JTB's Philip Rose, Dr. Omar Davies, Jamaica's H-C Sheila Sealy Monteith and JN's Jerrold Johnson.
JTB's Philip Rose, Dr. Omar Davies, Jamaica's H-C Sheila Sealy Monteith and JN's Jerrold Johnson.

Jamaican gov’t focusing on growth and jobs

By Admin Wednesday September 11 2013 in News
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In the last three decades, Jamaica has faced low growth, serious social challenges and public debt that is among the highest in the world.

 

The International Monetary Fund (IMF) recently approved a US$932 million external arrangement that will help create conditions for sustained growth through a significant improvement in the fiscal and debt positions and in competitiveness.

 

The IMF loan was contingent on Jamaica signing up most of its domestic-law bond holders. The six major owners of Jamaica’s bonds have agreed to participate in the exchange – the second in the last three years – that will also swap about $9 billion in existing debt for bonds with later maturity dates and lower interest payments.

 

“It’s a tough program,” Jamaica’s Minister of Transport, Works & Housing Dr. Omar Davies said in Toronto last week. “It calls for compression of government spending and significant taxation increases…The objectives of an IMF agreement is about laying the basis for greater stability and predictability and not about growth. While the IMF will write about growth, they are concerned about bringing the fiscal deficit under control.

 

“We need to look for growth from other areas and that’s where my ministry comes in in terms of developing projects in Transport and Works that will lead to growth in the economy and employment which we seek.”

 

A former Finance Minister, Davies acknowledged that a large portion of that debt is tied to investment in infrastructure projects that in some instances have been mismanaged.

 

“Traditionally, it’s expected that the state will finance the development of this infrastructure,” he said. “When the impact of the debt hit us, we sought another model to identify infrastructure projects and then bring private investors in to put up the capital and, in return – in order to prevent them being subjected to the whims of a cabinet determining rates – you take that decision-making about rates etc. out of the hands of cabinet.”

 

A decade ago, the Airports Authority of Jamaica turned over the modernisation and expansion of Montego Bay’s Donald Sangster International Airport to a private consortium.

 

“That experiment went through and has been successful,” said Davies. “We have a state-of-the-art, first-class airport but not a single dollar of debt is owed by the Jamaican government. Having hit on that model, we moved on to the toll road system. In that one, there was some involvement of the government, but the major investors are the French.”

 

The North-South highway link represents one of the largest investments in Jamaica. China Communications Construction Company has invested US$601 million into the 68-kilometre toll road running from Caymanas to Ocho Rios.

 

Davies announced that China Harbour Construction & Engineering Company is interested in investing US$ 1.5 billion in a new transhipment port and an economic zone that will create employment for 2,000 workers during construction and 10,000 when the project is completed.

 

He however pointed out that the location they have identified for the project – Goat Islands and nearby Portland Bight – are protected areas.

 

“I have asked the Port Authority to see what the potential implications in terms of the environment are and what steps can be taken,” said Davies. “We are as concerned as anyone else. Our definition of the environment also relates to human beings and there is no greater danger to the environment than persons living in abject poverty who feel that they have to take action in their own defence. No shortcuts will be taken.”

 

An assistant professor at Stanford University prior to returning to Jamaica in 1976 to pursue a political career, Davies is in the process of streamlining his ministry and the operations of its various agencies. He said the Kingston Container Terminal, which is the country’s main seaport, the Norman Manley International Airport in Kingston and the Jamaica Railway Corporation, will be privatised.

 

Davies headlined the 10th Outlook for the Future forum in Toronto last week to address key issues affecting the country. The theme was “Major Infrastructure Projects: Implications for Jamaica and Investment Opportunities for Investors and Jamaicans in the Diaspora.”

 

Professor Gordon Shirley, who last week assumed the role as deputy chairman of the Jamaica Port Authority, and National Road Operating and Constructing Company managing director Ivan Anderson, accompanied Davies on the trip.

 

Shirley’s appointment comes a critical time when Jamaica is seeking to extend its port facilities to capitalize on opportunities that could accrue from the Panama Canal extension.

 

“We want to ensure that when the Panama Canal is upgraded, our port is deepened to allow for access of large vessels and it’s operated at a world-class level,” said Shirley who is on secondment from the University of the West Indies where he’s the pro vice-chancellor and principal of the Mona campus. “We also want to improve the business environment, put in place systems that are expected globally, upgrade our dry docking operations and ensure that the townships that surround our ports are developed.”

 

On November 1, Shirley will become the Port Authority’s chief executive officer, replacing Noel Hylton who held the position for 40 years.

 

Anderson said provision was made in the agreements signed with the Chinese for Jamaicans to be engaged in the road projects and benefit from the Chinese expertise.

 

“In that concession agreement, only a certain amount of work permits can be issued and there is a pre-determined number of Jamaicans that have to be employed,” he added. “Also included is a major training component. The next time we want to build a project like this, we will use our own people.”

 

Organized by Jamaica National Building Society (JNBS) and its Foundation, the Outlook for the Future forum was launched a decade ago.

 

“These meetings represent an opportunity for Jamaicans and Friends of Jamaica to participate in the dialogue about Jamaica,” said JNBS general manager Earl Jarrett. “Jamaica and its Diaspora amount to about six million and we all agree that the country’s future must include the participation of its Diaspora.”

 

RON FANFAIR

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