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Overselling Government to reluctant investors
Published: Friday | January 24, 2014
Richard Byles, co-chairman of the Economic Programme Oversight Committee. - File
Aubyn Hill, Financial Gleaner Columnist
Jamaica has passed two of its quarterly IMF-directed tests agreed under the fund's Extended Fund Facility (EFF) with the Government.The co-chairman of the Economic Programme Oversight Committee (EPOC), Richard Byles of Sagicor, is quoted as saying that the "outlook of the EPOC is that of continued cautious optimism that we will meet all of the IMF targets."
He is assured to the point of certainty that Jamaica will meet the third-quarter targets given the NIR figure of US$1.05 billion and a primary surplus number which was three per cent above the target at December 2013.
The NIR target was US$836.5 million and while the December out-turn was US$211 million higher than the target, the NIR level was only about a half of what the current administration inherited when it came to office in December 2011.
If the EPOC co-chairman's expectations hold for the third-quarter IMF test, Jamaica will still face the formidable challenge of having to meet another 12 quarterly tests under the EFF.
It would appear that Mr Byles is the co-chairman who has either been designated or has made the personal choice to don the mantle of 'Optimist in Chief' to highlight good or changing-to-good economic news. Byles is earning the perception as the cheerleader for the Government's good economic changes - driven almost exclusively by the IMF - and clearly first among equals as encourager for an apparently reluctant lot of investors in the private sector.
To be fair, Richard Byles has a tough task. He is of the private sector but his declarations as head of EPOC will reflect GOJ performance - good or bad. As a major investor in the Jamaican economy as the CEO of Sagicor, it is in his interest for the Government to be seen to be doing well - parts of his financial empire are regulated by the same Government - and when one hears him speak it is clear that he believes what he says.
His co-chairman, the governor of the central bank, Brian Wynter, cannot play the spokesman role Byles has adopted since the governor is much more restricted and must be very circumspect, given his official position.
His experiences must also tell him that after 40 years of really bad government by many bad politicians of all stripes, and by many in this current administration, investors will want to see a lot more positive performance over a longer period of time from the Government, and more than two quarters of passing IMF targets, in order to put down serious new money in the Jamaican economy.
The balancing of roles between cheerleader and an oversight inspector at EPOC, the need to encourage investors to invest so early in the game - after JDX and NDX one and two - and the debilitating depreciation of the Jamaican dollar over the last year all form the horns of the dilemma faced by Richard Byles.
DON'T LET GOJ OFF THE HOOK
When the tax package and a raft of other IMF-deadline-meeting legislation were swept, almost literally, through Parliament late last year, there were piles of congratulations heaped on the Government for its 'historic' legislative achievements.
Never mind that many pieces of legislation were late, some avoided due parliamentary debate and, in any event, that is what our legislators are supposed to do.
Kudos must go to ministers Peter Phillips and Mark Golding and their teams of technicians, as well as the experts at the offices of the chief parliamentary counsel and attorney general. It is no doubt a sign of how low our standards have fallen that normal work is seen greeted as exceptional.
Much worse, I believe, is the erroneous view expressed by many that the Government has 'done its part', or 'done enough', and it is the private sector which must step up - immediately, if not before - to plunk down its money in yet unstudied projects, in an uncertain economic climate and without any evidence of how the new legislation will be implemented.
How many laws investors know are on our books that are not implemented or are capriciously or subjectively enforced? How many statutory regulations are enforced with similar patchiness, nepotism or with bias towards friends?
The optimists and political supporters must remember that money is very timid and seeks evidence of welcome and security. After decades of difficulty to do business in Jamaica and the lack of security with NDX and sliding-dollar clarity, investors will take time to tiptoe back into this economy.
The encouragers need to factor time into their encouragement equation.
Having said that, those investors who go into the market early get a chance at the big rewards which, along with possible big losses, accompany the big risks which will be taken by intrepid first-movers.
I certainly have been plugging for the economy to grow and private investment money is needed for that to happen. But it is the Government that must continue to foster and nurture an enabling environment.
The Government is still too big, too costly and far too difficult to deal with. In too many instances, it is unfriendly and unserving in the extreme. Ease of doing business? We have a far way to go.
While the private sector is to be encouraged to invest, let us not get too euphoric about some worthwhile legislation being passed. We must not let the Government off the hook to get its house in order and, thereby, encourage investment and economic growth.
Dr Peter Phillips is optimistic, too, but he keeps repeating that the job to recovery is just started -- and he is right.
Those with a ruthless objectivity know that the Government is the single largest impediment to private investment and growth, and therefore potentially largest enabler of economic growth in the short and medium term.
Aubyn Hill is the CEO of Corporate Strategies Limited and was an international banker for more than 25 years.Email: writerhill@gmail.comTwitter: @HillAubynFacebook: facebook.com/Corporate.Strategies
Published: Friday | January 24, 2014
Richard Byles, co-chairman of the Economic Programme Oversight Committee. - File
Aubyn Hill, Financial Gleaner Columnist
Jamaica has passed two of its quarterly IMF-directed tests agreed under the fund's Extended Fund Facility (EFF) with the Government.The co-chairman of the Economic Programme Oversight Committee (EPOC), Richard Byles of Sagicor, is quoted as saying that the "outlook of the EPOC is that of continued cautious optimism that we will meet all of the IMF targets."
He is assured to the point of certainty that Jamaica will meet the third-quarter targets given the NIR figure of US$1.05 billion and a primary surplus number which was three per cent above the target at December 2013.
The NIR target was US$836.5 million and while the December out-turn was US$211 million higher than the target, the NIR level was only about a half of what the current administration inherited when it came to office in December 2011.
If the EPOC co-chairman's expectations hold for the third-quarter IMF test, Jamaica will still face the formidable challenge of having to meet another 12 quarterly tests under the EFF.
It would appear that Mr Byles is the co-chairman who has either been designated or has made the personal choice to don the mantle of 'Optimist in Chief' to highlight good or changing-to-good economic news. Byles is earning the perception as the cheerleader for the Government's good economic changes - driven almost exclusively by the IMF - and clearly first among equals as encourager for an apparently reluctant lot of investors in the private sector.
To be fair, Richard Byles has a tough task. He is of the private sector but his declarations as head of EPOC will reflect GOJ performance - good or bad. As a major investor in the Jamaican economy as the CEO of Sagicor, it is in his interest for the Government to be seen to be doing well - parts of his financial empire are regulated by the same Government - and when one hears him speak it is clear that he believes what he says.
His co-chairman, the governor of the central bank, Brian Wynter, cannot play the spokesman role Byles has adopted since the governor is much more restricted and must be very circumspect, given his official position.
His experiences must also tell him that after 40 years of really bad government by many bad politicians of all stripes, and by many in this current administration, investors will want to see a lot more positive performance over a longer period of time from the Government, and more than two quarters of passing IMF targets, in order to put down serious new money in the Jamaican economy.
The balancing of roles between cheerleader and an oversight inspector at EPOC, the need to encourage investors to invest so early in the game - after JDX and NDX one and two - and the debilitating depreciation of the Jamaican dollar over the last year all form the horns of the dilemma faced by Richard Byles.
DON'T LET GOJ OFF THE HOOK
When the tax package and a raft of other IMF-deadline-meeting legislation were swept, almost literally, through Parliament late last year, there were piles of congratulations heaped on the Government for its 'historic' legislative achievements.
Never mind that many pieces of legislation were late, some avoided due parliamentary debate and, in any event, that is what our legislators are supposed to do.
Kudos must go to ministers Peter Phillips and Mark Golding and their teams of technicians, as well as the experts at the offices of the chief parliamentary counsel and attorney general. It is no doubt a sign of how low our standards have fallen that normal work is seen greeted as exceptional.
Much worse, I believe, is the erroneous view expressed by many that the Government has 'done its part', or 'done enough', and it is the private sector which must step up - immediately, if not before - to plunk down its money in yet unstudied projects, in an uncertain economic climate and without any evidence of how the new legislation will be implemented.
How many laws investors know are on our books that are not implemented or are capriciously or subjectively enforced? How many statutory regulations are enforced with similar patchiness, nepotism or with bias towards friends?
The optimists and political supporters must remember that money is very timid and seeks evidence of welcome and security. After decades of difficulty to do business in Jamaica and the lack of security with NDX and sliding-dollar clarity, investors will take time to tiptoe back into this economy.
The encouragers need to factor time into their encouragement equation.
Having said that, those investors who go into the market early get a chance at the big rewards which, along with possible big losses, accompany the big risks which will be taken by intrepid first-movers.
I certainly have been plugging for the economy to grow and private investment money is needed for that to happen. But it is the Government that must continue to foster and nurture an enabling environment.
The Government is still too big, too costly and far too difficult to deal with. In too many instances, it is unfriendly and unserving in the extreme. Ease of doing business? We have a far way to go.
While the private sector is to be encouraged to invest, let us not get too euphoric about some worthwhile legislation being passed. We must not let the Government off the hook to get its house in order and, thereby, encourage investment and economic growth.
Dr Peter Phillips is optimistic, too, but he keeps repeating that the job to recovery is just started -- and he is right.
Those with a ruthless objectivity know that the Government is the single largest impediment to private investment and growth, and therefore potentially largest enabler of economic growth in the short and medium term.
Aubyn Hill is the CEO of Corporate Strategies Limited and was an international banker for more than 25 years.Email: writerhill@gmail.comTwitter: @HillAubynFacebook: facebook.com/Corporate.Strategies
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