Some highlights from Jamaica’s 6th IMF Test Results

This information is an extract from the IMF publication of December 3, 2014.

Recent data show a gradual pick-up in economic activity in the aftermath of a recent drought, with growth projected to reach 0.9 percent in 2014/15. Inflation projections fluctuate around 8 percent, as food prices are pushed up temporarily by the drought while lower fuel prices are expected to persist.

The program is on track. All September 2014 quantitative performance criteria and structural benchmarks were met. Based on this strong performance and the authorities’ policy commitments, staff recommends completion of the sixth review.

Focus of the review. Discussions centered on the preparations for the 2015/16 budget, and reforms to strengthen the financial sector and boost growth. The authorities have deepened their efforts in supporting their ambitious fiscal goals by strengthening public financial management and revenue administration, and they reiterated their resolve to continue containing the wage bill. Steps have also been identified to advance the reform of the securities dealers and to increase the resilience of the financial system.

Risks to the program remain high. Without more tangible signs of improvements in growth, the social consensus for pushing ahead with reforms may prove difficult to sustain. Revenue shortfalls, disruptions in external financing (including from PetroCaribe), and inability to contain the government wage bill could undermine the fiscal position. Vulnerabilities in the financial system could become more prominent.

In a crucial statement the IMF Board opines, “Wide-ranging actions to boost the momentum for growth and employment creation are critical for the success of the program. While economic stabilization and debt reduction are on track and constitute an essential pillar of the growth strategy, reforms to enhance the business climate should be accelerated—including by cutting red tape, reforming the energy sector, and making the public sector more client-oriented”.

Read the full text at https://www.imf.org/external/pubs/ft/scr/2014/cr14359.pdf.

Water is Life...but costs too much

We in Jamaica constantly hear it being said “water is life”, however a feature of the “Land of Wood and Water” is water lock-offs perpetuated by occasions of drought. One complaint of the sole supplier of the precious commodity is the very high cost of electricity which is needed to produce and distribute potable water. But why is this the case? And is there no other way? Well, there is a place not too far afield that provides a guide – New York City.

It is said the New York City's water supply system is one of the most extensive municipal water systems in the world. This complex system relies on a combination of tunnels, aqueducts and reservoirs to meet the daily needs of the city's over 8 million residents and its many visitors. This is achieved thanks to well-protected wilderness watersheds, New York's water treatment process is simpler than in other American cities. One advantage of the system is that 95% of the total water supply is supplied by gravity. The other 5% needs to be pumped to maintain pressure, but this is sometimes increased in times of drought when the reservoirs are at lower than normal levels.

So, with this prime example, why is it Jamaica’s water supply system with about 1,000 facilities islandwide is so reliant on expensive electricity? There is actually no reason Jamaica to not have potable water produced and delivered more efficiently and cost-effectively. All it requires is a healthy dose of will and a bit real ingenuity.

Quality of Service - Jamaica Telecoms

Recently the Office of Utilities Regulations (OUR), in Jamaica, published a 104 page paper titled "Quality of Service Standards and Consumer Protection Guidelines for the Telecommunications Sector". It is constitutes a "Notice of Proposed Rulemaking".

The Abstract, dated November 10, 2014 states "In a perfectly competitive market in which consumers are fully informed about the characteristics and reliability of all products, no regulation of quality is required as each person is able to make an optimal choice given the range of services and relative prices. However, it is common knowledge that markets often fail to meet these perfectly competitive conditions. Consumers will therefore benefit when quality standards are regulated and Licensees’ performances on quality of service indicators are established and published." It goes further to state "The proposals in this Notice of Proposed Rulemaking (“NPRM”) cover quality standards for fixed telephony, mobile telephony and internet access as well as procedures for handling of consumer complaints. It also includes a General Consumer Code of Practice, which sets out consumer protection guidelines for the telecommunications sector".

The general public is now invited to review the document, posted on the OUR's website [link], and provide feedback on the specific proposals.

Jamaica: time to put up or shut up

First published in the Jamaica Gleaner Wednesday June 15, 2005

OVER THE past few weeks there have been a lot of talk about all that is wrong with our country. Much of this talk has been focused on the problem of crime and violence, extortion and the failures of Government. However, the talkers need to go much further than merely restating problems that exist with the country, problems that everyone already knows. They need now to take it to the next step, helping with some of the solutions; turning all the talk to tangible actions.

The most serious problem that Jamaica has is that everyone knows what the ills are and who is to be blamed, but does nothing. We as a people seem always to be looking for someone else to fix our problems -Government, the Church, foreigners. Since emancipation and our subsequent independence from our colonial masters, we seem to have allowed ourselves to be colonised and enslaved once again. This time around, the colonisers are corrupt public officials. This time around, we are enslaved by the fear of being a victim of the frequent acts of violence perpetrated by the criminals among us.

Those individuals who we remember and celebrate each mid-October must be turning in their resting places. The independence that they fought so long and hard for is being taken for granted. It is being surrendered, without a fight, to the corrupt and criminal-minded.

We need to come to the realisation that the price of freedom and independence is the responsibility to ensure that this freedom is not subverted.

We know the problems, we know the solutions, what we do not have is the will. It is time for us to put up or shut up. It is time for all of us to realise that things are never going to get better unless we start making them better.