Building a Better Jamaica

We expect, shortly, to conclude the sale of Air Jamaica which incurred losses last year of $9 billion. We are negotiating the sale of our shares in Clarendon Alumina Production to remove the burden of production losses caused by the forward-sale contract of 2005 which is costing us almost $1 billion per month!

We are seeking to refinance Highway 2000 from which we earn no revenue but which is costing us almost $3 billion in annual interest payments.

We are still optimistic that we will be successful in divesting the rest of the sugar factories and estates because, let it be clear, the government will not be able to cover any more losses in the sugar industry and I have given clear instructions that no such request will be entertained by the Ministry of Finance.

We have appointed an enterprise team to proceed with the privatization of the Norman Manley airport.

We are pursuing real, live options to finance the new Petrojam refinery in a way that will require no financial contribution or guarantee from the government since we will not be in a position to do so. Discussions with our Venezuelan partners and possible sources of finance are being actively pursued and a joint Jamaica/Venezuelan team is to travel to Japan shortly in that regard.

We are negotiating to sell our shares in JPSCo so that we can pay down some of our debt.
Many other public assets that are not essential to government’s core functions will be sold as soon as the market can absorb them. We want a leaner government structure that is able to direct all its energies and resources to performing properly the essential functions of government.

Some of you will ask: “Have we not heard this before?” Yes, you have but this time it is different. It is different because under the IMF agreement, we won’t be left on our own. We will have to meet rigid performance tests dealing with, among other things, the fiscal deficit, inflation, debt levels and debt-to-GDP ratio. These tests will also include implementation of agreed policy and legislative measures.

We have agreed to an intensive and extensive programme of monitoring and surveillance. There is data that we will have to transmit on a daily, weekly, fortnightly and monthly basis. We will be subjected to quarterly performance tests with the first scheduled for March 31st. We are required to introduce legislation to establish a Fiscal Responsibility Framework in which we will have to present our targets to Parliament and will be held accountable for our performance in relation to those targets. So, it is not just the IMF that will be monitoring our performance; the Opposition, the media and the public at large will also be able to measure our performance. It is a “belt and braces” approach because, make no mistake, we can’t afford to deviate from this programme; we can’t afford to slip back into the ways of the past. Slackness, skylarking and failure are no longer options that are open to Jamaica.

I know that these harsh economic times weigh heavily on the very poor and vulnerable. Their pain cannot be ignored nor can they be left to wait until the economy recovers. Last year, we increased the provisions for social safety net programmes such as PATH and the School Feeding Programme. Despite the fiscal constraints, we will be increasing those provisions even further in the coming budget. NIS pensioners, too, will not be left out.

What will all this do for Jamaica? What will this do for you?
The benefits are many; the possibilities endless. ? What hope does it bring and what opportunities does it offer?

Once we curtail expenses and reduce the cost of servicing our debt, we will not have to borrow so much anymore. Once we don’t have to borrow so much anymore, our debt will come down so more money will be freed up to spend on improving education and health services, fixing roads, providing better water supplies. Once we don’t have to borrow so much anymore, interest rates will come down even more and the money will start chasing businesses and individuals to encourage them to start or expand businesses, creating new jobs, increasing production, expanding exports and earning more foreign exchange.......because money can’t remain idle; it has to find work to do. For too long, money has been busy chasing government paper. It must now get busy chasing investments, financing growth and creating jobs.

Low interest rates, low inflation, a stable exchange rate, improved public sector management and efficiency will create the kind of environment that has long existed in places like Singapore and South Korea where investment, production and job creation are the only game in town – not helping government to pay its mounting bills.

We are preparing for that new environment, preparing to fast-track that transformation.

A number of significant new projects are scheduled to come on stream in the course of this year. Tenders for the financing and build-out of the new LNG facility that will bring cheaper electricity to the country are due to be returned by mid-February. The alumina industry that accounts for 50% of our exports is seeing positive signs of recovery and the reopening of at least one of our plants this year as well as new investments is being actively pursued.

We expect to conclude the Casino legislation by next month and the Harmony Cove project involving several billion US dollars of new investment is expected to move into high gear. The new Falmouth Port is on schedule and should start receiving the new generation of mega-ships early next year.

This new, stable, strongly-supported and carefully monitored investment-friendly environment will enable us to approach the investment market with new confidence and demonstrate that Jamaica is not only anxious for business....we are ready to do business.

But it is not just the large investors that it will be able to excite. It will enable micro, small and medium-sized businesses to flourish and the government will continue to do its part in providing the support and facilities they need to get into the fast lane.

There are development applications that are awaiting approval. We have done well to speed up the processing of these applications within the 90 day timeline I had set but in an effort to hasten the start-up of these projects, I have assigned Minister Daryl Vaz to fast-track the process and ensure that all projects currently awaiting approval or subject to appeal are considered and determined within the next 30 days.