Businessuite News24
Global Expectations: Predicting Economic Trends in an uncertain Global Environment – implications for Jamaican Companies.
Integration and globalization have made it impossible for countries to avoid the effects of changes in the international environment. An example of this is the recent and commonly referred to 2007-2008 financial crisis which affected majority and possibly all the world. The breakdown within the global environment within the two years has encouraged countries and particularly businesses to take key note of the economic trend within the uncertain global environment.
International markets fluctuate frequently and Jamaica, being a developing economy, is at risk of being greatly affected by any severe negative shock in the global environment. Careful monitoring of global activities can help the country alleviate the impact of negative externalities and reap the benefits from positive externalities.
There are a few concerns that is taking place on the international scene which has been of concern to developing nations such as ours. Over the past two years events such as Brexit, decisions made by the Trump Administration on international relations, Venezuela’s crisis and the never-ending conflicts in the middle east have increased concerns globally.
On 23 June 2016, The British government held a referendum on the issue of Brexit of which the majority voted to leave the European Union.
The UK’s sudden decision to leave the EU came as a shock to many. The United States as well as other countries were concerned about the possible shock waves that may stem from the exit. Due to the linkages of banks across the world, there were concerns about the expected instability it may have caused in the market. Some critics said that this loss could push Britain into a recession. The initial effect was a loss of about 9 percent in the value of the British pound one week following the vote. It is expected that Britain could experience more fallout as time progresses. The area of most concern is in trade and trade policies. The EU is UK’s biggest trade partner, however, with their decision to leave, it is expected that new policies will be drafted. Caribbean nations, such as Jamaica, are eagerly watching the international scene to see any further impact that Brexit will have as a nation and on us as a region.
When the United States elected the Donald Trump administration it initially resulted in uncertainty, which caused leaders worldwide to think about the possible global consequences of his policies based on his views expressed during his election campaign.
In the Caribbean, many have wondered how his decision on immigration and globalization would impact the countries. The US is the largest trading partner in the Caribbean and remittance contributes significantly to the foreign currencies in the region, hence any decision relating to trade policies and migration will have some amount of impact regionally. On January 25, Donald Trump signed an executive order that reinstates the Secure Communities Programme to target undocumented immigrants. The order also directs the State Department to withhold visas or take other measures to ensure that countries take back their undocumented immigrants. What this means is that illegal Caribbean migrants will be sent back to their homeland, which could possibly lead to a large amount of deportees, which many countries cannot at this time facilitate. The Trump administration has also proposed a repatriation plan that is expected to bring in approximately US$2.6 trillion. US corporation taxes are expected to be lowered, which may have a significant impact on US investments in other countries.
It goes without saying that oil is an essential element in an economy. Hence the price of oil will affect significantly utility, services and commodity prices. The recent Venezuelan crisis and the continuing war in the Middle East has raised concern about their impact on exports. Of the top ten world oil exporters two are middle eastern countries which are, Saudi Arabia at number one and Iraq at number three while Venezuela is at number nine.
Above is graph reflecting the movements of the US$ per barrel prices of Dated Brent and the West Texas Intermediate over the period January 2016 to June 2017. There was a noticeable increase moving from November 2016 to December 2016 and prices have generally have been relatively higher that the prices in the early months of 2016. An upward movement like this could cause oil prices to surge resulting. One recommendation is to continue with the oil hedge as oil prices can increase at any time. BM
Businessuite News24
Powering the Future: CARILEC and Green Solutions International SKN Launch Electric Vehicle Training in St. Kitts
Photo: Prime Minister, Dr. the Most Hon. Andrew Holness right) speaks with designer, Vintage Chic, Shanna Campbell about her handmade pieces, during the opening ceremony for Expo Jamaica 2025 at the National Indoor Sports Centre in St. Andrew on April 3.
Photo: Prime Minister, Dr. the Most Hon. Andrew Holness left), samples a coffee carrot ginger brew from Beyond 5 Beverages given to him Managing Director of the company, Damain Drummond right) during the opening ceremony for Expo Jamaica 2025, at the National Indoor Sports Centre in St. Andrew on April 3.
Prime Minister, Dr. the Most Hon. Andrew Holness has committed to ensuring that the policies and initiatives of the Government remain aligned with entrepreneurs, thereby creating an enabling environment that fosters investment. “To our manufacturers and exporters… your effort represents the heart of our economic progress, your resilience, innovation, and entrepreneurial courage has carried Brand Jamaica to every corner of the globe.
“As Prime Minister, I commit to ensuring our policies and initiatives remain aligned with your ambitions, creating an enabling environment that fosters investment, innovation and global competitiveness. Together we will strengthen our local economy and solidify Jamaica’s position on the international stage,” Dr. Holness said.
The Prime Minister was speaking during the opening ceremony for Expo Jamaica 2025 at the National Indoor Sports Centre in St. Andrew on April 3.
Dr. Holness said Expo Jamaica is a vivid showcase of Jamaica’s boundless potential, “so as we advance global partnerships and create impactful local results, let us reaffirm our collective determination to build a prosperous, productive Jamaica that leaves no one behind”.
“Expo Jamaica exemplifies how far Jamaica has come. Over 250 exhibitors showcasing more than 5000 products and services alongside 884 registered local and international buyers from 25 countries. This clearly reflects Jamaica’s growing global influence and appeal,” he said.
He added that the event has grown tremendously, now standing as the largest trade exhibition in the English-speaking Caribbean.
Meanwhile, Dr. Holness said Jamaica today boasts its strongest economy since independence.
“Whether you measure Jamaica’s economic performance and stability by the unemployment rate, the inflation rate, the debt-to-GDP (gross domestic product) ratio or Net International Reserves (NIR), by every critical metric, our economy undeniable demonstrates economic stability and resilience,” he said.
He added that growth is another central pillar to economic stability and resilience.
“For Jamaica to realise its fullest potential, our growth rate must accelerate from one to two percent towards a more ambitious target of four to five per cent. Central to achieving this are initiatives which this Government has launched, and we call them ASPIRE, that is our comprehensive growth strategy,” he said.
ASPIRE stands for: Access to Economic Opportunity for All (Inclusive Growth); Safety and Security; People (Human Capital Development); Infrastructure Development; Reform of the Bureaucracy (Ease, Speed, and Cost of Doing Business); Economic Diversification/New Industries.
He further added that inclusivity and equity are paramount to the Government’s growth agenda.
Meanwhile, Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill said the administration continues to position Jamaica as an investment destination for financial services, logistics, skilled labour, high value services and premium products.
“This expo is Jamaica’s open invitation to the world… The Andrew Holness administration has made it our mission to make Jamaica a very attractive place in this region in which to do business. Our macroeconomic numbers tell a clear story,” he said
Other speakers at the function included President, Jamaica Promotions Corporation (JAMPRO), Shullette Cox, and Chairman, Expo Jamaica, Aswad Morgan.
This year’s event is being held from Thursday (April 3) to Sunday (April 6) at the National Arena and the National Indoor Sports Centre in Kingston.
The four-day tradeshow, under the theme ‘Global Partnership, Local Impact: Advancing Jamaica’s Reach’, is organised by the Jamaica Manufacturers and Exporters Association Limited (JMEA) and JAMPRO.
By: CHRIS PATTERSON, JIS
Businessuite News24
Government Engages with US Trade Representative on New Tariff Regime
“There are opportunities that must be had. There are prospects to be uncovered, and so I urge my manufacturers, my businesspeople, before you start to look at the negative, also look for the opportunities. Don’t just sit down and complain about all the things that’s going on and all the things that’s going bad, expecting that Government is going to solve all the problems for you. Be the entrepreneur; be the one who is the risk-taker, and be the one who is looking for the opportunity,” Dr. Holness said.
Prime Minister, Dr. the Most Hon. Andrew Holness, says the Government is actively engaging with the United States (US) Trade Representative and other relevant authorities “to seek urgent clarification” on the new US tariff regime.
Speaking at the opening of EXPO Jamaica 2025 at the National Indoor Sports Centre in Kingston, on April 3, he said the United States Government recently announced a 10 per cent baseline tariff on imports from all countries, set to take effect on April 5, 2025, which introduces a significant shift in global trade policy, “one that could impact Jamaica’s market access to our largest trading partner”.
Dr. Holness informed that Jamaica, like other CARICOM nations, has traded with the US under the Caribbean Basin Initiative (CBI), which provides non-reciprocal duty-free access for a wide range of products to the US market.
“Today, nearly 90 per cent of Jamaican exports to the United States enter under these preferential terms; however, the new US tariff regime, rooted in a broader policy of reciprocal trade balancing, has raised serious concerns about the future of these preferential arrangements,” he said.
The Prime Minister noted that the Government has not yet received formal notification on the precise implementation procedures, including whether these new tariffs will override existing CBI provisions.
“We are also conducting a detailed technical assessment, in collaboration with relevant ministries and agencies, to fully understand the scope of these tariffs and their implications for Jamaica’s trade and industrial policy,” he said.
He pointed out that the developments do not reflect any erosion in the long-standing and strong bilateral relationship between Jamaica and the United States; rather, it reflects a broader recalibration of US trade policy that is global in scope.
“Still, we will use every available diplomatic channel, including working with our CARICOM brothers and sisters and utilising the Office of Trade Negotiations, to seek to preserve the position our exporters have secured over decades of deepening trade ties with the United States,” Dr. Holness said.
He noted that preliminary analysis indicates that some of the country’s top exports may fall under exempted product categories “and we are working to confirm and where possible, to expand these exemptions”.
“Again, I must emphasise that clarity is still needed on several matters. Furthermore, there may also be opportunities to be found and we must, therefore, be proactive and prospective,” the Prime Minister said.
He added that the Government will continue to advocate for manufacturers and exporters to ensure their interests are protected in any new global trade architecture.
“So, to our manufacturers and exporters, we understand the uncertainty this announcement has created and we are with you every step of the way. You are not only integral to our economic strategy, you are national champions of our resilience and ingenuity,” Dr. Holness said.
Meanwhile, he said the Administration will continue working to ensure the country secures its economic independence, even as it remains alert and responsive to evolving global trade dynamics that affect manufacturers and exporters.
“Yes, it is uncertain times, but we have done the necessary work. We have built the relationships; we have placed ourselves in strategic positions to be heard and to be heard from and to be consulted. When these changes are going to happen, we know that they could have long-term impact; we started planning long ago,” the Prime Minister said.
“You have a Government that is thinking very carefully, very strategically. I play chess, not draughts… . Maybe a decade ago, the word disruptive would have been an inherently bad thing. In today’s world, you require disruption of systems for there to be innovation and new opportunities. So, whilst we see the downside of the disruptive global order that we have now, we are not going to sit by and wait,” he added.
The Prime Minister urged manufacturers and exporters to explore new opportunities, noting that the Government will work with them.
“There are opportunities that must be had. There are prospects to be uncovered, and so I urge my manufacturers, my businesspeople, before you start to look at the negative, also look for the opportunities. Don’t just sit down and complain about all the things that’s going on and all the things that’s going bad, expecting that Government is going to solve all the problems for you. Be the entrepreneur; be the one who is the risk-taker, and be the one who is looking for the opportunity,” Dr. Holness said.
By: Chris Patterson, JIS
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