PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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Table 2B.6. Impact of DBJ Loans to MSMEs, by Industry Loans ( J$ Million) Impact of Expenditure (J$ Million) Agriculture 49.11 96.15 Mining & Quarrying 0.01 1.70 Manufacture 10.80 111.64 Electricity & Water 0.003 28.36 Construction 0.14 12.50 Wholesale & Retail Trade 134.35 229.00 Hotel and restaurant services 53.17 107.08 Transport, Storage & Communication 1.27 65.63 Financial intermediation and insurance services 0.06 27.02 Real Estate & Business Services 0.62 46.01 Government services 0.31 5.89 Other Services 0.00 12.55 Other community, social and personal services 0.15 32.18 Value Added 0.00 390.83 Total 250.00 1166.55 Source: Compiled by the PIOJ 25
Appendix 2C Methodology of the Growth-Impact Analysis 1.0 The impact analysis of the short-term measures within the Growth-Inducement Strategy was primarily based on applying an Input-Output (I-O) model to analyze the economic effects of implementation of a selected list of projects. 1.2 The I-O model used is based on the 2000 Input-Output table of the Jamaican economy. 4 It was closed with respect to the household sector. This allowed for measuring, at the detailed industry level, the projected direct, indirect and induced output effects of each project. Employment multipliers derived from the I-O Model were used to estimate the impact on employment. Bearing in mind that I-O based multipliers may, for various reasons, be lower than those obtained through time series estimates of expenditure multipliers, an alternative crude estimate of an output multiplier for the overall economy was also estimated using data relating to the change in GDP per dollar change in government expenditure. 5 The results of both methods are presented in measuring the overall impact of each project on the economy. 6 We interpret the I-O based estimates as providing a lower bound for the economic impacts while the aggregate multiplier is viewed as providing an upper bound. 1.3 The main assumptions used in isolating the final demand injections arising from each type of project were as follows: For the NWA public works projects, the injection was primarily modelled as an increase in investment demand for the output of the mining and quarrying sector, given the large share of expenditures devoted to local materials such as aggregates, bitumen, etc. For the RADA farm-road rehabilitation projects, the injection was modelled as an increase in investment demand distributed according to existing sectoral distribution of investment. For the CRP projects, a distinction was made between infrastructure-related projects and “social work” projects. The infrastructure components were treated in the same way as the RADA projects above, while the social work components 4 The Input-Output Table is best used to determine short-term impact effects for up to five years after its construction because underlying changes in the structure of the economy, over a longer term, are likely to alter the estimated coefficients. The 2000 I-O Table used here is based on the economic structure of 10 years ago. It is, therefore, likely to have reduced accuracy, by how much and in which direction are not known a priori. Improved measures must await updating of the I-O table. Meanwhile, these estimates serve as a useful benchmark, better surely than wild guesses or back-of-the-envelope calculations. 5 The crude output multiplier was measured by change in expenditure divided by change in GDP for 7 years, 2003 to 2010. A trimmed mean was then used as the multiplier. 6 The value added multipliers produced by the I-O analysis are usually underestimated as some of the spillover effects are not captured, depending on how the model is closed with respect to final demand. Conversely, the output multipliers for the overall economy are generally high and over-stated. This the PIOJ has learned from past experience of assessing the impact of construction of the Highway 2000 Project. The approach taken in the present work is to use both methods to provide a range for the expected gain in value from the projects. 26
Page 1 and 2: i A GROWTH-INDUCEMENT STRATEGY FOR
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: Table 2B.3. Impact of Repairing Far
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 and 48: April July October January April Ju
Page 49 and 50: Three industries recorded increases
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: 50 Part II _________ Situational An
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 $688.4 million
Page 71 and 72: Non -Traditional Domestic Exports E
Page 73 and 74: negative impact of the Jamaica Debt
Page 75 and 76: ethanol and paint, whereas lower de
Page 77 and 78: Analysis of preliminary GCT data re
Page 79 and 80: The number of ship calls to the isl
Page 81 and 82: industry was, however, estimated to
Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85 and 86: increased marketing and extension s
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Electricity & Water For FY 2010/11,
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J$ 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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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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