Briefing year in review (Pt 2)
What happened the second quarter of last year?
LAST WEEK, we summarised the briefings leading up to mid-April 2013. The Budget was read towards the end of April. The aim of the 2013-2014 Budget was to implement policies to drive actions necessary to reduce the debt-to-GDP ratio from 140 per cent to 95 per cent of GDP by 2020, reduce the public-sector wage bill to nine per cent of GDP by 2016, and achieve a primary surplus of 7.5 per cent of GDP.
The country was also mandated to achieve quarterly performance targets, implement a central treasury management system, and strengthen the tax administration and fiscal responsibility framework. The Government aimed to create a more business and investment-friendly economy, driven by a more efficient public sector. They also wanted to ensure that most of the taxes due are collected, and no cost overruns on public contracts.
They planned capital expenditure of $2.5 billion funded by the EXIM Bank to offset development programmes, $1.7 billion to continue the transport infrastructure project in Westmoreland and St Thomas, $1.4 billion to upgrading the infrastructure to provide affordable housing in St Ann, and $1.28 billion to complete drainage rehabilitation works in Kingston Metropolitan Area.
There were also plans to privatise the Kingston Container Terminal, the Norman Manley Airport, Jamaica Railway Corporation and Caymanas Track Ltd. The Government was also drafting a sale or lease agreement for its shares in the Clarendon Alumina Partners Ltd.
Other major projects included the expansion of our commercial ports and the construction of a logistics hub by 2015-2016, improving the ICT (information communication technology) sector and increase the number of agro parks across the island, implementing tax and public sector reform.
What did the Opposition say?
Members of the Opposition gave their presentations as well. They outlined the following as necessary for growth:
(1) Formulation and implementation of a new export development strategy.
(2) Improve agriculture; import substitution, production for export and the expansion of agro parks.
(3) Establish an Energy Support Fund; the Government should use its profits from the Jamaica Public Service and the savings from the PetroCaribe funds to provide grants and low-cost loans to the manufacturing sector.
(4) Create a special foreign exchange window.
(5) Complete the FINSAC report.
(6) Revisit FINSAC assets and plans for the National Housing Trust funds.
(7) Transfer FINSAC assets to NHT.
(8) Review CARICOM trade agreement, including the Treaty of Chaguaramas, and prevent goods that violate trade rules from entering Jamaica without attracting the relevant tariffs.
(9) Take a more strategic approach to promoting investments.
(10) Set a time frame for the abolishment of corporate surtax, the asset tax and dividends tax.
(11) Improve crime management. Some of these recommendations coincided with the some of the recommendations from the leader of the Opposition.
What happened in May?
At the beginning of May, the prime minister delivered her presentation. She emphasised that both growth and development are necessary to move the country forward.
Therefore, along with implementing policies to increasing overall production of goods and services in the country, she pledged to implement policies that will increase the welfare and standard of living and livelihood of people as well. The following week, it became important for The Briefing to discuss the essential elements of a logistics hub and the benefits of this hub to the Jamaican economy. On the same tune, the issue of brain drain and its impact on the Jamaican economy was the last briefing in May.
How did the summer start?
Almost halfway into 2013, the World Bank's Doing Business Report ranked Jamaica 90th out of the total 185 economies assessed, five places worse than 2012.
It became harder to get electricity in 2013 compared to 2012, as Jamaica dropped 13 places. It also became more difficult to obtain credit, as the country fell seven places. As it relates to protecting investors, Jamaica slipped three places in the rankings. The country improved, however, in its ability to pay taxes as well as ease of starting a business and dealing with construction permits relative to other economies in the study.
At the end of June, the world economy delivered interesting revelations, marijuana became legal in several states in the US, The Briefing analysed the marijuana industry as a lucrative avenue to earn meaningful tax dollars similar to Colorado. The second quarter of the year ended with a discussion on monetary policy and the role of the Bank of Jamaica as the central bank.
How was the rest of year for Jamaica?
Find out more as the briefings in review continue next week.
Dr André Haughton is a lecturer in the Department of Economics on the Mona campus of the University of the West Indies. Follow him on twitter @DrAndreHaughton; or email firstname.lastname@example.org.