PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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Table 5.12 (continued). FY 2011/12 Industry Assumptions Services Industry Assumptions Electricity & Water This industry will benefit from increased economic activity which will result in increased demand for electricity. Growth in the industry also reflects recovery from drought conditions which prevailed during some months in the previous fiscal year. Wholesale & Retail Trade; Repairs and Increased domestic demand linked to higher economic activity Installation of Machinery which will spur growth in this industry. Increased activity specifically in the Agriculture, Manufacture and Construction industries should also result in higher value added. Hotels and Restaurants Higher economic growth in our main source market (USA), other traditional markets as well as increased marketing in new areas will result in increased stopovers. The restaurant component of the industry should also register growth, a recovery from the decline registered in the previous fiscal year. Transport, Storage & Communication Water transport will be influenced by increased cargo movements associated with increased Mining & Quarrying activity linked to the reopening of the Kirkvine plant; general growth in merchandise trade volumes; growth in cruise ship arrivals. Air transport will be positively influenced by increased passenger movements consistent with projected increase in stopovers. Finance & Insurance Services Increased economic activity within an environment of improved investor and business confidence and low interest rates should increase the demand for loans and advances. Real Estate, Renting & Business Activities A rise in the demand consistent with projected recovery in the economy. Government Services Continued fiscal consolidation. Other Services Growth in this industry will be strongly influenced by increased tourism related activities as well as increased demand for personal services. Less Financial Intermediation Services Indirectly Measured Growth in the provision of financial services consistent with the projected higher demand for business services. Source: Compiled by the PIOJ 5.0 Key Risks to Achieving Economic Growth Production conditions continue to be negatively affected by long-standing structural constraints, including: high cost of doing business (financing, taxes, etc.) high levels of crime (notwithstanding a reduction in violent crimes during the latter half of 2010) high energy costs inadequate provision of public infrastructural services (both physical and nonphysical infrastructure) inadequate stocks of human capital continued weakness in the real sector, as evidenced by a decline in private credit and rise in non-performing loans, which are leading indicators of real-sector business confidence. 77
J$ Million Figure 5.1. Private Sector Expenditure in Real 2003 Prices 510,000 500,000 490,000 480,000 470,000 460,000 450,000 2004 2005 2006 2007 2008 2009 Real GDP is projected to grow by 2.1 per cent in FY 2011/12 on the basis of favourable assumptions about production and demand conditions (see Table B11). However, the continued negative impact of the above-mentioned structural weaknesses combined with likely negative impact of higher commodity prices (particularly oil and grains), will weaken the likelihood of attaining the projected growth target. Current growth prospects are based on extremely fragile foundations and the PIOJ perceives most of the risks to its growth forecasts to be on the downside. The fragility of growth is underpinned by the following down-side risks: • uncertainty regarding the robustness of a nascent global recovery in output and trade • a further weakening of aggregate demand consequent on continued fiscal contraction, in an environment where private sector “crowding-in” has exhibited significant inertia • further erosion of social capital under the conditions of: (a) a slower than projected decline in poverty rates, and (b) continued weak labour-market demand • vulnerability to weather-related shocks • continued low labour (and capital) productivity due to structural constraints that were previously highlighted. By retarding growth, these risks may threaten the sustainability of the current fiscal consolidation programme. In the absence of sustained growth, a fiscal consolidation programme will have to be supported by unsustainable cuts in public expenditures or additional revenue enhancement, the limits of which will be quickly reached. Such additional expenditure cuts and/or additional tax or revenue enhancing measures would further compound the pro-cyclicality of the current fiscal consolidation programme. Experience in other emerging economies operating under IMF programmes of fiscal 78
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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
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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 and 86: increased marketing and extension s
Page 87: Electricity & Water For FY 2010/11,
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,
Page 137 and 138: 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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