Forward with the business of the country
ID: INTERACTIVE DIALOGUE
DAVID MULLINGS
Sunday, January 01, 2012
Firstly I must congratulate the majority of my fellow Jamaicans for what seems like the most mature election to be held to date. It seemed that more people openly discussed which party they were voting for and why. The political violence has continued the downward trend and reports of voter intimidation seem to be fewer.
It is a sign of progress when a country can have peaceful elections. This progress is good, but the next five years require additional progress in a number of areas during a challenging period for Jamaica, notwithstanding what else could transpire in the years to come. I admit I get very worried when I think about the impact on oil prices if Iran really does block the Strait of Hormuz, one of the most important shipping points for oil.
Areas and Targets
The 2012 Doing Business Report published by the World Bank ranked Jamaica 88 out of 183 countries, down from 48 out of 155 countries in 2006. Jamaica also scored worst in the region and 172 out of 183 countries for paying taxes in that report. In 2011, Jamaica ranked 86th out of 182 countries in Transparency International's Corruption Perception Index, a far cry from the 2003 ranking of 57th out of 133 countries. For the first time in recent memory, Forbes magazine ranked Jamaica among the 10 worst economies in the world, ranking us at number five but blaming it mostly on the global financial crisis and the hit to tourism revenue (which has not been talked about by the last Government).
According to the national crime statistics, 2010 and 2011 were the first years since 1999 that all crimes were down. This was the result of citizens standing up and refusing to allow their government to be captured by criminals and criminal affiliations, not because of some brilliant crime strategy put forward by the sitting Government. Successive governments have failed to deal with crime, but the people succeeded. However, the new Government has to put in place a plan and execute it, because the clear-up rate for murders in Jamaica is still below 30 per cent after decades. Little has improved that glaring statistic since the late 1990s.
Between 1996/97 and 2002/3 our debt to GDP ratio grew from 71.3 per cent to 124.7 per cent. It has continued growing, now hovering around 130 per cent and in absolute terms it grew from $923 billion in March 2007 to close to $1.6 trillion today, a 60 per cent increase in four years, which looks massive but is in line with the growth of sovereign debt around the world in response to the recession.
To have a reasonable idea of what can be expected over the next five years, one must first consider what we know is going to happen during that time:
1) The Stand-By Arrangement (SBA) with the IMF ends this year and full repayment is due within three - five years. That means Jamaica must find US$1.24 billion to pay the IMF back by 2017, barring a new arrangement that makes changes.
2) Some of the bonds that were swapped to longer maturities during the JDX will come due within the next five years.
3) The IMF requires the public sector to be reduced to less than 10 per cent of GDP.
4) Cuba is opening up for investment and for business.
5) Oil will not be getting cheaper.
In light of these issues, Jamaica must turn around the rankings I listed earlier, because a stable exchange rate (artificially maintained as it may be) and low inflation alone do not lead to growth and certainly will not generate enough growth to get poverty back to the level of the 2000s nor allow Jamaica to pay back the IMF and JDX bonds without more borrowing.
Perceptions of corruption must decrease. The same political will found to defend criminals must now be found to fight crime so that investors see Jamaica much more favourably; tax reform must take place and efficiency at all levels of government, especially government-owned entities, must be top priority.
This new administration starts out with advantages, especially not having some massive burdens running losses in the name of the government. It also has the disadvantages of rankings that have been going the wrong way for a few years and the difficult task of reversing that trend in a tough global economic environment.
I would not be surprised to see a new IMF deal, an Extended Fund Facility this time instead of a Stand-By Agreement, but time will tell. It is good to see ideas like the Falmouth cruise ship pier, Montego Bay Convention Centre, divesting management of the international airports and the introduction of casinos continue from the PNP administration to a JLP Government. With this new administration I am sure that more ideas with bi-partisan support can be identified and executed with the long-term future of Jamaica in mind, and not merely to win votes in five years.
Finally, I have been very disappointed with the way some Jamaicans have reacted to the laudable and progressive view that the sexual orientation of a person has nothing to do with their ability to run a ministry and contribute to the future of Jamaica. That is not surprising, however.
Those who know better should do better, and while I hope Jamaica makes progress in the areas I previously listed, I also hope that the maturity that has finally come to political debates will also find its way into discourse about prejudice.
Happy New Year and happy birthday to my brother who turns 30 today.
David Mullings was the first Future Leaders Representative for the USA on the Jamaican Diaspora Advisory Board. He can be found on Twitter at twitter.com/davidmullings and Facebook at facebook.com/InteractiveDialogue
Read more: http://www.jamaicaobserver.com/colum...#ixzz1iivludhz
ID: INTERACTIVE DIALOGUE
DAVID MULLINGS
Sunday, January 01, 2012
Firstly I must congratulate the majority of my fellow Jamaicans for what seems like the most mature election to be held to date. It seemed that more people openly discussed which party they were voting for and why. The political violence has continued the downward trend and reports of voter intimidation seem to be fewer.
It is a sign of progress when a country can have peaceful elections. This progress is good, but the next five years require additional progress in a number of areas during a challenging period for Jamaica, notwithstanding what else could transpire in the years to come. I admit I get very worried when I think about the impact on oil prices if Iran really does block the Strait of Hormuz, one of the most important shipping points for oil.
Areas and Targets
The 2012 Doing Business Report published by the World Bank ranked Jamaica 88 out of 183 countries, down from 48 out of 155 countries in 2006. Jamaica also scored worst in the region and 172 out of 183 countries for paying taxes in that report. In 2011, Jamaica ranked 86th out of 182 countries in Transparency International's Corruption Perception Index, a far cry from the 2003 ranking of 57th out of 133 countries. For the first time in recent memory, Forbes magazine ranked Jamaica among the 10 worst economies in the world, ranking us at number five but blaming it mostly on the global financial crisis and the hit to tourism revenue (which has not been talked about by the last Government).
According to the national crime statistics, 2010 and 2011 were the first years since 1999 that all crimes were down. This was the result of citizens standing up and refusing to allow their government to be captured by criminals and criminal affiliations, not because of some brilliant crime strategy put forward by the sitting Government. Successive governments have failed to deal with crime, but the people succeeded. However, the new Government has to put in place a plan and execute it, because the clear-up rate for murders in Jamaica is still below 30 per cent after decades. Little has improved that glaring statistic since the late 1990s.
Between 1996/97 and 2002/3 our debt to GDP ratio grew from 71.3 per cent to 124.7 per cent. It has continued growing, now hovering around 130 per cent and in absolute terms it grew from $923 billion in March 2007 to close to $1.6 trillion today, a 60 per cent increase in four years, which looks massive but is in line with the growth of sovereign debt around the world in response to the recession.
To have a reasonable idea of what can be expected over the next five years, one must first consider what we know is going to happen during that time:
1) The Stand-By Arrangement (SBA) with the IMF ends this year and full repayment is due within three - five years. That means Jamaica must find US$1.24 billion to pay the IMF back by 2017, barring a new arrangement that makes changes.
2) Some of the bonds that were swapped to longer maturities during the JDX will come due within the next five years.
3) The IMF requires the public sector to be reduced to less than 10 per cent of GDP.
4) Cuba is opening up for investment and for business.
5) Oil will not be getting cheaper.
In light of these issues, Jamaica must turn around the rankings I listed earlier, because a stable exchange rate (artificially maintained as it may be) and low inflation alone do not lead to growth and certainly will not generate enough growth to get poverty back to the level of the 2000s nor allow Jamaica to pay back the IMF and JDX bonds without more borrowing.
Perceptions of corruption must decrease. The same political will found to defend criminals must now be found to fight crime so that investors see Jamaica much more favourably; tax reform must take place and efficiency at all levels of government, especially government-owned entities, must be top priority.
This new administration starts out with advantages, especially not having some massive burdens running losses in the name of the government. It also has the disadvantages of rankings that have been going the wrong way for a few years and the difficult task of reversing that trend in a tough global economic environment.
I would not be surprised to see a new IMF deal, an Extended Fund Facility this time instead of a Stand-By Agreement, but time will tell. It is good to see ideas like the Falmouth cruise ship pier, Montego Bay Convention Centre, divesting management of the international airports and the introduction of casinos continue from the PNP administration to a JLP Government. With this new administration I am sure that more ideas with bi-partisan support can be identified and executed with the long-term future of Jamaica in mind, and not merely to win votes in five years.
Finally, I have been very disappointed with the way some Jamaicans have reacted to the laudable and progressive view that the sexual orientation of a person has nothing to do with their ability to run a ministry and contribute to the future of Jamaica. That is not surprising, however.
Those who know better should do better, and while I hope Jamaica makes progress in the areas I previously listed, I also hope that the maturity that has finally come to political debates will also find its way into discourse about prejudice.
Happy New Year and happy birthday to my brother who turns 30 today.
David Mullings was the first Future Leaders Representative for the USA on the Jamaican Diaspora Advisory Board. He can be found on Twitter at twitter.com/davidmullings and Facebook at facebook.com/InteractiveDialogue
Read more: http://www.jamaicaobserver.com/colum...#ixzz1iivludhz
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