PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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contraction in the first half of the fiscal year and a projected moderate increase in the second half of the fiscal year. During the first six months of FY2010/11, the economy contracted by 1.4 per cent with declines of 0.7 per cent for the Goods Producing and 2.0 per cent for the Services industry. Domestic demand remained weak due mainly to the prolonged adverse impact of the global economic crisis on the purchasing power of individuals. Economic activity was also constrained by: (i) the adverse impact of the Jamaica Debt Exchange programme on financial institutions; (ii) drought conditions which impacted some industries during April-June 2010; (iii) the negative effect of security operations in sections of Kingston and St. Catherine during May 2010; and (iv) the passage of Tropical Storm Nicole during the last week of September 2010. Marginal growth during the final six months of FY2010/11 will be influenced by the projected increase in real GDP for the January-March 2011 quarter as the economy is expected to contract during October –December 2010. The projected growth during January-March 2011 will represent the first quarterly increase since July-September 2007. Most industries are expected to register higher value added during this final quarter of the fiscal year with the strongest expansion projected for the Mining & Quarrying industry. Manufacture For Fiscal Year 2010/2011, it is anticipated that real GDP for the Manufacture industry will decline by 2.4 per cent. This performance is predicated on declines in two main components of the industry – Food, Beverages & Tobacco (down 0.9 per cent) and Other Manufacturing (down 4.3 per cent) as it is expected that the supply and demand constraints affecting the industry are expected to persist for the last three months of FY 2010/11 and as such will be unable to outweigh the declines anticipated for the first nine months of the fiscal year. Declines in the Food, Beverages & Tobacco and Other Manufacturing industries are expected to be tempered by the expansion of exports and the development of new products. Wholesale & Retail Trade; Repair and Installation of Machinery For Fiscal Year 2010/11, real value added for the Wholesale & Retail Trade industry is projected to decline by 1.2 per cent relative to the previous fiscal year. This decline is predicated on continued contractions in the domestic economic environment. Consequently, a reduction in total sales is anticipated, resulting from: (i) continued weak consumer demand for goods and services associated with reservations about future job prospects and increases in income; and (ii) a slowdown in domestic industries associated with WRTRIM, specifically the Construction and Manufacture industries and weak consumer demand. The out-turn of the industry is against the background of a weak but improving domestic macroeconomic conditions, as evidenced by: (i) increasing business confidence; (ii) expansions in loans and advances to the industry and for consumption purposes; and (iii) a higher level of remittances. 75
Electricity & Water For FY 2010/11, real value added for the industry is anticipated to contract by 3.6 per cent. This output is expected despite the projected 2.1 per cent increase in real value added for the January-March 2011 quarter, which will be insufficient to outweigh the declines recorded in the other quarters of the fiscal year. Transport, Storage & Communication For FY 2010/11, real value added for the Transport, Storage & Communication industry is anticipated to fall by 2.5 per cent, mainly due to the declines reported in the first three quarters of the FY as higher value added is projected for the January-March 2011 quarter. The higher value added in January-March 2011 is predicated on increased activities in the Transport & Communication segment, given the anticipated up-tick in mining activities; passenger movements associated with tourism; and other cargo movements associated with improvements in trade consequent on the recovery in the global recession. 4.3 Fiscal Year 2011/12 The Jamaican economy is projected to record real GDP growth of 2.1 per cent during FY2011/12 following three consecutive fiscal years of contractions. The Goods Producing and Services Industry are expected to increase by 4.4 per cent and 1.4 per cent, respectively. Improved global economic conditions should positively influence activities in the domestic economy. Consistent with the projected out-turn for 2011, the Mining & Quarrying and the Hotels & Restaurants industries are expected to be the main drivers of growth in FY 2011/12. Strong recovery is also projected for the Electricity & Water Supply industry, influenced mainly by increased electricity demand associated with the expected growth in productive activity. Goods Producing Industry Agriculture, Forestry & Fishing Mining & Quarrying Manufacture Construction Table 5.12. FY 2011/12 Industry Assumptions Assumptions Increased Domestic and Export Crop production due to increased demand. Higher value added is also reflective of recovery from TS Nicole and drought conditions which occurred in the previous fiscal year. Growth will be facilitated by increased use of technology and best practices (Green House, Irrigation and the Agriculture Production and Productivity Programme). Higher alumina and crude bauxite production influenced by strong demand in China, Europe and North America. Strong alumina growth also associated with the proposed reopening of WINDALCo's Kirkvine plant in the second half of 2011. Increased domestic and global demand primarily for beverages and processed food. Increased activity in the Construction, Mining & Quarrying and Agriculture industries should spur demand for manufactured products which are inputs into these industries. Growth in infrastructural activity primarily road construction and repairs. General improvement in the economy would also influence an increase in the building construction component of the industry. 76
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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
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 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 $688.4 million
Page 71 and 72: Non -Traditional Domestic Exports E
Page 73 and 74: negative impact of the Jamaica Debt
Page 75 and 76: ethanol and paint, whereas lower de
Page 77 and 78: Analysis of preliminary GCT data re
Page 79 and 80: The number of ship calls to the isl
Page 81 and 82: industry was, however, estimated to
Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85: increased marketing and extension s
Page 89 and 90: J$ 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
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
Page 117 and 118: in Chapter 8. The mutual interactio
Page 119 and 120: Transforming the complex set of str
Page 121 and 122: Appendix 7A A Methodological Note T
Page 123 and 124: Chapter 8 ____________________ Asse
Page 125 and 126: The DBI focuses more narrowly on qu
Page 127 and 128: to ask, is it possible to predict g
Page 129 and 130: can be made to serve a very useful
Page 131 and 132: For further elaboration of the cons
Page 133 and 134: progressive Jamaica-based firms and
Page 135 and 136: 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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