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Jamaica in robust position to absorb external shocks - Clarke

Published:Wednesday | April 11, 2018 | 12:00 AMEdmond Campbell/Senior Staff Reporter
Dr Nigel Clarke (second right), minister of finance in discussion with, from left: Therese Turner Jones, general manager, Caribbean Country Department of Inter-American Bank; Andrew Fazio, third vice-president of Business Process industry Association of Jamaica and Dr Wayne Henry, executive director of the PIOJ at the opening session of the 2018 PIOJ/IDB Labour Market Forum " Enabling Growth and Development: Exploring the Potential of the Global Shared Services Sector" at the Terra Nova Hotel yesterday.

Fears of spiralling oil prices on the international market, owing to escalating tensions in the Middle East and the likely impact this could have on Jamaica's economy, are being assuaged by Finance and the Public Service Minister Dr Nigel Clarke who says that the country is now in a position to absorb external shocks.

There were reports yesterday that oil prices had increased to their highest levels since 2014 after Saudi Arabia, which has the world's largest crude oil production capacity, intercepted missiles over Riyadh, the country's capital. At the same time, there were jitters in the market after United States President Donald Trump warned Russia of imminent military action in Syria. Russia has close ties to the Bashar al-Assad regime of Syria.

While Syria is not a significant oil producer, signs of escalating conflict in the already troubled region could trigger concern about crude flows across the wider Middle East. Washington and its allies have been considering air strikes following a suspected poison gas attack last weekend.

In a Gleaner interview yesterday, Clarke noted that Jamaica was mindful of international developments in the Middle East that could have an impact on the Jamaican economy.

"The good news is that we are in a robust position to absorb external shocks," Clarke told The Gleaner following his inaugural address as finance minister at a Labour Market Forum at the Terra Nova Hotel in Kingston.

"Our reserves at the Bank of Jamaica are at extremely high levels. In fact, some of the highest levels ever," he added.

According to Clarke, the country had access to a $1.6 billion facility to which it has not made a drawdown under the International Monetary Fund's Precautionary Stand-By Agreement. Further, Clarke said that the country's energy security was improving as the Government's policy to diversify away from its dependence on oil was bearing fruit.

Rationalisation of 190 public bodies being fast-tracked

Finance and the Public Service Minister Dr Nigel Clarke has disclosed that the rationalisation of 190 public bodies as part of the Government's public sector reform is being fast-tracked to place the country firmly on a path to economic independence.

Clarke, during his address to a Labour Market Forum in Kingston yesterday, pointed out that there were 190 chief executive officers managing the public bodies and an equal number of boards of directors that have to meet. "The complexity this introduces is simply unmanageable for a country of our size and resources," he said.

"The sheer number of public bodies compromises the ability for effective parliamentary oversight, reflection, and review required for good governance," Clarke said. "Furthermore, to the extent that with thought and imagination we could do with fewer public bodies, it means that we are absorbing resources in time and money that could be deployed elsewhere, making our economy more efficient," he added.

Clarke reasoned that it was not economically viable to add public bodies over time without the means to sustainably fund them. The Government has set a target of six weeks to conclude consultations with the unions representing public sector workers over the rationalisation of public bodies.

According to Clarke, the timetable would consider all the opportunities with respect to divestment of public companies that have a commercial focus but which are not necessary for Government to carry out its key functions. It will also focus on the merging of public sector entities where they perform similar key functions in order to achieve more effective delivery of service. Public bodies will also be reintegrated into their parent ministries.

The timetable for the rationalisation of public bodies will be integrated within the administration's programme with the International Monetary Fund (IMF). However, the finance minister said that the country would not wait for the IMF's next visit to start the exercise, noting that the fund's next review was in six months.