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Stabroek News

LETTER OF THE DAY - Economics of Air Ja
published: Saturday | March 31, 2007

The Editor, Sir:

It is useful, in my view, to make a distinction between the accounts of Air Jamaica and the economics of Air Jamaica.

The accounts undeniably paint a dismal picture. However, the economic picture will be quite different.

Consider the police, for example, they are providing benefits to the entire economy that would be difficult to evaluate in terms of dollars.

Necessary force

It would be unusual for anyone to say the police force is run at a loss. In fact, the cost of the police force should be seen as transferred income, income transferred by the government from taxpayers to the police sector.

It should be noted that the police sector has competition from security companies, but no one argues forcibly that the government should get out of policing and leave it to the security companies.

By this analogy, though imperfect, we will see that all the expenditure of Air Jamaica that is paid for by taxpayers and kept within the Jamaican economy is transferred earnings from taxpayers to the Air Jamaica.

Cost-benefit analyses

Air Jamaica also provides benefits to the Jamaican economy that would be difficult to evaluate in dollars.

This would indicate that the analyses of Air Jamaica should not be confined to mere accounting, but that the entire economics should be systema-tically addressed.

This calls for cost-benefit analyses, which encompasses the totality of Air Jamaica's costs (sociological, political, environmental) and all the benefits which are provided.

I am, etc.,

FRANK A. SUBARAN

ourinn@shentel.net

2223 Old Valley Pike

New Market, Virginia

Via Go-Jamaica

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