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Jamaica is being hailed as “exceptional” for achieving sustained reduction in the public-debt-to-gross-domestic-product ratio (GDP) despite global financial crises, pandemics, and other emergencies.
In a paper titled ‘Sustained Debt Reduction: The Jamaica Exception’, authors Serkan Arslanalp, Barry Eichengreen and Professor Peter Blair Henry, noted that the sharp, sustained reductions in public debt are outstanding “because public-debt-to-GDP ratios have been trending up in advanced countries, emerging markets, and developing countries alike”.
The paper was presented at the Brookings Institute in Washington on Thursday (March 28).
“Governments have borrowed in response to financial crises, pandemics, wars and other emergencies, resulting in higher debt ratios. But only in rare instances have they succeeded in bringing those higher debt ratios back down once the emergency passed,” the paper pointed out.
In the case of Jamaica, the Government was able to cut its debt ratio in half from 144 per cent of GDP at the end of 2012 to 72 per cent in 2023.
The economists said the achievement was despite vulnerability to hurricanes, floods, droughts, earthquakes, storm surges and landslides, noting that Jamaica is ranked as the third most disaster-prone country in the world according to the Global Facility for Disaster Reduction and Recovery.
“It did so despite a COVID-19 pandemic that disrupted tourism and mandated exceptional increases in public spending. Yet, despite this exogenously prompted deviation from plan, the IMF’s baseline projection, in its 2023 Article IV report, forecasts a further fall in debt-GDP to less than 60 per cent over the next four years,” the paper said further.
The paper highlighted the fact that the Fiscal Responsibility Framework, introduced in 2010, required the Minister of Finance to take measures to reduce, by the end of fiscal year 2016, the fiscal balance to nil, the debt-GDP ratio to 100 per cent, and public-sector wages as a share of GDP to nine per cent.
“The framework was augmented in 2014 to require the Minister, by the end of fiscal year 2018, to specify a multi-year fiscal trajectory to bring the debt-GDP ratio down to 60 per cent by 2026. The framework included an escape clause to be invoked in the event of large shocks.
“This prevented the rule from being so rigid, in a volatile macroeconomic environment, as to lack credibility. At the same time, it included clear criteria and independent oversight to prevent opportunistic use,” the paper said.
The paper further pointed to the consensus building exercise entered into by the Government, which was key to the achievement.
“In 2013, a series of ongoing discussions in the National Partnership Council, a social dialogue collaboration involving the Government, parliamentary Opposition, and social partners, culminated in the Partnership for Jamaica Agreement on consensus policies in four areas, first of which was fiscal reform and consolidation,” the paper noted.
“The Partnership for Jamaica Agreement fostered a common belief that the burden of fiscal adjustment would be widely and fairly shared. It supported the creation and ensured broad national acceptance of the Economic Programme Oversight Committee (EPOC) to monitor and publicly report on fiscal policies and outcomes, and to provide independent verification that all parties kept to the terms of their agreement,” the research said.
“By creating a sense of fair burden sharing, Jamaica’s organised process of consultation thus sustained public support for the operation of the country’s fiscal rules, culminating in March 2023 with the establishment of a permanent, independent Fiscal Commission,” the economists declared.
“Jamaica managed its financial system well in this period. It adeptly managed the term structure of the debt, by way of a well-designed fiscal rule, and a partnership agreement creating confidence that the burden of adjustment would be widely and fairly shared.
The fiscal responsibility and the partnership agreement were key, as neither element would have worked to achieve sustained debt reduction in the absence of the other.
Both were needed the authors declared.
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The Construction Industry Is One Of The Key Growth Pillars Of The Jamaican Economy – Dr. Henry
Chairman of the Jamaica Social Investment Fund (JSIF), Dr. Wayne Henry, says the construction industry is one of the key growth pillars of the economy.
“This is evident in the Sector Plan for Construction, one of the 31 sector plans that form the foundation for the Vision 2030 Jamaica – National Development Plan,” he noted.
Dr. Henry, who was addressing a recent JSIF contractors’ seminar at the Courtyard by Marriott in New Kingston, noted that at the time of drafting Vision 2030, it was envisioned that the country would develop a dynamic and internationally competitive construction sector, with the flexibility and creativity to adopt new construction technologies that may emerge over the long-term.
As such, he said, it is imperative that contractors remain on the cutting edge of construction innovation through important knowledge exchanges.
The seminar on project planning and execution was targeted at contractors who wish to bid for JSIF’s proposals on national infrastructure projects.
It provided an avenue for participants to learn more about the requisite construction practices and procurement guidelines.
Managing Director of the JSIF, Omar Sweeney, in his remarks, said that the construction industry is a major economic driver.
Managing Director of the JSIF, Omar Sweeney
He said that the sector is a vital component of the country’s development and infrastructure growth and has a high demand in the areas of residential and commercial spaces.
Noting the critical link with other sectors, Mr. Sweeney said that the success of any building project relies on collaboration among key stakeholders such as engineers, architects and quantity surveyors.
“Hence, it is imperative to foster open communication and continuous dialogue through effective fora such as this seminar,” he noted.
Mr. Sweeney said that for over 27 years, JSIF has maintained its position as a leading project management agency and has consistently implemented hundreds of solid infrastructure development projects.
He noted that the entity executed projects amounting to more than three billion dollars during a one-year period.
These are largely funded by the Government of Jamaica, World Bank, The European Union and the Caribbean Development Bank, Mr. Sweeney noted.
JSIF is an agency of the Government of Jamaica with portfolio responsibility for the implementation of several major infrastructure projects across Jamaica, predominantly in vulnerable communities.
By: BRITNEY STEVENS, JIS March 18, 2024
Photo JIS File
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Corporate Feature: BlackSlate Holdings Group: Pioneering Investment Excellence and Global Impact
In the dynamic landscape of private investments, BlackSlate Holdings Group Limited stands out as a beacon of innovation and strategic foresight. As a privately owned Jamaican registered holding company, BlackSlate orchestrates a diverse array of companies and investments that span the United States and the Caribbean. This article delves into the essence of BlackSlate, examining its commitment to delivering secure returns, strategic investment focus, corporate support structure, and the profound impact of The Walkbout Foundation.
Securing Returns in a Diverse Portfolio:
BlackSlate’s primary objective is to provide its select group of shareholders with safe and consistent returns through a meticulously curated portfolio of regional and international investments. The company’s adept management oversees investments in wholly owned subsidiaries, real estate, patents, trademarks, stocks, and other tradable assets. This approach not only ensures stability but also positions BlackSlate as a pioneer in navigating the complexities of the modern investment landscape.
Strategic Investment Focus:
BlackSlate’s strategic focus centers around identifying and securing private equity positions in small and medium-sized companies with robust business models and growth potential. This distinctive approach has allowed BlackSlate to carve a niche in the market, creating a well-diversified investment profile that seamlessly integrates technology, real estate, and enriching travel experiences.
Unifying Corporate Support:
Beyond financial growth, BlackSlate recognizes the importance of unifying its investments and businesses under a centralized corporate structure. This commitment to cohesive management ensures optimal efficiency in policy direction and management services, setting the stage for sustained success.
The Walkbout Foundation: Fostering Global Experiences:
At the core of BlackSlate’s mission is The Walkbout Foundation, a testament to the company’s commitment to making a positive impact. This foundation, in addition to supporting environmental activities, champions travel as a transformative force for developing human capacity and experiences. Annually, BlackSlate sponsors individuals under the age of 25, enabling them to explore diverse cultures, cuisines, and beverages on the global stage. This initiative is funded through a percentage of the company’s net revenues, exemplifying BlackSlate’s dedication to creating lasting value beyond financial metrics.
Conclusion:
BlackSlate Holdings Group Limited emerges as a trailblazer in the world of private investments, combining strategic acumen with a commitment to global impact. As the company continues to navigate the complexities of the investment landscape, its focus on securing returns, strategic investment approach, unified corporate support, and philanthropic initiatives through The Walkbout Foundation solidify BlackSlate’s position as a leader in investment excellence.
www.blackslateholdings.com
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