Shaw to address $15b deficit in Parliament tomorrow

[Lazie]

FINANCE Minister Audley Shaw is to address Parliament tomorrow on the $15-billion deficit inherited by the new administration, according to Jamaica Labour Party (JLP) general secretary, Karl Samuda.

Addressing a press conference yesterday at Sandals Grande Ocho Rios after a JLP central executive meeting at that venue, Samuda said the finance minister would also speak on other issues critical to the nation's economy, but declined to provide details.

Samuda said the new administration received a shock immediately after the general elections when it was advised of the deficit, which he said was not previously discussed nor brought to public attention.

That issue, Samuda said, was one of three that Prime Minister Bruce Golding identified at yesterday's meeting as main challenges to the government, the others being the damage caused by Hurricane Dean and the continuing crime wave.

Regarding crime, Samuda said Golding has been working with the Ministry of National Security and would be taking extraordinary steps to deal with the situation. He said further statements on the issue would be made "as soon as possible".
The JLP has also signalled its readiness for local government elections, saying its full slate of 227 candidates would be in place by October 31 for elections that are expected by yearend.

"All the necessary arrangements and councillors are in place with very few exceptions," Samuda told journalists.
Samuda expressed confidence in the JLP repeating its 2003 local government election victory, adding that he believes the party deserves to win based on the work done at the community level.

Samuda also reiterated Golding's recent announcement that he would not be seeking to extend the date for Local Government elections beyond the December 31 deadline.
At the meeting, the first for the party's central executive since winning the September 3 general elections, new arrangements pertaining to local government was also discussed.

Meanwhile, Labour and Security minister, Pearnel Charles, will leave Jamaica on Wednesday for Canada to seek more employment for Jamaicans in the Canadian farm work programme and to look at accommodation for workers in the programme.

Charles said the government, through the HEART Trust and the Incorporated Master Builders Association of Jamaica, will be seeking to certify at least 500 construction workers in an effort to fill a quota of 450 construction workers that are needed for contract work in British Columbia, Canada. These workers, Charles said, would be on two-year contracts. Contractors from Canada are expected in Jamaica to host a job fair on October 18 to start recruiting persons.

[Lazie]

It should be an interesting day in Parliament tomorrow. Dr. Davis was on the Breakfast Club this morning in a mode of, "Ready fi di Waaarr!! (Know what? Substitute Debate fi war!).

I will admit that I didn't fully well understand what he was saying and its not only me because Peter Espuet had the same problem. Obviously a Karl, Jawge and Sickko would fully comprehend what he is saying.

His position was to try and attack the gov't instead of answering the question about the 15 billion deficit. He is hyping, asking who was incharge of the Ministry of Finance? Shaw, Nelson or Webhy.

He did ask a valid question, "Can Minister Nelson signoff on an MOU agreement or is everything on hold until Shaw signs it?" Again, thats something to clarify, but he appears to have answered in his question there.

He is blaming the gov't for there proposal of distributing 2.5% of the budget to each MP. Is it for each MP or is it for each constituency?

Anyway, there should be "fireworks" ..

[myYout]

Dere should be fireworks yes, him ready fi di war. Nuhbady nah war wid him, him fi jus answa di question dem. Kah a nuff dem haffi account fah.

[Gamma]

should be interesting....bet yuh omar will blame the MOF for the deficit!!!

[Karl]

Government finally goes to international capital market

The Government of Jamaica (GoJ) finally went to the international capital markets last week, two weeks after the Federal Reserve Board slashed its benchmark overnight rate to 4.75 per cent per annum. The administration re-opened the 2039 bond which was initially floated by former finance and planning minister, Dr. Omar Davies, and raked in US$150 million at 8 per cent per annum, 25 basis points less than the 8.25 per cent per annum at which the original offer which gobbled up US$350 million was floated. The issue which was floated by the Bonn, Germany-based Deutsche Bank, was oversubscribed by US$350 million.

Analysts, however, argue that the governnment should have taken $500 million from the market rather than $150 million.

The long-overdue offer comes against the background of calls for the government to go to the market for the remaining US$150 million needed to fund this year’s budget, in order to stem the slide in the value of the Jamaican dollar in relation to its international counterparts.

The dollar has been slipping since the March quarter, forcing the Derick Latibeaudiere-led central bank to hike interest rates in order to stem the slide, as speculators gobbled up its intervention funds for the purpose of hoarding. This has been because they feel that the government is not serious about meeting the fiscal deficit target of $37 billion or 5 per cent of Gross Domestic Product (GDP) this fiscal year, as Finance and the Public Service Minister, Audley Shaw, continues to speak about additional expenditure or about giving up revenue without saying how the gap will be closed.

A larger fiscal deficit than programmed for means higher interest rates, therefore these utterances set in motion a self-fulfilling prophecy which leads to hoarding of the dollar, further shortages and higher interest rates to stabilise the currency. The flotation of a one-year fixed rate debenture at 14 per cent per annum by the Government of Jamaica two weeks ago could lead to an increase in the amount of money needed to service the country’s almost trillion dollar debt this year. The cost of servicing the debt climbs by $3 billion every time benchmark interest rates climb by a percentage point.

A total of $210 billion or 54 per cent of the $383 billion was programmed by the former finance and planning minister, to service the country’s debt this year.

This figure is, however, likely to change significantly, as the central bank and the Ministry of Finance jack up interest rates in order to stabilise the dollar and obtain budgetary financing. The government projected to borrow some $136 billion or 17 per cent of GDP to fund this year’s budget, down from the $172 billion gobbled up last year.

The floatation of this instrument by the Finance Ministry follows that of a one-year note at a the same interest rate by the central bank in order to shore up the value of the sliding dollar.

However, despite the flotation of these instruments and augmentation of supplies from the net international reserves (NIR), the local currency continues to fall against the US dollar, which has been tumbling against all of the world’s 16 most actively traded currencies since the Federal Reserve Board slashed the benchmark overnight rate from 5.5 per cent per annum to 4.75 per cent per annum. These include the euro, the pound, the Brazilian real, the Canadian dollar and the Australian dollar, to name a few.

The flotation of the current instruments follows that of many others since the March quarter when the local currency first started to buckle under portfolio shifts. The slide continued during the June quarter despite heavy intervention through use of monetary and exchange rate policies by the central bank, due to the uncertainty surrounding the General Elections and the government’s macro economic policies, particularly in relation to the meeting of the fiscal deficit target this year.

[Mosiah]

Not changing no course!

[Lazie]

Not changing no course!

Are you actually serious? Karl and JAwge mi expect that from, then again ....

[Mosiah]

What? Is your minister changing course? You tell me!

[Lazie]

Do you people think any at all? The man dem just come in, how else would you expect them to finance the budget?

I guess after 18 years of abuse, unuh nuh know nuh better.

[Assasin]

you seem like you want everything done inna one day.

What was the JLP to do, Just have the "three wisemen" or "blind mouse" just go in and within 2 weeks change everything?

Give the man them sometime to brainstorm and put their package togather.

[Lazie]

you seem like you want everything done inna one day.

What was the JLP to do, Just have the "three wisemen" or "blind mouse" just go in and within 2 weeks change everything?

Give the man them sometime to brainstorm and put their package togather.

Its the JLP, all of a sudden people ready fi hold gov't accountable.

[Mosiah]

Are you responding in a wrong thread? What are you talking about?

[Assasin]

you asking if the finance minstry changing course?

give them a little time and then we will know.

[Willi]

Blame 'run wid it' Omar...him nyam out the money....and didnt even tell anyone in his own party, much less parliament.

[Muadib]

"The heart of man is deceitful above all things.. who can know it."

Check out Syrianna and Lord of War....

Poor wi nuh even qualify to join the illusion.. wi a chat bout who promise nurse what..

Wi nuh ready... bout independence.. what a joke.