PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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They represent supply-side factors in the business environment (“external” to firms) which have a significant effect in terms of the cost, risk and uncertainty of business activity. Other relevant supply-side factors include: bureaucracy and regulation quality of the labor force, quality of infrastructure and the foreign trade regime. Factors related to the “internal” operations of firms, individually or collectively within industries, include: intensity of competition, financial market development, technological readiness, business sophistication, capacity for innovation. Viewed from the standpoint of investment and growth, these constraints are considered here to be crucial because, taken together, they determine the prevailing low level (on average) of international competitiveness of the Jamaican economy. They serve, therefore, to limit the capacity of Jamaica-based firms to respond to competitive pressures emanating from the global economy. To this extent, they constitute a key priority for any policy that seeks to address the problem of economic growth and development in the Jamaican economy. Transforming the complex set of structural and behavioural conditions described here constitutes the fundamental challenge that Jamaica faces at this time. This is the challenge that must be overcome in order to set the country firmly and effectively on a dynamic path to sustained growth with social equity. The totality and complexity of the conditions involved dictate the need for a coordinated, integrated and holistic approach to designing and implementing economic policy. There is no quick fix or one-shot solution. No single investment project, no matter how “big”, taken by itself, will do. No arbitrary package of incentives, waivers and stimulus will do. The essential shortcoming of such measures, basically designed to compensate for lack of international competitiveness, is that they leave undisturbed, and perhaps serve to reinforce, the prevailing low level of international competitiveness in the economy. Any spurt of growth achieved under such conditions is necessarily limited and unsustainable. The proposals presented in this report follow from this basic understanding of the Jamaican growth problematic. They constitute a sharply focused and highly structured strategy and corresponding program of actions designed to be implemented in a timephased manner so as to achieve a turnaround in the economy and build a platform for long-term growth and development. As such, they represent the essential requirements vi
for making a determined start on the road to self-sustained growth with social equity in Jamaica. Because of limited resources, everything cannot be done at once. Therefore, the strategy seeks to focus resources and action at those points which are identified as critical to releasing binding constraints and capable of yielding demonstrable and significant results in a short and medium-term context. It also calls for forceful leadership and exercise of political will We were not called upon to construct a comprehensive plan for long-term development of the Jamaican economy. However, a detailed road map for such a plan is laid out in Vision 2030 Jamaica, National Development Plan. The specific proposals presented here aim to provide a practical vehicle to carry forward that Plan in the short and medium term. Gladstone A. Hutchinson and Donald J. Harris. December 16, 2011 vii
Page 1 and 2: i A GROWTH-INDUCEMENT STRATEGY FOR
Page 3 and 4: To the many ordinary Jamaicans who
Page 5: Preface The Jamaican economy has ex
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 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
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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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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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