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

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Table 3.2. Employed Labour Force by Industry Group, April 2004 –October 2008 Industries Apr-04 Oct-08 Jobs Gained/Lost Agriculture, Hunting, Forestry & Fishing 196,200 223,600 27,400 Education 48,800 72,200 23,400 Real Estate, Renting & Business Activities Wholesale & Retail, Repair of Motor Vehicle, Cycle, 39,400 54,700 15,300 Personal & Household Goods 204,800 219,500 14,700 Health & Social Work Public Administration & Defence; Compulsory Social 23,900 33,600 9,700 Security 43,500 52,900 9,400 Hotels & Restaurants Services 70,300 78,600 8,300 Financial Intermediation 13,500 21,600 8,100 Transport, Storage and Communication Other Community, Social and Personal Service 76,500 84,200 7,700 Activities 53,400 58,400 5,000 Mining & Quarrying 5,500 9,300 3,800 Electricity, Gas and Water Supply 6,500 9,100 2,600 Construction and Installation 105,300 105,700 400 Industry Not Specified (Incl. Extra-Territorial Bodies) 6,700 6,400 -300 Manufacturing 86,100 81,100 -5,000 Private Households with Employed Persons 74,200 63,600 -10,600 Total Employed Labour Force Source: Statistical Institute of Jamaica 1,054,600 1,174,500 119,900 Table 3.3. Employed Labour Force by Industry Group, October 2008 - April 2010 Industries Wholesale & Retail, Repair of Motor Vehicle, Cycle, Personal & Household Goods October April Jobs 2008 2010 Gained/Lost 219,500 205,000 -14,500 Construction and Installation 105,700 92,900 -12,800 Transport, Storage and Communication 84,200 72,000 -12,200 Health & Social Work 33,600 22,500 -11,100 Other Community, Social and Personal Service Activities 58,400 49,200 -9,200 Mining & Quarrying 9,300 3,000 -6,300 Education 72,200 66,500 -5,700 Manufacturing 81,100 76,000 -5,100 Private Households with Employed Persons 63,600 59,400 -4,200 Electricity, Gas and Water Supply 9,100 6,600 -2,500 Real Estate, Renting & Business Activities 54,700 52,200 -2,500 Industry Not Specified (Incl. Extra-Territorial Bodies) 6,400 4,200 -2,200 Public Administration & Defence; Compulsory Social Security 52,900 51,100 -1,800 Hotels & Restaurants Services 78,600 79,000 400 Agriculture, Hunting, Forestry & Fishing 223,600 224,500 900 Financial Intermediation 21,600 23,800 2,200 Total Employed Labour Force 1,174,500 1,087,900 -86,600 Source: Statistical Institute of Jamaica 37
Three industries recorded increases in employment over the period - Agriculture, Forestry & Fishing, Hotels & Restaurants Services, and Finance & Insurance Industries. 7.0 Danger of Public Sector Growth Against the background of the dispirited economic performance evidenced above, the private sector must understand and appreciate that, when the public sector grows faster than the national economy and the private sector, it diminishes our ability to modernize and robustly grow our economy, and more importantly, robs us of our personal and collective development, well-being and freedom of ambitions. Such a situation ultimately erodes our ability to exercise agency in the pursuit of our preferences – just read the wailing over the constrictions of the multi-lateral programmes — and is an important source of un-freedoms. It therefore amounts to public “bads,” because of its inescapability despite our best private efforts to abate its negative consequences. A second-rate education system, poor health-care, high levels of criminality and crime, corruption, and business enterprises with outmoded and uncompetitive structures of production come immediately to mind as examples of how government failures can inflict an economy with public “bads.” These public “bads” contribute to the creation of two Jamaicas with no transitivity of fairness and opportunity of justice between them. Public “bads” are also complex because they are collectively consumed and require our collective effort to negate their societal harm. Since transitive fairness and justice, broad-based opportunities, equity and a “good economy” are all accepted as “public goods,” so too then should the collective aspirations of Vision 2030 Jamaica for all the reasons just discussed. 8.0 Government’s Role in Private Sector led Growth In an August 1997 PSOJ Investment Policy Paper, your members endorsed the findings that micro-economic incentives like industry-specific tax incentives and subsidies were of secondary importance to the abatement of macro-economic and infrastructural constraints in the modernization, revitalization and growth of the economy. This point has been made by the World Bank and by a slew of researchers. I appreciate that these incentives can influence business decisions at the margin, and that they are often sought to compensate for how the poor macro-environment taxes firms and industries into uncompetitiveness; at other times, to match tax incentives and subsidies being granted to competing industries overseas; sometimes to assist in the modernization of domestic industries or to grow new ones; and sometimes for pure economic rent. Whatever the reason, aside from their unaffordability and the perverse incentives they create, they represent a losing and irrational proposition for our debt-ridden and public capital-starved economy. Micro-incentives should never be used as a compensating factor for government failure to adequately address critical macro-economic and infrastructural impediments to economic growth. 38
Page 1 and 2: A GROWTH-INDUCEMENT STRATEGY FOR JA
Page 3 and 4: To the many ordinary Jamaicans who
Page 5 and 6: Preface The Jamaican economy has ex
Page 7 and 8: for making a determined start on th
Page 9 and 10: the private sector groups, listed b
Page 11 and 12: Citibank N.A. Jamaica Branch Grace
Page 13 and 14: need for “additional fiscal space
Page 15 and 16: Chapter 2 ________________ Summary
Page 17 and 18: 1.0 The Economic Situation Today 1.
Page 19 and 20: expected to provide an essential an
Page 21 and 22: Table 2.1. The Policy Framework: A
Page 23 and 24: programme of social inclusion that
Page 25 and 26: Strategic Focus Table 2.2. Growth S
Page 27 and 28: 6.0 Short-Term Growth Stimulus 6.1
Page 29 and 30: decline of 2.0 - 2.2 percentage poi
Page 31 and 32: Table 2A.2. NWA Projects To be Fast
Page 33 and 34: Table 2A.5. Community Renewal Proje
Page 35 and 36: Table 2B.3. Impact of Repairing Far
Page 37 and 38: Appendix 2C Methodology of the Grow
Page 39 and 40: Part I _________ Overview 28
Page 41 and 42: 2.0 Vision 2030 Jamaica Before delv
Page 43 and 44: 3.0 May 2010 Security Event and Aft
Page 45 and 46: the longer than anticipated global
Page 47: Million $ 1,200,000 1,180,000 1,160
Page 51 and 52: 9.0 Proposals for Growth-Stimulus I
Page 53 and 54: targeted economic and social infras
Page 55 and 56: partnering with government to disco
Page 57 and 58: 3.0 Growth Inducement Strategy The
Page 59 and 60: Growth-Inducement Strategy Alignmen
Page 61 and 62: Part II _________ Situational Analy
Page 63 and 64: inadequate provision of public infr
Page 65 and 66: 2.0 Macroeconomic Assessment 2.1 In
Page 67 and 68: Increased global oil consumption wa
Page 69 and 70: $4,742.0 million and $688.4 million
Page 71 and 72: Non -Traditional Domestic Exports E
Page 73 and 74: negative impact of the Jamaica Debt
Page 75 and 76: ethanol and paint, whereas lower de
Page 77 and 78: Analysis of preliminary GCT data re
Page 79 and 80: The number of ship calls to the isl
Page 81 and 82: industry was, however, estimated to
Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85 and 86: increased marketing and extension s
Page 87 and 88: Electricity & Water For FY 2010/11,
Page 89 and 90: J$ Million 510,000 500,000 490,000
Page 91 and 92: 2011/12). These extreme weather eve
Page 93 and 94: Summary Chapter 6 ________________
Page 95 and 96: creates allocative inefficiencies,
Page 97 and 98: heightened risk aversion of financi
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Table 6.1. Employed Labour Force by
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7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0%
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20.0% 18.0% 16.0% 14.0% 12.0% 10.0%
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4.10.2. However, the extent of the
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Part III ____________ Analytical Fr
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functional relationship between the
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It follows that: (5) s = I/Y = [S -
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However, the existence of measureme
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(d) v* = Y*/K* This is a measure of
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in Chapter 8. The mutual interactio
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Transforming the complex set of str
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Appendix 7A A Methodological Note T
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1.0 Focus of this Assessment Chapte
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The DBI focuses more narrowly on qu
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to ask, is it possible to predict g
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can be made to serve a very useful
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For further elaboration of the cons
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progressive Jamaica-based firms and
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Table 8.2. Jamaica: Doing Business,
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Table 8.4. Global Competitiveness I
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Table 8.5 (continued) Indicator Ran
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Rank* Constraint Table 8.7 Business
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1.0 Summary Chapter 9 _____________
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3.0 The Burdens of LAC’s Logistic
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conditions. These combined with a p
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Figure 9.4. Proportion of Primary A
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6.0 Logistics are Essential for Tou
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7.0 Fundamental Steps Forward for J
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Part IV ________________ Policies a
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Current Status: Cabinet by decision
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e more than compensated for by the
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1.0 Background B __________________
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Commercial Bank loan rates have als
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5.0 Expected Outcomes These measure
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capital, mainly in the form of equi
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oth local and overseas (including t
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Table C.1. Proposed Implementation
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Locally, the Scientific Research Co
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Develop formal and informal links t
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1.0 Background D __________________
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5.0 Recommendations Based on the ma
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2.5 Coexistent with the levels of u
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industry as well as provide funding
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Age Group Table E.2. Unemployed Lab
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indirect losses experienced when th
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Table F.1 (continued) Area Type of
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1.0 Introduction G ________________
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Ineffective Social Intervention Pro
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Table G.1 Priority Initiatives Obje
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Table G.2 Phased Implementation Pla
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H ____________________ Proposed Wes
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3.0 Transparency Guarantees By desi
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and Coordinating Unit (PCMU) was es
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therefore need to have sanctioned o
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Slate of existing programme initiat
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The rationalisation was guided by t
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deliver services in an efficient an
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efurbishing to allow for accommodat
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Part V _______________ Panelists’
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With the benefit of hindsight, some
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ight. Where we as a society fail is
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and exclusion of the majority of th
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the elders, youth, children. What f
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C __________________ Enhancing Nati
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Economic Figure C.1. National resil
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A GROWTH-INDUCEMENT STRATEGY FOR JAMAICA IN THE SHORT AND MEDIUM TERM

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