A GROWTH-INDUCEMENT STRATEGY FOR JAMAICA IN THE SHORT AND MEDIUM TERM

moment which demands re-orienting our economic policy towards a sharpened focus on
enhancing growth as the necessary basis for realizing sustained improvements in the
social well-being of citizens, consistent with the goals of Vision 2030.
2.2 The strategy recognizes the binding constraints that the economy now faces, not
the least of which come from tight and restrictive conditionalities of the IMF programme.
However, it simultaneously appreciates and exploits unique opportunities arising from
the current situation which have combined to create important avenues for economic
recovery.
2.3 Specifically, ongoing fiscal consolidation and improvements in budgetary
management have resulted in significant reduction in the interest yield on financial
instruments offered by government and BOJ, hence in the cost of government financing
activities. This, in turn, has forced private capital into a search for new opportunities to
earn competitive returns. The ongoing recession has also created significant liquidity in
the portfolio of development banks as they experience a drop-off in demand for funds to
support traditional venture economic activities, thus similarly forcing them into
identifying new ways and economic activities for creating value.
2.4 Hence, an economic stimulus and recovery strategy that is aimed at facilitating
increased private-sector investment in real sector activities, and development bank
financing partnership, could provide a rich vein for economic recovery without excessive
new demands for central government support either in finances or through fiscal space.
2.5 At its core, the strategy recognizes a basic fact, i.e. that there exists a sizeable
pool of latently available and potentially productive assets - financial assets, physical
capital, buildings, labour, and land - that currently lie fallow, dormant, and/or
underutilized and/or wasted. There also exists throughout the economy, in big, medium,
and small businesses, entrepreneurial talent ready to act to bring these assets to fruition in
productive activities. Foreign investors and diaspora partners have also shown an active
interest. In some widely reported cases, creative moves in this direction are already being
made in various sectors of the economy, as is evident, for instance, in a recent run of nine
successful IPOs (with ten more expected in 2011) and in the revival of the real estate
market in downtown Kingston. The strategy seeks to strengthen and accelerate these
positive developments by setting in place the necessary support framework to mobilize
potentially productive assets and unleash entrepreneurial dynamism.
2.6 This dynamic combination of factors constitutes a solid base on which to begin to
build a platform for growth. However, there are significant constraints, real and
perceived, which stand in the way of realizing this potential. Of these, the single most
important is the cost of crime. It is estimated to cost the economy between 5 and 7 per
cent in gross output. A systematic approach to crime reduction is being taken by
Government, with noticeable gains now being realized. Ongoing actions and plans now
in place should yield further gains, hence advance further towards normalization of
criminality and, thereby, enhance the climate for conduct of business as well as the daily
life of citizens. In this context, the proposed Community Renewal Programme is
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