The Editor, Sir:

Jamaica's current economic circumstances show that, as a country, we are living too close to the edge. Were we to suffer another unexpected expenditure say, due to a natural disaster, it would spell financial disaster for us.

The fact that our regular pay cheques from bauxite and tourism did not come through as expected, and the effects they have on our ability to support ourselves, show that our expenditures warrant serious attention.

In addition, with already high debt balances, Jamaica's creditworthiness, which was declining, is a gauge of our fiscal health as a country. With no reserves in place, having not achieved meaningful economic growth for almost 20 years, we are definitely too close to the edge.

Wage freeze

The recent announcement by the Bruce Golding-led government to freeze public sector wages and to suggest cuts in the salaries of parliamentarians show that the PM is very much aware of the economic issues we face as a country; and can been seen as a sound plan to rescue the country from going over the proverbial 'edge'.

There are two expenditure items that account for well over J$200 billion of our $500 billion budget as a country - debt management and public sector wages.

It is a well known fact that one of the first steps in debt management is to control your expenditure by ensuring you do not spend more than you are earning. With the country's revenue streams showing signs of decline, to keep on increasing the wages and debt repayment would be a sure way towards further long term economic hardship.

Cost-reduction strategies

Cutting expenses at this time is indeed a form of debt management. If this was not done, government would have to borrow more to pay these expenses. Further more, it will help to prepare us in the event we were to suffer a major, unexpected bill such as a hurricane, to which we are still susceptible.

The accompanying cost-reduction strategies suggested by the PM in his address to the nation are also very important at this time, and every well thinking Jamaican can help by communicating with the various government ministries their ideas on how to reduce costs.

I want to commend the PM for taking these necessary steps towards building our nation's wealth during a most challenging economic climate.

I am etc.,

Garfield Edwards

garfieldaedwards@hotmail.com