This is a two part series assessing the JLP performance in power a year on. Part II will come tomorrow.
Its just under a year now since the Jamaica Labour Party (JLP) won the General Elections defeating the Peoples National Party (PNP). So what is the achievements of the party so far? Today LBC will take a look at Three of Six (6) of the party’s achievements since taking power.
The achievements must however be juxtaposed to the situation that they found when they took over. The main one been no growth, coupled with high taxes, and austerity.
- The Country is on a solid and sustainable growth path.
In his address to the nation on March 3 after assuming office, Prime Minister the Most Hon. Andrew Holness gave a commitment to foster a partnership between the Government and the Jamaican people. He also pledged to promote an inclusive, prosperous society and to eradicate social and economic inequality. The months that followed were marked by the push to secure economic growth and job creation through initiatives that seek to restructure the country’s bureaucratic system to enable efficient and quick decision-making and to improve the ease and speed of doing business to facilitate investments. Growth of 2.3 per cent was achieved for the July to September quarter, the highest since 2007.
Government Pushes For Economic Growth
• The Prime Minister established an Economic Growth Council (EGC), led by international business tycoon, Michael Lee Chin. • The EGC has so far produced a Call to Action report, which outlines eight specific growth initiatives, with the aim of achieving five per cent growth in four years. A declaration of intent has also been signed with private sector groups, unions and civil society. The EGC will monitor the progress of the Government in achieving the growth target and will report to the country.
• The Prime Minister announced a tripartite monitoring framework for the Precautionary Stand-By Agreement (SBA) approved by the Board of the International Monetary Fund (IMF) in November 2015. The new monitoring framework will assess the fiscal and monetary indicators, as well as social and public sector issues according to the requirements of the SBA. Increased NHTBeneﬁts Mindful of the link between social development, the raising of living standards and sustainable economic growth, the Prime Minister announced a range of increased National Housing Trust Benefits in his budget presentation to Parliament.
• The measures, which took effect June 1, include interest-free loans for persons earning less than $12,000 per week; reduction of interest rate from four per cent to two per cent for contributors earning between $12,001 and $20,000 per week; while persons earning between $20,001 and $30,000 weekly are eligible for loans at four per cent, down from six per cent.
• The NHT’s Home Grants programme has been adjusted so that contributors who earn a maximum of $12,000 weekly can apply for a grant of up to $1.5 million instead of the previous $1.2 million.
• Additionally, the amount for which an applicant can apply to buy a house lot has moved from $1.5 million to $2 million.
• The Land Administration Management Programme (LAMP) distributed 1,066 new land titles for the year and 668 clarified titles.
2.Economic Reform Programme on Track.
JAMAICA REAPED significant dividends from continued steady implementation of the Economic Reform Programme (ERP) throughout the year. Notable among the gains were:
International Monetary Fund (IMF) Approval
• The multilateral organisation approved a threeyear, US$1.64 billion precautionary standby successor agreement to replace the four-year Extended Fund Facility (EFF).
• Jamaica passed its 14th and final EFF quarterly review conducted by the IMF’s Staff Mission Team near the end of the year. The country was deemed to have consistently met the key benchmarks, including the Primary Surplus Balance, which now stands at 7.25 per cent of Budget, as well the Net International Reserves (NIR), which ended the year at more than US$2.4 billion.
• Revenue inflows were also well above budget, with the outturn being more than $200 billion, or 5.8 per cent higher than projected. Economic Programme Oversight Committee (EPOC) New members were selected for this committee, set up to oversee the programme’s implementation. The entity will be co-chaired by Jamaica Money Market Brokers (JMMB) Group Chief Executive Officer, Keith Duncan, and Bank of Jamaica (BoJ) Governor, Brian Wynter. Mr. Duncan replaces Sagicor Life Jamaica Limited’s President and Chief Executive Officer, Richard Byles, who held the position for the duration of the EFF’s implementation. Multilateral Funding Support Jamaica continued to enjoy additional funding support
from other multilateral organisations.
• A US$30 million World Bank loanto further boost the national disaster and climate risk management programme. The loan, to be disbursed over a sixyear period under the Bank’s Disaster Vulnerability Reduction Project, will support the Government’s programme to reduce environmental hazards. The project, being implemented by the Jamaica Social Investment Fund (JSIF), comprises four components. These target technical assistance for improved disaster and climate resilience; risk reduction; contingent emergency response; and project administration. Specific focus will be placed on disaster response and recovery; creating a safer environment for schools; and disaster risk financing and insurance.
• A US$100 million InterAmerican Development Bank (IDB) loan to fund the ‘Financial System Reform Support Programme’ aimed at facilitating increased access to business financing. Economic Growth Third quarter growth of 2.3 per cent was recorded for the July to September period, representing the highest out turn since 2007.
This was mainly attributed to a 28.8 per cent growth in agriculture and an over two per cent spike in the hotel and restaurant sector. The Planning Institute of Jamaica (PIOJ) projects fourth quarter fiscal year growth
ranging between one and two per cent for October to December, with a similar overall forecast for 2016/17.
The total number of persons employed as at July 2016 stood at 1,186,900. This represented an increase of 39,400 persons relative to July 2015. The Statistical Institute of Jamaica’s (STATIN) Labour Force Survey indicated that this is the highest level of employment ever recorded in a single month. The number of employed males rose by 9,700 to 663,100 and employed females by 29,700 to 523,800.
Youth employment also increased by 16,200 to 152,100 persons. Conversely, unemployment declined to a five-year low of 12.6 per cent for the period. Inﬂation Down The rate of inflation continues to decline, with the out turn for the September quarter falling to 1.9 per cent. The BoJ reported that this was 0.9 per cent lower than the figure for the June quarter. It further indicated that the September out turn represented the eighth consecutive quarter in which inflation declined, with the rate for the 2016 calendar year projected to fall below two per cent.
Improved International Rating.
Jamaica’s sovereign senior unsecured and provisional shelf ratings was upgraded from CAA2 to B3 by international financial rating entity, Moody’s Investors Service, which revised its outlook for the economy from stable to positive. The factors supporting these outcomes include: significant and sustained consolidation and strong commitment by the Government to reduce the national debt; and significant improvement in the current account, as well as more favourable external conditions.
Income Tax Threshold.
The Government embarked on phase one implementation of the new $1.5 million income tax threshold on July 1. The undertaking, being carried out in two segments, saw the initial figure increased to $1,000,272, up from $592,800. Under the initial phase, persons earning up to $19,236 weekly or $83,356 monthly will pay no income tax. This provides them with an additional $8,489 on their salaries.
This action by the Government has benefitted more than 250,000 Jamaicans. The threshold will move to $1.5 million as of April 1 this year, resulting in persons earning up to $125,008 being exempt from paying income tax. This will amount to an additional $10,413 on their salaries. Income ranging between $796,536 and $6 million will continue to be taxed at 25 per cent, while the rate on earnings exceeding $6 million,in July was increased from 25 to 30 per cent.
3 Government Going for Sustainable Growth.
Upon taking office in March 2016, Prime Minister, the Most Hon. Andrew Holness, announced the formation of the Ministry of Economic Growth and Job Creation (MEGJC), which is charged with drafting the blueprint to drive economic growth and sustainable development. The Ministry brings together seven critical portfolio areas: Land, Environment, Climate Change, Investment, Water and Wastewater, Housing and Works.
It has oversight for 48 Agencies, Departments and Divisions, which are responsible for approximately 68 subject areas. Throughout the year, the Prime Minister met with directors and heads of agencies in the Ministry where he urged them to ensure that a supportive environment for the private sector is facilitated. He said the Ministry was established to be the centre of policy development, facilitation and implementation in Jamaica.
• On March 23, the Prime Minister officially opened the North-South leg of Highway 2000, which was constructed at a cost of US$600 million. The 67-kilometre stretch extends from the Mandela Highway near Caymanas in St. Catherine to Mammee Bay in St. Ann. It strategically links the northern and southern sections of the island, and provides opportunities for investment projects.
• The Government finalised arrangements with the Export-Import (EXIM) Bank of China to access loan funding for road improvement projects in the southeastern and southwestern sections of Jamaica. The projects will cost US$384 million, US$57 million of which will be provided by the Jamaican Government.
• Work is advanced on the widening of the Mandela Highway from a four to six lane carriageway. This project, which started in August, is valued at US$64 million and is being done through the Major Infrastructure Development Programme (MIDP). Improvements to Roads and Bridges
• The National Works Agency (NWA) commenced the US$20.5 million reconstruction of the Marcus Garvey Drive Road in March. This project
includes the widening of approximately 2.44 kilometres of roadway and the installation of sidewalks and a median.
• The $35 million realignment of the Grange Lane and Municipal Boulevard intersection to form a four-way cross road with Passagefort Drive was completed in November. This was funded by the Road Maintenance Fund.
• The Harbour Head Bridge in Port Morant was replaced at a cost of $50 million.
Work is underway for the $700 million construction of the Kupius Bridge in Clarendon and the $35 million installation of a bridge at Rentcombe in St. Catherine.
• Several road rehabilitation and drainage improvement works were carried out by the NWA, including the $432 million improvement of the Tombstone to Gutters stretch in St. Elizabeth; the $700 million work from Mineral Heights to Dawkins in Clarendon; and $400 million work from Riley-Dias to Glasgow in Hanover.
• The NWA also spent $65 million on sea defence works along the Falmouth coastline. The project, which was completed in November, involved the construction of retaining and parapet walls and the reinstatement of sections of roadway. Facilitating Small Business
• A Memorandum of Understand was signed
for US$7.2 million in loans and grants to be made available to micro, small and medium enterprises (MSMEs) in the tourism and agricultural sectors, to finance climate change adaptation initiatives. This is being implemented under the Adaptation Programme and Financing Mechanism Project, a component of the Pilot Programme for Climate Resilience (PPCR) in Jamaica, with funding from the Inter-American Development Bank (IDB).
• Through the Development Bank of Jamaica’s (DBJ) Innovation Grant from New Ideas to Entrepreneurship (IGNITE) programme, 27 entrepreneurs were awarded up to $4 million each in grants totaling $37.5 million. The entrepreneurs received up to 70 per cent of a project cost, to implement innovation activities in the creation and growth of new firms in the productive sectors.