The proposed 2009/2010 budget requires $58 billion more than last year's. Our foreign exchange (FE) earnings have markedly diminished so the Government plans to generate needed revenue by selling off its assets (read liabilities) and calling for more - more taxes, spending, hardship, sacrifice and inflation at a time when we have less - less income, jobs, reserves and savings. A lot of our financial troubles stem from a massive hole in the FE 'bucket'. Only a few businesses earn FE but many people spend it and our foreign debts significantly erode into our annual earnings.

I became aware of the FE 'hole' when the Government of the day unthinkingly freed up the widespread importation of used motor vehicles. It was a politically expedient move that gave a lot of people the opportunity to own their own vehicles. It also provided ready revenue because significant taxes (sometimes up to almost 200 per cent) were earned on everything to do with motor vehicles (various import duties, licenses, transfers, insurance, fitness, parts, repair and traffic tickets). Additionally, these easy taxes could be manipulated (increased) as the Government's need for quick income grew.

This penny wise, pound foolish short-sightedness has been haemorrhaging FE since then because no one considered the vast sums of FE needed to purchase those many hundreds of thousands of used vehicles, to buy fuel for them, to repair them, to reinsure them abroad and to effect roadway upgrading, expansion and repairs. Far less foreign exchange would have been spent if they had first set up an efficient and safe public transportation system that everyone could use.

Export of foreign exchange

One of my pet peeves is the foreign acquisition of our (very) essential power supply company and many of our private mega-enterprises. Limited amounts of investment capital flowed in initially but overseas investors and shareholders must be remunerated when they make a profit and that's where we continuously export indeterminate millions of foreign exchange.

We lose a remarkable amount of FE every day because IT savvy consumers (incensed by and fed up with the rapacious mark-ups of many retailers), choose to use the Internet to shop online and save significantly by importing products on their own. They buy everything from massive trucks to music CDs. In most instances, consumers come out way ahead when they order an item over the Internet with US dollars, pay for shipping, handling and insurance, pay all the requisite (compounded) taxes, pay the customs broker or importer and pay for transport. Retailers need to compete globally and price goods reasonably enough to render Internet shopping impractical.

We also lose FE when students pursue their (very expensive) tertiary education overseas. Some relocate (temporarily or permanently) but others enlist in one of many distance-learning programmes. Our universities and colleges must seek funding for more scholarships, become user-friendly and offer diverse courses (even if that means partnering with their overseas counterparts) to compete meaningfully and save our precious FE.

The recruitment of foreign consultants (who must be paid with FE) is another matter. Some are part and parcel of loan agreements but, from what I understand, others are not. We must start recruiting our home-grown talent and save money.

Globalisation unkind

Globalisation has been unkind to developing countries like ours. Our farm products can't compete fairly with heavily subsidised crops from rich countries unless we employ novel marketing ideas and economic wizardry to nullify this handicap.

Limiting excessive and unnecessary FE losses with concerted, clear-thinking, apolitical fiscal planning and innovation is essential if we are to survive.

Garth A. Rattray is a medical doctor with a family practice. Feedback may be sent to garthrattray@gmail.com or columns@gleanerjm.com