Briefing in review Part III
IMF, smoking ban - hot topics for 2013
What happened in July?
THE SMOKING ban took effect in Jamaica early July last year. It is illegal to smoke tobacco products in public places.
The briefing discussed smoking in public places as a negative externality. Ambiguities concerning the implementation of the law were also highlighted. For example, people were unsure as to what the word public meant, whereas others thought the fine and penalties were unrealistic.
By mid-summer, the unemployment rate was more than 15 per cent, the highest Jamaica has recorded in several years.
Jamaica's unemployment rate averaged 13.8 per cent from 1991 to 2013, reaching an all-time high of 16.5 per cent in December 1997, and an all-time low of 9.8 per cent in December 2007.
Without the adequate safety nets in place, poverty was also increasing as a result.
In a survey conducted to find out what the world really wants for the next global-development goals, people cited increased income and employment as the two major concerns, especially in Latin America and the Caribbean, where more than 43 per cent of the groups surveyed cited income and unemployment issues as their major concern.
Reggae Sumfest was highly anticipated and was expected to attract the usual thousands of foreigners, The Briefing discussed tourism and the resort capital of the island, Montego Bay. As we approached Emancipation and Independence at the beginning of August, the difference between growth and development was examined. Growth, mainly associated with an increase in output, whereas development addresses standing of living and life expectancy of the people.
How was August?
The IMF Country Report no. 13/126 provides the details and the requisite requirements which Jamaica must satisfy to remain qualified for the extended fund-facility agreement offered by the IMF. The briefing discussed the main elements of this report and outlines the timelines associated with each element of the report.
Hugo Chavez died last year and there were rumours that this might have had an impact on the PetroCaribe deal between Jamaica and Venezuela. The Briefing outlined the important elements of the deal and analysed the impact on the Jamaican economy of any changes to the agreement.
Unemployment and labour productivity was discussed again in August, as different types of unemployment were examined in a Jamaican context. Labour productivity is also a cause for concern in Jamaica. Results from research conducted by the Jamaica Productivity Centre indicate that labour productivity in the country fell at an average rate of 1.5 per cent per annum. Also, productivity, including labour, capital energy and other inputs, fell at an average rate of 1.74 per cent per annum during the same period.
By this time, the unemployment rate was more than 16 per cent. Unemployment among youth aged 18-24 stood at approximately 38.5 per cent at the end of April this year. The unemployment rate for young men was 30.1 per cent, compared to women, 27 per cent. Sixty-seven per cent of unemployed youth were without basic qualifications as they did not pass any Caribbean Secondary Education Certificate subjects.
How did the third quarter end?
The Goat Islands became the new topic for discussion. Its proposed transformation into a major part of a logistics centre for the island was criticised by environmentalists. They objected for three main reasons:
1. The structure and position of the islands help to protect parts of Jamaica from hurricane and other natural disasters,
2. The islands are vital ecosystems, home to many endangered species of sea creatures and wildlife which, if disturbed, could have a severe effect on the environmental sustainability of Jamaica in the long run.
3. More than 4,000 fisherfolk rely on the area for their livelihood.
There were also some IMF targets to meet at the end of September, these include:
1. Primary balance of the central government must reach $38.2 billion.
2. Tax revenues must be at a minimum of $150 billion.
3. Central government direct debt incurred must not exceed J$21.4 billion.
4. Central government guaranteed debt must not exceed J$8 billion.
They were all met comfortably and Jamaica moved on to the next phase. The country improved on the global competitiveness report, from 97th in 2012 to 94th last year.
The growing energy crisis in Jamaica has been a cause for concern. The lowest consumers pay in Jamaica is $40 or US 39 cents per kilo watt hour compared to the United States where energy costs as low as 12 cents per kilo watt hour in some places.
The Briefing closed the third quarter discussing this situation as well as plans to improve the situation in the near future.
How did the year end?
Join us next week, to finalise, in Part 4 of the year in review.
Dr Andre 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 email@example.com.