PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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Table 5.2. Percentage Change in World Bank’s Commodity Price Indices, 2008 – 2010 2008 2009 2010 Energy* 39.7 -37.3 26.5 Non-Energy** 21.1 -21.6 26.5 Grains 49.0 -23.7 0.4 Metals & Minerals 3.7 -27.7 47.5 * The Energy index incorporates prices for coal, crude oil and natural gas. ** The Non-Energy index incorporates prices for agriculture, beverages, food, raw materials and fertilizers. Source: World Bank, Commodity Markets Review. Additional impetus for commodity prices resulted from: (i) increased investor confidence supported by the perception that the worst of the recession had passed; (ii) supply side shocks and production restraints; and (iii) severely cold winter weather. Price volatility during 2010 was influenced by financial investors who, through the use of futures contracts as financial instruments, bid up prices according to prospects for future shortages and exchange rate movements. Table 5.3. Selected Commodity Prices, Daily Movements, Half Year And Calendar Year Changes Commodity Daily Change Six Month Calendar Year Units 31-Dec-09 30-Jun-10 31-Dec-10 Change (%) Change (%) Aluminium US$/mt 2208.00 1928.00 2461.00 -12.7 11.5 Crude Oil US$/barrel 77.56 74.70 89.84* -3.7 15.8 Wheat US cents/bushel 5.43 4.65 8.51 -14.4 56.7 Rice (CBOT) US cents/bushel 14.85 9.44 13.99 -36.4 -5.8 Corn/Maize US cents/bushel 416.00 354.50 560.00 -14.7 34.6 * Data available for December 30, 2010. Source: Data compiled from LME, EIA, CBOT. Against this background, energy prices increased by approximately 26.5 per cent relative to a decline of 37.0 per cent recorded in 2009. Non-energy commodity prices also moved up by 26.5 per cent. Reflecting the interplay between demand and supply factors, crude oil prices fluctuated, ending the year at US$89.84, 15.8 per cent above the price recorded a year ago. Buoyant global demand was associated with increased industrial production, transportation and fuel for heating during severe winter weather. Global oil demand reached a record high of 87.4 mbd during 2010, up 2.5 mbd relative to the previous year. Higher fuel consumption emanated largely from Asia, most notably China, the world’s largest energy consumer which increased its consumption by approximately 10.0 per cent, and North America with an approximate increase of 2.0 per cent. However, the severe debt conditions in several Euro countries contributed to decreases in demand from this region. 55
Increased global oil consumption was facilitated by increased supply from non-OPEC producing countries. However, oil prices have been constrained by high levels of inventory and production restraints. OPEC, which accounts for 40 per cent of global oil supply, maintained its production limitations enforced in 2008. Also moderating the level of oil price increase was the steady increase in non-OPEC oil production, from countries such as Canada, Kazakhstan and Brazil 13 . In the first half of the calendar year 2010, grain prices declined in response to sufficient global supplies, amidst high levels of inventory and increased global production. This trend was subsequently reversed as market conditions tightened within an environment of supply side threats resulting from the impact of severe drought conditions on output levels of wheat producing countries, such as Canada, and Eastern Europe. In Russia, forest wildfires destroyed a significant percentage of the crop, leading the authorities to impose a ban on the export of grains until, 2011. Consequent on these developments wheat prices spiked to a two-year high. Subsequently, demand shifted to other grains such as corn, resulting in an increase in the price of these commodities. Wheat prices ended the year at US$0.085/bushel (an increase of 56.7 per cent), corn prices ended at US$5.60/bushel (an increase of 34.6 per cent). However, rice prices ended lower, at US$0.1399/bushel, a 5.8 per cent decrease relative to the previous year. There was also a general increase in metal prices. The price of aluminium stood at US$2461/tonne, 11.5 per cent greater than the price quoted at the beginning of the year. The upward movement in these prices reflected improved industrial production and the associated increased demand for metals. 2.2 Domestic Macroeconomic Performance Macroeconomic Policy Central Government budget for fiscal year (FY) 2010/11 was developed within the context of the Government of Jamaica’s Medium-Term Economic Programme which had facilitated the International Monetary Fund (IMF) approval of a Stand-By Arrangement (SBA) for Jamaica in February 2010. Revised Targets detailing Government's Memorandum of Economic and Financial Policies which accompanied the Letter of Intent to the IMF are indicated in Table 5.4. 13 Non-OPEC oil supply averaged 52.8 mbd in 2010, up 1.5 mbd relative to 2009. 56
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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
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 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: 2.0 Macroeconomic Assessment 2.1 In
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 and 104: FIGURE 7: GROSS NATIONAL SAVINGS RA
Page 105 and 106: 4.10.2. However, the extent of the
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
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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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