PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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(2) Incentives for Short to Medium term Establishment of a Real Estate Investment Trust for all Crown Lands (Capital Market). (3) Incentives for the Medium Term Abolition of Estate Duty – Needed to give the necessary fillip to the real estate market which remains dormant as beneficiaries are unwilling to apply for letters of probate for fear of losing the bequeathed asset totally. Initial fallout in revenue will be covered by an exponential increase in second sales. This is already being treated in part under the Special Provisions Act which governs LAMP communities. Likely to be substantially revenue positive in the short to medium term. Give Local Authorities (parish councils, KSAC) the latitude to vary property tax and other local rates and charges in an effort to attract new business activity. This would create competition, a natural tax reduction for firms, and an expanded tax base for local government. It would also de-Kingstonize the economic base of the economy and open up new markets for housing and land. Coupled with the earlier suggestion for creation of a Real Estate Investment Trust and the abolition of Estate Duty, the regional real estate market would have new reasons to experience a boom in activities. Secured Transactions – Collateral reform – funded by IDPs. This would allow borrowers to pledge movable property as security for a loan in a manner that removes ambiguity regarding the property that has been pledged, gives lenders the right to repossess these assets speedily in the event of payment default. Fast-tracking the implementation of this recommendation should result in reduced interest rates, lower transaction costs and increased access to finance for the 35 per cent of business persons currently marginalized by the financial system. (4) Medium-Long Term Strengthen Business Clusters that are organically developing. Foster the organic development of clusters of economic enterprises and industries that share value-chain linkages and benefit from proximity to each other. These linkages may be at the national level, or at the level of specific regions of Jamaica, where we can already see such clusters emerging, for example, in the development of linkages between farmers and hotels in resort areas on the North Coast, or between farmers and food processing facilities in our agricultural heartlands, or between transport infrastructure and logistics and manufacturing zones on the South Coast. These and other examples all offer the opportunity for a proactive and agile public sector to provide supporting conditions through integrated spatial and land use planning, provision of adequate and 41
targeted economic and social infrastructure, improvements to the business environment and labour markets, and other interventions. Regional development - The benefits of a strategy of regional development are many, including provision of sustainable livelihoods on a balanced geographic basis, and reduction in rural to urban drift. Most importantly, such a strategy will contribute to an expansion of the sphere of freedoms enjoyed by our citizens, who will be better able to make choices based on economic benefits and lifestyle preferences, and “vote with their feet” to relocate in geographically diverse manners for their long-term wellbeing and economic development aspirations. The suggestion to give Local Authorities (parish councils, KSAC) the latitude to vary property tax and other local rates and charges in an effort to attract new business activity is the perfect complement to any regional development initiative. Tax reform aimed at a general lowering and broadening of the base and simplifying taxes to better promote equity, fairness and economic growth, industry competitiveness, and broad-based development. According to existing studies, the complex system of tax incentives distorts the use of economic resources and is a major source of the misallocation of resources and inefficiency across industries. The tax system encourages “enclave’ development which has minimal linkages with the rest of the economy and directs investments flow to industries isolated from the violence which affects the other areas of the economy. This results in investment concentrating in areas such as All Inclusive Resorts, Mining & Quarrying and Export Free Zones. According to the 2004 Final Report of the Tax Policy Committee, “government has significantly narrowed its tax base through its granting of a wide range of preferential treatments,” and “Jamaica appears to be caught up in a culture of non-compliance (catch me if you can) and a path of finding the path of least resistance on the administrative side (I will catch who I can).” These are just some of the ways in which the government could assist in removing constraints to growth in the private sector and the economy. 10.0 Conclusion Our economy is at an important juncture, if not at a tipping point in its development. It has taken important strides to transform itself into a private sector led economy, but for a variety of reasons the private sector and private economy have contracted even more rapidly than the public sector over the past few years. Hence, the freed-up financial capital assets and the displaced human and physical capital assets expected under the rationalization of the public sector, are not being absorbed into an expanding private sector and expanding macro-economy. The potential economic dislocations from this is a recipe for a retreat to a state-directed economy, which over the past 30 years has proved unsuccessful in advancing our national well-being and development aspirations in any notable way. 42
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 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 and 48: April July October January April Ju
Page 49 and 50: Three industries recorded increases
Page 51: 9.0 Proposals for Growth-Stimulus I
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 $688.4 million
Page 71 and 72: Non -Traditional Domestic Exports E
Page 73 and 74: negative impact of the Jamaica Debt
Page 75 and 76: ethanol and paint, whereas lower de
Page 77 and 78: Analysis of preliminary GCT data re
Page 79 and 80: The number of ship calls to the isl
Page 81 and 82: industry was, however, estimated to
Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85 and 86: increased marketing and extension s
Page 87 and 88: Electricity & Water For FY 2010/11,
Page 89 and 90: J$ Million Figure 5.1. Private Sect
Page 91 and 92: 2011/12). These extreme weather eve
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
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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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