The Jamaica Stock Exchange hosted its 9th Regional Conference on Investments & the Capital Markets from Tuesday, January 21 to Thursday, January 23, 2014 at the Jamaica Pegasus Hotel under the theme “From Productivity to Prosperity: Regional Survival & Growth through Investments”.
The Conference “kicked-off” with the Opening Ceremony on Tuesday, January 21, 2014 where the Keynote Speaker, The Hon. Portia Simpson-Miller, Prime Minister of Jamaica, addressed the topic “Looking Beyond the IMF: Achieving Vision 2030”. Please see her presentation below:
THE MOST HON. PORTIA SIMPSON MILLER
PRIME MINISTER OF JAMAICA
TO JAMAICA STOCK EXCHANGE INVESTMENTS
AND CAPITAL MARKETS CONFERENCE 2014
AT THE JAMAICA PEGASUS HOTEL
TUESDAY, JANUARY 21, 2014
TOPIC: “LOOKING BEYOND THE IMF: ACHIEVING VISION 2030 JAMAICA”
Distinguished Ladies and Gentlemen
I am delighted to be present at the opening of this annual conference organized by the Jamaica Stock Exchange, focusing on investments and capital markets. I welcome all participants, particularly, those who are visitors to our country.
The central theme of this year’s conference‚ ‘From Productivity to Prosperity: Regional Survival and Growth through Investments’, is a most timely and interesting one. This presentation, Looking Beyond the IMF: Achieving Vision 2030 Jamaica‛ provides me with the opportunity to contextualize some of the main initiatives which have been taken by my Administration, over the past two years.
It also allows me to provide a clear indication of expected developments over the medium term. As everyone in the audience and in the country is aware, Jamaica entered into a new 4-year Extended Fund Facility (EFF) with the IMF in May 2013 after a prolonged period of negotiations.
There was constant debate in the various organs of the media as to why the negotiations took so long. Part of the reason for the delay was simply that the task of our negotiators, led by Finance Minister, Dr the Hon Peter Phillips, was made more difficult, as the country’s track record, in terms of carrying out firm and solemn commitments, contained in the last Standby Agreement, had been unsatisfactory.
The reality is that, at that time, the government of the day had failed to meet the deadlines and structural benchmarks set by the IMF; which led to the belief that the Agreement had been abandoned. Consequently, the IMF and the other multilaterals began operating from a position of ‘prove to us that you are worthy of our trust’.
The onus was on Jamaica to prove that it was a reliable partner. The present agreement, like most IMF Agreements, focusses on improvement in our fiscal situation – ‘fiscal consolidation‛ is the technical term used. The telling reality is that it was impossible for any government to continue running the level of deficits which had been accumulated in recent years.
Let me put it as bluntly as I can. Continuation of that approach would invariably lead to total collapse of the economy with no creditor, either local or foreign, willing to lend to us. There was no fundamental disagreement between the government and the external financial entities, led by the IMF, in terms of the eventual objectives to be attained.
My Administration was equally concerned with ensuring that, in achieving these objectives, the population was still presented with a clear basis for hope of the future. Furthermore, whilst accepting that adjustments were unavoidable, my Administration was unyielding in our insistence that the most vulnerable groups and individuals would be given the maximum possible protection.
I wish to make very clear the following point, not only for local audience, but also for the external markets. My Administration does not, in any way, seek to resile from taking responsibility for the tough decisions which had to be made. We have not presented these decisions as being impositions by the IMF. That would be a ‘cop out’. Whilst we may disagree with the Fund in terms of the pace of some of the adjustments, we accept that the adjustments are necessary.
This disagreement in terms of the pace of implementing agreed objectives is not unique.
However, given our greater understanding of the structure of our society and economy we have a greater insight into the sensitive pressure points and what steps could lead to unbearable repercussions on the most vulnerable and possibly lead to disintegration of the society. We wish to re-state that we take full responsibility for the policy actions which are contained in the Extended Fund Facility and we fully believe that in the long term, true benefits will accrue to the society.
For the record, the 4-year Agreement will lead to the disbursement of just under (US)$950 million as balance of payments support. Of great importance is that reaching an agreement with the IMF, has triggered a release of other concessionary funds from other multilateral and bilateral partners.
Perhaps the most critical objective to be attained during the life of the Extended Fund Facility is a sharp reduction in our debt ratios. It is still not fully understood that in the four-year period, 2007-2011, our debt to GDP ratio grew rapidly from 107% to over 140%. Any such ratio is unsustainable and an explicit objective of the Extended Fund Facility is to reduce this ratio to below 100% in the medium term.
THE OBJECTIVES OF VISION 2030
I now turn to the role of Vision 2030.
The Jamaican members of the audience know, and hopefully our visitors will come to know that Vision 2030 is a comprehensive strategic development plan which aims to move Jamaica to the status of a ‘developed country‛ by 2030. The vision statement of the plan is to make Jamaica ‚the place of choice to live, work, raise families and do business‛. Vision 2030 explicitly, and implicitly, addresses not only macroeconomic targets but also, of equal importance, critical social and cultural development objectives.
One of the ironies which face analysts seeking to classify Jamaica’s socio-economic situation is that in several fields, we have long achieved ‘developed country’ status, often surpassing the performance of countries with higher per capita income.
I make reference, not only to our globally-acclaimed achievements in the fields of culture and sport, but also to the fact that in an important social sector such as health, our profile is equivalent to that of most highly developed countries. So whilst we recognize the unavoidable requirements associated with attaining the targets contained in the IMF Agreement, achieving the broader objectives of Vision 2030 is of equal significance.
A successful completion of the IMF Agreement is seen by my Administration as a necessary, but certainly not a sufficient condition, for moving our country forward. For that reason I wish to explore with you certain other critical elements of the policies and programmes being pursued by my Administration.
ECONOMIC GROWTH AND EXPANDED EMPLOYMENT
Ladies and gentlemen:
As most persons here would be aware, during my career in the public service, I have held various ministerial positions. However, the position which has been dearest to my heart is Minister of Labour and Social Security. I feel this way about that position as it covers the critical areas of employment and the establishment of a sound social security system to provide the stability for our Jamaican families to grow and prosper.
We recognize, and indeed our multilateral colleagues also accept, that there is a great need to stimulate expansion in the economy and job creation, even as we remain steadfast in our pursuit of fiscal consolidation. We cannot ignore the fiscal situation which our country now faces, and will continue to face over the medium term.
Even whilst we accept this reality, we do not use it as an excuse. Rather, that reality check serves to stimulate our creativity in moving forward. Within the context of the limited ‚fiscal space‛ allowed by the Extended Fund Facility, we have set about devising ways of encouraging and stimulating growth activities in the economy. It is not possible for me to identify all the various initiatives on which my Administration has embarked, as time will not allow. However, given the nature of this conference, I take this opportunity to share with participants the reason behind the policies which we are pursuing. I will also share a few of the specific projects which provide the ‚substance‛ for the policy structure, which we have embraced.
In pursuit of our objective of economic and employment growth, we are seeking to resuscitate those traditional economic activities in which we have already established competence and expertise capable of meeting world competition. Efforts are underway in agriculture and tourism to increase productivity levels and significantly increase output in each sector. There is a need to involve members of the population who have to date been omitted from full participation.
The Agro-Parks initiative represents one concrete example whereby small farmers are being given the opportunity to play a greater role in the expansion of this most important sector.
A second plank of our aggressive plan to grow the economy and expand employment is the continued development and modernization of physical and communication infrastructure.
There is a significant difference in how this objective is to be attained compared to the approaches of the past. The investment capital needed for this expansion and modernization will not be provided by the Government of Jamaica. Rather, in all the sectors, our emphasis is on attracting investment capital to areas which were once considered the exclusive province of the State.
Over the medium term, our electricity services will be expanded and modernized bringing the cost of electricity to levels which will allow our producers to compete internationally. This will partly relieve the financial pressure, which the service presently imposes on household incomes.
Our telecommunications network can be compared with those in most first world countries. There are concrete plans to further improve this service to facilitate development of the ICT sector. This will play a more significant role in the expansion of economic activity and employment.
Perhaps the area where our approach to attracting investments is most striking relates to the physical infrastructure which was once seen as the exclusive responsibility of the State.
Over the medium term, there will be significant investments in….:
ü Highway construction with the prime project being the North/South leg of Highway 2000,
ü Modernization of the Kingston Container Terminal,
ü Expansion of the Sangster International Airport in Montego Bay, as well as
ü Privatization and modernization of the Norman Manley Airport in Kingston.
These projects, which are either already underway, or will be, within the next year or so, will significantly improve Jamaica’s ability to attract investments in manufacturing and the service industries. The activities in these sectors will serve to place Jamaica in a position to more fully exploit its unique geographic location.
My Administration intends to exploit the country’s strategic geographical position by developing Jamaica as an international Logistics Hub. A recent survey has revealed that the overwhelming majority of the population remains unclear as to what this term means.
The Administration’s intention is to maximize our unique geographical location, in close proximity, both to the richest consumer markets in the world, as well as to the Panama Canal. Our expectation is that this development will lead to significant growth in transhipment activity, in tourism, in light manufacturing as well as in the ICT sector.
In order to ensure that these developments take place, there will be the need for close collaboration between the various support sectors such as education and training, and health. I wish to assure you that these are not ‘pipe dreams’.
Already work is well underway with the construction of the North/South link of Highway 2000.
We intend to open Section 2 (Linstead and Moneague) by mid-year with Sections 1 and 3 (Kingston to Linstead and Moneague to Ocho Rios, respectively) scheduled for opening in early 2016.
The positive spin-offs which will result from this investment are significant.
I am particularly excited about the opportunities resulting from the drastically-reduced travel times, for developing Kingston and Spanish Town as tourism centres based on the rich historical and cultural heritage of both urban centres. The plans for the privatization of the Kingston Container Terminal are for advanced.
We expect to select the preferred concessionaire, who will be investing significant resources into expansion and development of the port facilities. Whilst the IMF Agreement has received much public attention in terms of the economy, the actions being taken to stimulate growth and economic expansion are of greater significance. These are expected to yield benefits, leading us to achieving our major objectives articulated in Vision 2030.
GREATER EQUITY AND ACCESS TO OPPORTUNITIES
My administration will never lose sight of the fact that our major objective is to systematically raise the living standards of the country, in general and, in particular, those at the bottom of the socio-economic ladder.
Rapid economic growth is a laudable objective, but unless such growth provides greater opportunities for those who are anchored at the bottom, the objectives listed in Vision 2030 will remain mere illusions for the majority of the population. We are doing all we can to pit in place the facilities which will provide new opportunities for the poor; within the constraints of the limited fiscal resources available.
We have sought to carve out resources to be allocated to programmes specially designed to alleviate the challenges faced by those sectors of the society who would continue to be mired in poverty including those considered to be the working poor, without the assistance of the State. The reform of our education system is on in earnest, in order to open up opportunities for the entire population. This objective will remain a mainstay in our social and economic planning.
We recognize that unless we facilitate the environment that provides opportunities for upward socio economic mobility for the majority of the population, it will be impossible for the nation as a whole to progress.
Ladies and gentlemen, domestic and international investors:
My Administration fully recognizes the need to be fiscally prudent and to stay the course in reducing the debt ratios and the deficit. Clear signs of an expanding economy will provide those who presently see little chance of an improvement in their lives, with the notion that they have the opportunity to benefit from the growth and prosperity which will take place. It is within this context that we remain steadfast in terms of our commitment to the objectives laid out in Vision 2030. It is also in this context that we intend to successfully meet the conditionalities of the Extended Fund Facility negotiated with the IMF.
For us the IMF Agreement is not an end in itself, but rather a stepping stone towards achieving economic growth with equity on our way to meeting the objectives laid out in Vision 2030. There is an indelible and undeniable link between economic growth and social development; between the quality of the economy and the quality of life of all citizens.
That is the substance of the message that I seek to communicate whenever I speak about ‘Balancing the books while balancing People’s Lives.’ Every Jamaican deserves the opportunity for a balanced life. Every Jamaican must have an opportunity to earn a decent living, make a home and raise their families in beautiful Jamaica.
We propose to do our best to leave no one behind. This is the philosophy which will shape our dialogue and it is against this background that we rise to meet the challenges of today and achieve the vision for tomorrow. This is the only practical way to economic development and social progress.
We have seen tough times before and we have overcome. My Government intends to lead our resilient people, our industrious people to greater prosperity. We will overcome the social and economic challenges we face. We will make Jamaica the place of choice to live, work, raise families and do business. The Government is committed to this Vision. We welcome your active involvement in our development process.
HD Carbury reminds us that;
It takes a mighty fire to create a great people
It takes a mighty fire to smelt true steel
To create and temper steel needs patience and endurance,
But When that steel is smelted
and when that steel is cast,
Oh what a steel and what a people shall my people be
but oh what steel and what a people are my people.
I thank you. God bless you and good night.