PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 FIGURE 8: POVERTY RATES 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 4.10.1 The poverty rate projection for 2010 is in the range of 18.5% - 20.3%. This represents a projected increase in the range of 2.0% - 3.8%, which is predicated on the following: decline in the level of employment: 1,087,900 persons were employed in April 2010, 35,000 persons fewer than in April 2009. The decline in the employed persons and increase in size of the population contributed to an increase in the economic dependency ratio (i.e. the total number of persons who are not working relative to the employed labour force) from 1.4 persons per employed person in April 2009 to approximately 1.5 persons per employed person in April 2010. decline in real GDP: Real economic activities are projected to have declined by 0.9% during the first half of the year relative to the corresponding period in 2009. Overall for 2010, real GDP is projected to remain flat. Higher Taxes: Tax policy, announced in December 2009 and implemented in January 2010, will contribute to a decline in purchasing power. Lower Interest income : The JDX, which led to a decline in interest rate and longer maturity of government bond instruments, will lead to lower than anticipated interest income, thereby reducing purchasing power. Uncertainty: Uncertainty about the size of future job cuts in both the private and public sectors has led to persons being risk adverse, leading to excess savings (i.e. savings beyond planned investment due to falling consumption and delayed purchasing) which contributed to reduced economic activities. 93
4.10.2. However, the extent of the increase in poverty was cushioned by: Welfare expenditure: increase in resources allocated to welfare expenditure in the FY2010/11 budget Remittance Inflows: increase in remittance inflows by 8.7% to US$928.2 million in January – June 2010 relative to the corresponding period in 2009. 5.0 Fiscal Considerations 5.1 The implementation of the Fiscal Consolidation Programme requires a cut in public sector wages and salaries from 11.75% to 9.5% of GDP over a four- year period. This would lead to i) a further reduction in purchasing power; ii) reduction in demand for goods and service, thus leading to a further contraction in output; and iii) a decline in the short-term economic outlook. In the current economic climate, these negative effects may lead to a slowing of the recovery or a double dip recession. 5.2 Subsequent to the two IMF Reviews, the IMF has highlighted that there are possible threats to the programme including the May 2010 incident, which although stabilized and having no impact on the financial sector, could affect economic prospects through tourism and negative investor sentiment. 6.0 Conclusion 6.1 Given recent socio-economic developments and trends outlined above, the following implications are foreseen: further contractions in output, stalling the projected recovery process in 2010 and 2011 halting the positive recovery trends in employment levels further declines in consumer and business confidence. 6.2.1 Therefore, the PIOJ recommends the following: 1. Implementation of specific growth-inducement projects to generate employment and spur demand, thereby building consumer and business confidence. 2. Use of on-going projects for which loan/grant funding has already been procured and budgetary provision has already been made or will be made, to generate liquidity in targeted communities. The Chinese funded infrastructure rehabilitation programme could be one such initiative to provide jobs, linked with training for community residents. Other programmes planned by the National Works Agency and National Water Commission could also be identified to link the objective of infrastructural improvement with that of job provision. 94
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i A GROWTH-INDUCEMENT STRATEGY FOR
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To the many ordinary Jamaicans who
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Preface The Jamaican economy has ex
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for making a determined start on th
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the private sector groups, listed b
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Citibank N.A. Jamaica Branch Grace
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need for “additional fiscal space
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Chapter 2 ________________ Summary
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1.0 The Economic Situation Today 1.
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expected to provide an essential an
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Table 2.1. The Policy Framework: A
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programme of social inclusion that
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Strategic Focus Table 2.2. Growth S
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6.0 Short-Term Growth Stimulus 6.1
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decline of 2.0 - 2.2 percentage poi
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Table 2A.2. NWA Projects To be Fast
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Table 2A.5. Community Renewal Proje
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Table 2B.3. Impact of Repairing Far
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Appendix 2C Methodology of the Grow
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Part I _________ Overview 28
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2.0 Vision 2030 Jamaica Before delv
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3.0 May 2010 Security Event and Aft
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the longer than anticipated global
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April July October January April Ju
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Three industries recorded increases
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9.0 Proposals for Growth-Stimulus I
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Page 57 and 58: 3.0 Growth Inducement Strategy The
Page 59 and 60: Growth-Inducement Strategy Alignmen
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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 Figure 5.1. Private Sect
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Page 93 and 94: Chapter 6 ________________ Assessme
Page 95 and 96: creates allocative inefficiencies,
Page 97 and 98: Million $ Per cent Jun-10 Mar-10 De
Page 99 and 100: Table 6.1. Employed Labour Force by
Page 101 and 102: J$ million Mar-10 Dec-09 Sep-09 Jun
Page 103: FIGURE 7: GROSS NATIONAL SAVINGS RA
Page 107 and 108: Part III ____________ Analytical Fr
Page 109 and 110: functional relationship between the
Page 111 and 112: It follows that: (5) s = I/Y = [S -
Page 113 and 114: However, the existence of measureme
Page 115 and 116: (d) v* = Y*/K* This is a measure of
Page 117 and 118: in Chapter 8. The mutual interactio
Page 119 and 120: Transforming the complex set of str
Page 121 and 122: Appendix 7A A Methodological Note T
Page 123 and 124: Chapter 8 ____________________ Asse
Page 125 and 126: The DBI focuses more narrowly on qu
Page 127 and 128: to ask, is it possible to predict g
Page 129 and 130: can be made to serve a very useful
Page 131 and 132: For further elaboration of the cons
Page 133 and 134: progressive Jamaica-based firms and
Page 135 and 136: Table 8.2. Jamaica: Doing Business,
Page 137 and 138: Table 8.4. Global Competitiveness I
Page 139 and 140: Table 8.5 (continued) Rank Indicato
Page 141 and 142: Rank* Constraint Table 8.7 Business
Page 143 and 144: Chapter 9 ___________________ Inter
Page 145 and 146: 3.0 The Burdens of LAC’s Logistic
Page 147 and 148: conditions. These combined with a p
Page 149 and 150: Figure 9.4. Proportion of Primary A
Page 151 and 152: 6.0 Logistics are Essential for Tou
Page 153 and 154: 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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B ____________________ Eliminating
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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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D ____________________ Business Pro
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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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Table E.2. Unemployed Labour Force
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indirect losses experienced when th
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Table F.1 (continued) Area Type of
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G ____________________ Community Re
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Figure G.1 Community Renewal Progra
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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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Figure I.1. Functions of National P
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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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Figure C.1. National resilience is
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PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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