Pubdate: Sun, 25 Jul 2004
Source: Jamaica Gleaner, The (Jamaica)
Copyright: 2004 The Gleaner Company Limited
Author: Dawn Ritch
Bookmark: (Decrim/Legalization)


I am told by residents that Runaway Bay is like a ghost town and 
construction has virtually stopped in Montego Bay.

The size of the drug and money laundering trade in Jamaica is immense. A 
source in the financial sector told me that a cambio in a north coast town 
which was recently shutdown had an annual turnover of US$4 billion.

I believe that naturally-occurring and mind-altering drugs and narcotics 
should be legalised. They ought to be regulated and sold like alcohol. 
There is no power on earth that can prevent man wanting to and achieving a 
state of altered consciousness by ingesting something or other. The oldest 
alcohol known to man was mead (made from honey). Ancient Egyptians got 
drunk on it, and there is no evidence to suggest it affected the building 
of the pyramids one way or another. Or notably anything else for that matter.


Pre-Colombian Indians in the western hemisphere have been chewing fresh 
leaves and smoking dried ones since time immemorial. Today's governments 
can find much better ways of spending taxes than fighting a war against 
drugs, which they can never win. Nor can they outspend their protagonists.

The amount of money involved in the trade is phenomenal. I couldn't believe 
the size of the homes shown on television as belonging to alleged drug 
dons. Those weren't homes, they were hotels. Nor could I believe the fleet 
of luxury cars, SUVs and pick-ups being driven out of each, to be 
impounded. At 200 per cent duty a Cadillac Escalade costs about $18 
million. In Jamaica they are now almost as ubiquitous as handcarts. And 
bear in mind it costs at least $5,000 a week to fill the tank.

People who have a brand-new Lexus, Escalade, Range Rover and Toyota Land 
Cruiser as well as a house that looks like a hotel, make the rest of us 
look like we're not even trying. No matter how industrious we are, or how 
much we save, these people make us look like wasters. For most of us, 
honestly-earned money is much harder to find, and insult is added to injury 
when it is made to look like a drop in the bucket.

In the meantime any necessary and continuing interdictions, may well cause 
a slowdown in residential construction islandwide as well as a decline in 
employment. No more car wash and other privately-owned and managed 
crash-work programmes for 'de yute' in the towns.

Rural hardware stores will be hardest hit, and those who are masons and 
carpenters. The Realtors' Association reports that over the last few years 
there has been an appreciation in real estate values of as much as 30 per 
cent. A housing lot in Barbican costs between $8 million and $9 million, 
which I'm told is nothing if you intend to build a $40 million house on it. 
Indeed $60 million houses are not uncommon, and a friend in construction 
said he saw a $150 million one where the retaining walls alone were more 
than half the cost of the house.

A three-bedroom townhouse in Manor Park goes for $30-million. Recently a 
lot of cash has been chasing upscale homes. But if the crack-down on drug 
kingpins continues that money will cease to continue to contribute to the 
growth in the economy, and provide well-needed jobs to the construction sector.

Even remittance flows will decline. New drug lords always step in to fill 
the shoes of drug lords who are arrested. But there is bound to be a 
time-lag. This means that if the Government keeps them out of action, then 
there will inevitably be a blip, however temporary, in the country's 
remittance flows.

Experts say that as much as 50 per cent of the Jamaican economy is 
informal. While we are accustomed to saying "Thank God for the informal 
economy, or we would have sunk already", that economy is really a parasite 
upon the real one. It pays no duties and taxes, and it rents no offices. It 
has no overheads, barring weaponry as a result of the trade being relegated 
to the criminal realm. The full brunt of state expenditure is therefore 
borne by the legal economy, which is fast shrinking as a percentage of the 
whole. Naturally the bigger the informal economy in a country, the weaker 
the economy as a whole.

The Economist reports that worldwide those countries with higher rates of 
tax and duties have larger informal economies. The one is the primary cause 
of the other. Dr. Omar Davies, Finance Minister, has recently been saying 
how pleased he is with the performance of the Jamaican economy. He claims 
to be paying down the debt that keeps on rising. At the end of January 
2004, the country's total debt stood at J$680.6 billion, and five months 
later that figure has escalated to J$709.7 billion. Not surprisingly he has 
no money for social services. This is incredible, coming from someone who 
has "presided over the development" in Jamaica of a bandooloo economy.

All talk of widening the tax base is effectively an attempt to fool the 
market vendor into registering for something or other. Then, like the rest 
of the real economy she will end up paying painful rates for services that 
are largely non-existent. Since most sidewalk vendors and self-employed 
persons are smarter than the Minister of Finance thinks, there is unlikely 
to be a significant widening of the tax net in Jamaica. Only the Patterson 
regime thinks itself in a position to countenance expenditure without 
benefit. The rest of the population does not enjoy that egregious luxury.

This Government has depressed the legal economy with extortionate rates of 
taxes, and fiscal policies which create abnormal bulges of mega prosperity 
with very little benefit to production in them. This is the context in 
which they are removing the drug income of illegal breadwinners in 
countless families across the country. If this is successful it will have a 
devastating impact on the economy in the short term.

Nothing the Government does is ever an unmitigated success. Let us hope 
therefore this is not something we need to fret about.
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MAP posted-by: Terry Liittschwager