During the very active and challenging period of my life in Jamaica over 40 years, I have often expressed unconventional views on matters of public interest.

Interestingly, the leadership of the private sector was at the forefront of commentaries, especially in the 1970s, which led to the formation of the Private Sector Organisation of Jamaica.

Among the notable leaders I can think of, for example, were Carlton Alexander, Aaron Matalon, Charles Henderson-Davies, Winston Meeks, Winston Mahfood and Douglas Vaz.

Since the domestic financial sector collapsed, and ownership and the leadership was replaced by overseas interests, there has been a deafening silence from Jamaica's private sector on pronouncements that could be construed as being controversial, especially during the period of the last regime.

That is one of the very real costs of obliterating the domestic financial sector. It is as though a message has been sent: 'Be careful or you too will get crushed!'

Resurfacing the debate

Once again, I feel it is timely to put some controversial thoughts on the table for public discussion. Let us dare to think outside the box as Jamaica faces its biggest challenge yet for economic survival since political independence.

Jamaica's troubled economic story is well known. The bauxite/alumina industry has collapsed; overseas remittances have fallen and will continue to decline; tourism is under tremendous pressure to hold and survive, and earnings will certainly fall; the trade deficit is worsening; and profit remittances from Jamaica, especially from the banking and financial sectors, are increasing significantly and putting pressure on the balance of payments and the exchange rate.

There is no end to the debt problem as the fiscal deficit worsens. Indeed, Jamaica's debt rating has been downgraded, which makes it more difficult to raise more money overseas from private capital markets. Businesses are closing and unemployment is steadily increasing.

Because of the critical nature of all of these factors, it is difficult for Jamaica to survive the present crisis without major economic and social disruption.

New thinking on fundamental policy matters then becomes necessary. Following are three major new initiatives that move away from minimal policy adjustments of the status quo to what might be construed as fundamental policy changes on how we tackle our problems.

Debt problem

First, is the debt problem. In an article written on October 31, 2008 and published in The Sunday Gleaner, I called for a restructuring of the domestic debt. With the escalating financial crisis worldwide the debt problem is now far more serious. Jamaica's foreign and domestic debt have to be restructured.

How we go about it is too technical a discussion for this article. But it should be put at the top of the agenda with the highest priority. Unless we restructure the entire debt portfolio, the country will be put through a trauma never experienced before. The World Bank and the entire international community seems receptive to new initiatives and, as President Obama has said,: "This is the moment"!

Whether we do so on our own or use a regional (CARICOM) approach is a matter of strategy.

There could be advantages in going the CARICOM route. The recent Heads of Government meeting was a timely opportunity for the Caribbean to put this on the international agenda and to move speedily for a resolution.

I suspect, however, that there will not be the sense of urgency at the CARICOM level. If so, Jamaica cannot afford to wait on the CARICOM bureaucracy and politics and will most likely have to act on her own where the debt problem is defeating any chance of economic success.

Fiscal problem

Second, is the fiscal problem. Progress will automatically be made once the total debt is restructured with longer maturities and lower debt payments.

But that will not be going nearly far enough. Greater prioritisation of expenditures is needed as the size of the budget is reduced.

For example, I cannot see the urgency for the University of Technology to be thinking about expanding its law school and by taking over the Trelawny stadium in these times of capital expenditure curbs.

If we do not do set our own priorities - and should international financial institutions (like the World Bank, IMF, and IADB) agree to support the restructuring programme for the total debt - conditions will be imposed on the size and composition of the budget with more focus on priorities.

Exchange rate

Third, how should Jamaica attempt to slow down the deterioration in the exchange rate? Again, the debt restructuring and fiscal exercise should have a positive effect on the exchange rate.

But more needs to be done. A new system of incentives should be put in place to encourage production, especially for exports and tourism. Over-reliance on monetary policy by using high interest rates without other complementary policy measures will not succeed.

Policies to encourage exports and tourism to earn more foreign exchange, accompanied by policies to restrict demand for foreign exchange must be a part of a comprehensive strategy.

Restricting demand to make non-essential imports more costly is the quickest way to see results. This can be addressed by a trade policy that makes it more expensive to import non-essential goods by increasing import duties across the board.

Equally important is the need to have voluntary restraints on capital outflows and profit repatriation. I am not suggesting exchange controls.

But a negotiated way can be found to arrive at guidelines to limit such outflows - even for a limited period. Mutually agreed guidelines on the flow of funds is not unique in Jamaica.

Beginning in the late 1960s, Edward Seaga, then minister of finance, development and planning, reached an agreement with the life insurance companies for them to invest a fixed percentage of premium income (I believe it was 25 per cent ) in Local Registered Stock.

Public discussion on these three major initiatives should prove useful in the debate on how best Jamaica can address its current problems.

I am confident that we have the capacity to find a path that will allow us to overcome the current crisis. Fortunately, the world economic and financial crisis has opened the door for new thinking that would have been rejected outright only a couple years ago.

Let us take advantage of this new international dynamic to take bold initiatives that will give Jamaica a fighting chance to overcome its present crisis.

Dr Paul Chen-Young is an economist and investment banker. Feedback may be sent to columns@gleanerjm.com.