PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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is reported to have increased by J$6 billion this year, to J$24 billion or one-third of the JDX’s annual savings. We need to tackle this phantom debt, before it comes back to haunt us. Leaving this situation unaddressed is unacceptable. We need a contributory scheme for public sector workers now and not a Jamaica pension exchange later. Secondly, we must resist the temptation for large public spending to stimulate growth. The Growth-Inducement Strategy calls for J$14 billion of spending. Some already announced and all worthwhile. That said, we caution strongly that any large-scale spending campaign beyond these levels would be unwise. The Pre-JDX era is still fresh in our minds, as are the sacrifices the private sector was asked to make. Any one-off, adhoc projects that would threaten our fiscal commitments would break this covenant and be bad for economic growth. Thirdly, immediate and wide-reaching tax reform is critical and our preferred stimulus. The Growth-Inducement Strategy lists tax reform as a medium-term measure, though it does list some tax items in the immediate term. We believe that the time for immediate and wide-ranging tax reform is now. We endorse wholeheartedly, the PIOJ’s call to remove stamp duty on loans that are refinanced and believe it will lower borrowing rates for average Jamaican consumers and businesses. But we would go further and suggest the following for immediate action. Firstly, lower the GCT rate significantly. If done in conjunction with removing exemptions, it will be revenue neutral, and will provide a large stimulus to the economy and create a permanently simpler system. Secondly, unify external tax and tariff rates. With the myriad of rates and the expensive system of administration, the average statutory and collected rates are astonishingly low. Thirdly, unify and simplify the structure and you will not only have a simpler, less corrupt and cheaper system to administer, but you will collect more revenue. It’s a no brainer and a game changer. Fourthly and finally, if we do not lower our cost of energy, we will not have high rates of growth, full stop. While the Growth-Inducement Strategy proposes net metering and net billing, we believe this is not enough. We need aggressive policy measures focused on lowering the cost of generation and changing the regulatory framework so that consumers and business pay 20 cents per kilowatt hour instead of 30 cents. We understand that this topic is “charged”, but you can count on the PSOJ’s support. 4.0 Conclusion In conclusion, we congratulate the PIOJ on its work in preparing the Growth-Inducement Strategy. The document is a well-crafted and well-designed set of policies which we believe can produce high rates of growth. Nevertheless, it’s still a document. Our President likes to say that Jamaica is the most studied economy in the world, and he’s 207
ight. Where we as a society fail is in the implementation not in the design of public policy. We suggest that as we seek to implement this strategy, we learn from our recent successes. As the JDX and IMF programme illustrate, good implementation is a function of: clearly articulated and measurable objectives, a broad consensus, high penalties for failure and regular public monitoring. The PSOJ looks forward to playing its part in taking the Growth-Inducement Strategy off the page and into the lives of Jamaicans. Thanks for your kind attention. 208
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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 $688.4 million
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Non -Traditional Domestic Exports E
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negative impact of the Jamaica Debt
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ethanol and paint, whereas lower de
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Analysis of preliminary GCT data re
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The number of ship calls to the isl
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industry was, however, estimated to
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4.0 Projected Performance 4.1 Calen
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increased marketing and extension s
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Electricity & Water For FY 2010/11,
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J$ Million Figure 5.1. Private Sect
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2011/12). These extreme weather eve
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Chapter 6 ________________ Assessme
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creates allocative inefficiencies,
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Million $ Per cent Jun-10 Mar-10 De
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Table 6.1. Employed Labour Force by
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J$ million Mar-10 Dec-09 Sep-09 Jun
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FIGURE 7: GROSS NATIONAL SAVINGS RA
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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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Chapter 8 ____________________ Asse
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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) Rank Indicato
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Rank* Constraint Table 8.7 Business
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Chapter 9 ___________________ Inter
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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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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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Page 179 and 180: 5.0 Recommendations Based on the ma
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PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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