Tuesday night at The Jamaica Pegasus hotel in New Kingston.
"It is just a matter of putting everything together," said Ross. "I don't know what the solution is, but I do know that the strategies are out there."
Jamaica experienced marginal growth in 2010 in what remains a fragile recovery exposed to developments inside the Eurozone and the United States.
Ross said the country is "doing well" compared to others, such as those in the Eurozone.
This, he said, is illustrated by the fact that "yields are low and credit rates are very strong", as well as the country being able to maintain a primary surplus. The "balance sheet recession" that saw world economies on the brink of failure is going to take time to repair.
"We can't raise taxes in an economy that is not growing. That would be deflationary," said Ross.
Additionally: "Repairing the banks' balance sheet requires banks cutting cost, which generally requires shrinking the balance sheet and restraining credit, which are deflationary," he said. "Repairing household balance sheets requires saving more, spending less, and try doing that when you are out of a job."
For recovery to be achieved, it is therefore left to policymakers to try to cushion the impact of the "deflationary impact" on the institutions' balance sheets in an attempt to repair them or at least ensure they do not deteriorate, the analyst said.
Global recovery can be expected to continue to be slow and marginal, reinforced by the IMF's January downward revision of global growth projection down from four per cent to 3.3 per cent for 2012 and from 4.5 per cent to four per cent for 2013.
Even though the global economy is plagued with uncertainty, Ross believes that Jamaica is "moving along decently".
"Look at Jamaica compared to Greece. Jamaica managed to take interest rates down to low levels compared to Europe, where interest rates actually went up," he said.
"It is up to the policymakers to implement the solutions they already have on paper."
marcella.scarlett@gleanerjm.com