Byles: Invest in tourism sector to spur growth
Richard Byles, the co-chairman of the Economic Programme Oversight Committee (EPOC), is encouraging more Jamaican businesses to get involved in the tourism industry, suggesting that it has the potential to spur economic growth.
His suggestion was made against the background of the Statistical Institute of Jamaica reporting just 0.4 per cent growth in the first quarter of this year and the Planning Institute of Jamaica now estimating a 0.8 per cent growth in the second quarter, which some see as not being good enough.
"Every Jamaican says one per cent growth is really small and we need to have, like, three and four per cent," Byles said Thursday at the latest EPOC press briefing.
"Well, there are sectors of the economy that are having the three and four per cent, and tourism is one of them."
In his private-sector persona, Byles is president and chief executive officer of Sagicor Group Jamaica, a company that up to June 2014 had reportedly invested some US$60 million on hotel rooms and other aspects of the tourism business.
"This is big business for Jamaica and I think business people need, to look at the economy and say, 'Well, if one sector that I used to invest in before is not growing but another sector that I never used to invest in before is growing - and has an opportunity to grow even further - maybe I should think of going into it'," said the EPOC co-chair.
"I think that more Jamaican business people need to get into the business of tourism. It is a sector that has great potential for Jamaica. We are really just scratching the surface of the potential of tourism," he said.
Sagicor-related companies own four hotels in Jamaica and is buying another overseas. The financial group's venture into tourism shows that other corporations can enter the business, learn and grow.
In releasing the 28th communiquÈ of EPOC, the body monitoring economic performance under Jamaica's programme with the International Monetary Fund (IMF), Byles said there are no intra-quarter quantitative performance criteria, but measured against the Government's budget, the primary surplus for July came in at $27.8 billion, or $4.1 billion above target.
The net international reserves at August stood at US$2.56 billion, already exceeding by US$1.1 billion the September target of US$1.44 billion.
Revenue performance was slightly behind by 0.1 per cent but almost $26 billion, or 13 per cent ahead of the corresponding period last year.
Tax collections continue to outperform budget by $2.9 billion and was $16.5 billion better than the corresponding period last year.
Taxes that contributed positively to that performance were the company tax, which was $2 billion ahead of target; general consumption tax, $1.4 billion ahead, and tax on interest, $1 billion ahead of target.
Expenditures for the April-June period were $8.2 billion below budget. Of the amount, recurrent expenditure was $3.9 billion below budget, and capital expenditure $4.3 billion below.
"So, between the performance of the revenue, which is pretty much on target, and the under-expenditure, we end up with a primary surplus which is $4.1 billion bigger than the target," Byles said.
The July fiscal accounts of government show the receipt of the US$2-billion bond issue and the repayment of the Venezuelan debt principal of US$1.5 billion.
Assets of about US$1.2 billion owned by the PetroCaribe Fund, and which previously backed and paid interest on the Venezuelan debt, will now help to pay the interest on the US$2-billion bond.
Byles said the Venezuelan PetroCaribe transaction will have no significant effect on the primary balance going forward. It will have a beneficial effect on the fiscal balance to the extent that every month Jamaica was amortising the oil debt, which worked out to be about US$130 million paid to Venezuela.
"That won't happen anymore because there will be no amortisation of the US$2-billion bond. It comes up as a bullet in 2026, so all we are paying is interest on that US$2-billion bond - no amortisation of the principal - and that will have a positive effect on the fiscal balance," said the EPOC spokesman.