PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

2011/12). These extreme weather events have also contributed significantly to either
undesirable budget imbalances or unplanned (and oftentimes, unproductive) cuts in
expenditures to finance post-disaster rehabilitation.
In light of these imperatives, the PIOJ is proposing adoption of a Growth-Inducement
Strategy focused on a mix of short and medium–term measures featuring:
• Targeted infrastructure spending, which is intended to improve the resilience of
the built environment, contribute to increased agricultural production especially
through rebuilding and maintaining farm roads, generate an immediate injection
of aggregate demand and income, and improve social inclusion in volatile and
vulnerable communities.
• A targeted and broad-based Community Renewal Programme, aimed at
ameliorating crime and improving social cohesion in targeted communities.
• A package of medium-term policy reforms, including tax reform, which address
the removal of structural constraints and improving cost-competitiveness of the
economy.
• A strengthening of value chain linkages between tourism, agriculture, agroprocessing,
and local services.
Early adoption and implementation of this Growth Inducement Strategy is projected to
provide significant immediate benefits beginning in 2011 in terms of the following key
objectives:
a. job creation
b. GDP growth
c. poverty reduction.
In addition, these initiatives offer a new opportunity to unlock latent wealth tied up in
potentially productive assets (financial assets, physical capital, land, and labour) that now
lie idle and, thereby, to create a strong platform for sustaining the momentum of growth
in the medium and longer term.
Based on an analysis of economic impact, primarily using the PIOJ’s Input-Output
model, a package of short-term measures which target an acceleration of public works
and community renewal projects is projected to yield the following benefits:
Increased economic growth, employment and tax revenues: relative to a
baseline projection of 2.1% for 2011, accelerated short-term measures could yield
an additional 1.6 percentage points (or $19.1 billion) to 3.1 percentage points (or
$37.6 billion) of real GDP growth. Higher GDP growth could result in an
additional 3,075 - 3,142 jobs, and generate an additional $4.5 billion - $8.9 billion
in tax revenues. These revenues would represent a net inflow to the treasury,
since the PIOJ proposals calls for the utilization of resources that have already
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