PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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From further examination of the time trend in rankings on these indices as well as in their underlying indicators, it also appears that Jamaica has been losing ground during the years covered by the data (see Tables 8.2, 8.4, 8.6). Therefore, the rankings observed in the most recent data represent a continuing decline in Jamaica’s relative position. These findings could be considered to raise an alert and cause concern regarding the current status of the Jamaican economy in the international arena. They have served to raise alarm in some quarters. Certainly, they must be taken to indicate that Jamaica still has a far way to go and a difficult road ahead, if the national goal is “to reach developed country status by the year 2030”, as declared in the Vision 2030 Jamaica, National Development Plan. Nevertheless, there is a need to exercise caution in the interpretation of these rankings, for at least two reasons. First, there remains a certain ambiguity as to the relation between cause and effect, which leaves a degree of openness in regards to policy choices. For instance, consider the fact that, within this sub-group of economies, the position on all three indices is highly correlated with per capita income, as shown in Chart 4. 41 This result indicates that, at least for this sample of economies, higher per capita income is strongly associated with a higher level of competitiveness, lower level of corruption, and greater ease of doing business. Despite this remarkable symmetry, it would be premature and unwarranted to infer from this result a simple one-way causation, in either direction, between the level of per capita income and any or all of these indices. The relationship is a complex one that cannot be reduced to any such simple formula. Chart 4. Correlation of Indicators with GDP per capita, 2009 Selected Economies Region Global Competitiveness Index 2009-10 (Score) Corruption Perception Index 2009 (Score) Ease of Doing Business 2009 (Rank) r n r n r n Caribbean 0.715 8 0.686 10 -0.686 8 Other Regions 0.713 9 0.891 9 -0.781 8 Caribbean + Others 0.772 17 0.840 19 -0.786 16 Notes: (1) r = correlation coefficient, n = number of observations. (2) Sources: For list of economies and data on rank/score, see Tables 8.1, 8.4, 8.6; for data on growth rates, see http://unstats.un.org/unsd/nationalaccount/data.asp Consider, also, the relation between the position of the selected economies on these indices and their actual growth performance. As Chart 5 shows, there exists no discernible relation between the position in a particular year and growth in that year or average growth in that and the ensuing one or two years. The correlation coefficient is generally quite low (with two odd exceptions) and all negative in sign. Thus, if one were 41 Note that, in these correlations, the variables GCI and CPI are specified as a quantitative score, and a higher score means a higher rank (higher level of competitiveness and lower level of corruption). In contrast, DBI is specified as the number of the rank and so a higher number means a lower rank. 115
to ask, is it possible to predict growth performance in any current year or medium term from knowing the relative position of an economy on these indices, the answer would have to be a resounding No! Chart 5. Correlation of Indicators with Growth Rate of Per Capita Income Selected Economies CPI score CPI score CPI score GCI score 2007- GCI score 2006- Region (2008)/ Growth (2007)/ Growth (2006)/ Growth 08/growth rate 07/ growth rate rate 2008 rate 2007-08 rate 2006-08 2007-08 2006-08 r n r n r n r n r n Caribbean -0.145 14 -0.126 14 -0.186 12 -0.705 8 -0.291 7 Other regions -0.808 7 -0.521 7 -0.230 7 -0.444 8 -0.167 8 Caribbean + Others -0.277 21 -0.106 21 -0.055 19 -0.393 16 -0.182 15 Notes: (1) r = correlation coefficient, n = number of observations. (2) Sources: For list of economies and data on rank/score, see Tables 8.1, 8.4, 8.6; for data on growth rates, see http://unstats.un.org/unsd/nationalaccount/data.asp Second, since they are highly aggregated macro-indices, these indicators paint a very broad brush and, consequently, fail to reveal the great diversity of actual underlying patterns in the economy. It is at this more detailed and concrete level that specific constraints can be identified and the practical policy issues become more transparent. 3.0 Identifying the Existing Constraints Viewed at the level of detail offered by the underlying components of the macro-indices, it is possible to gain more insight into specific areas of strength and weakness in the Jamaican economy and to begin to identify the prevailing constraints in more specific terms. For this purpose, the DBI offers two levels of detail: ten different indicators, with a corresponding country-ranking for each, and specific quantitative measures for the components underlying each indicator. The GCI offers a more complex picture consisting of several different levels and types of detail: (a) twelve “pillars” of competitiveness, with a corresponding country rank and quantitative score for each, (b) a detailed list of specific components underlying each pillar, with a corresponding country rank for each, (c) a broad classification of pillars according to three major categories: basic requirements, efficiency enhancers, and innovation and sophistication factors, (d) a ranking of “the most problematic factors for doing business” as perceived by respondents in a survey, and (e) the economy’s “stage of development”, in or between three defined stages: (stage 1) factor driven, (stage 2) efficiency driven, (stage 3) innovation driven – Jamaica is found to be in transition between stages 1 and 2. 116
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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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targeted economic and social infras
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partnering with government to disco
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3.0 Growth Inducement Strategy The
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Growth-Inducement Strategy Alignmen
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50 Part II _________ Situational An
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inadequate provision of public infr
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2.0 Macroeconomic Assessment 2.1 In
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Increased global oil consumption wa
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$4,742.0 million and $688.4 million
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Non -Traditional Domestic Exports E
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negative impact of the Jamaica Debt
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Page 77 and 78: Analysis of preliminary GCT data re
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Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85 and 86: increased marketing and extension s
Page 87 and 88: Electricity & Water For FY 2010/11,
Page 89 and 90: J$ Million Figure 5.1. Private Sect
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Page 95 and 96: creates allocative inefficiencies,
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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 and 104: FIGURE 7: GROSS NATIONAL SAVINGS RA
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Page 107 and 108: Part III ____________ Analytical Fr
Page 109 and 110: functional relationship between the
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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: The DBI focuses more narrowly on qu
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
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Page 149 and 150: Figure 9.4. Proportion of Primary A
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Page 153 and 154: 7.0 Fundamental Steps Forward for J
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Page 157 and 158: Current Status: Cabinet by decision
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Page 161 and 162: B ____________________ Eliminating
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Page 165 and 166: 5.0 Expected Outcomes These measure
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Page 171 and 172: Table C.1. Proposed Implementation
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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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