Prime Minister Bruce Golding speaks at the JLP Area Council One meeting on Sunday.

Prime Minister Bruce Golding has urged the Planning Institute of Jamaica (PIOJ) to broaden the scope of its economic analyses and reports to reflect factors such as external shocks, like the effects of current food shortage worldwide and spiralling oil prices.

Golding, speaking at the dedication of the new PIOJ building in New Kingston, commended the agency for sterling work over five decades, but said current world events have made it necessary for such impacts on the local economy to be reflected in its annual publication - the Economic and Social Survey - to assist the government in planning and addressing priority areas.

"Fifty years ago our economy was to a great extent insulated from what was happening in the rest of the world," Golding said.

Sensitive economy

But now, he said, "the economy is so sensitive to what is happening elsewhere and one of the things that the PIOJ has to do and the survey will have to reflect is not just the extent of that vulnerability, but identifying the areas of impact and the particular effect that various scenarios will have on the economy."

The PIOJ, which was established in 1957, is the agency of government responsible for planning, research, and advising on economic matters.

Golding said the agency should be able to identify and explain the disparity that exists between investments in the economy and the lack of GDP growth.

"I didn't accept then and don't accept now the excuse that was being given that it is being reflected in the informal economy because I have never considered the informal economy to be an enclave isolated from everything else. It is something that we need to study because it will avoid us from putting scarce resources into areas that are not generating the economic returns that we need," the PM said.

Investments not reflected

Former prime minister Edward Seaga, a distinguished fellow at the University of the West Indies, said he did understand how it is that the country has been able to attract billions in investments in the last several years, but has not been reflected in the GDP growth. He further pointed to the inequity which exists between the large profits generated by the island's financial institutions and the unusually high interest rates.

john.myers@gleanerjm.com