By Priesnell Warren
He is described as a ‘Financial Analyst with an Economic View’.
Warren began his banking career at Capital and Credit Merchant Bank now JMMB.

(The following is part two in 3 part series from Financial Analyst Priesnell Warren regarding a potential road map for the new government administration that was elected on February 25, 2016).

Jamaica concluded her 17th general elections on Thursday February 25, 2016. It saw the Jamaica Labour Party (conservative leaning) over turn the previous majority of 42-21 seats in the House of Representatives previously held by the People’s National Party (socialist leaning). In that context, it was a large reduction in gap, which lead to a very close victory margin of 32-31 seats.

Whatever the Government does, it must maintain the plan of action left in place by the previous administration.

Within their first 90 days in government, the current administration must set out to perform or implement the following Key Performance Indicators.

6 Reform the education system, the Education Ministry’s mantra “Every Child Can Learn, Every Child Must Learn” is making progress with figures of approximately 88%. While Barbados and Cuba are almost 100% placing them in the top 5 world literacy rates. The impetus has been placed at the early childhood level, although improvements are needed at all stages especially among the unattached that have fallen by the way side. Programmes such as GFLT for primary students and A-STEP for adults have served to reduce these gaps, seeking to develop a reading culture. Although literacy and rates of matriculation has vastly improved, a lot more is necessary to get students job ready when they graduate. Education by its self does not lead to development, one need to earn and become a functioning member of the society. Youth unemployment stands at an alarming 38% according to Statin; please note this does not capture the discouraged worker (persons not actively searching for jobs, usually within the last 4 weeks). Proper career guidance is necessary at the secondary level and right through to the completion of university, in order to steer persons towards industries that currently have labour shortages.
Literacy rate – adult total (% of people ages 15 and above) in Jamaica

Courtesy of www.tradingeconomics.com

6.1 On the matter of financing, free secondary education has developed its fair share of concerns. This is so because many schools around the island have increased their auxiliary fees, sometimes as much as the previous amounts for school fees. Done in order to remain operational, since the subvention they receive is simply not enough.

6.2 In contrast, tertiary education for the most part is self-financed. Many Jamaican’s simply cannot afford it, considering a population that is either unemployed or underemployed. In addition, scholarships for varied reasons are at times provided to those who can afford it. This leaves poor Jamaica’s to seek a job-which is hard to find with little to no experience and hard skills or at the mercy of the Student’s Loan Bureau. It is a dreaded institution of tertiary financing mainly because of the nature of its repayment system. The current format sees the use of an add-on method of payment, versus the reducing balance method widely used by banks and near banks to calculate loan payments. Simply put the add-on method interest charges are calculated at the start of the loan against the principal amount that was taken. However, while the principal will reduce over the repayment of the loan, the client is still charged interest on the original principal amount.

The SLB’s Executive Director announced plans in March 2014 to restructure the payment mechanism in short order. This would mean a change from the above mentioned destructive add-on method and to replace it with one of reducing balance. To date that has not been done; after almost year later the former Minister of Education only recently provided April 1, 2016 as the start date for the new method. The current government must follow through with the implementation of the directive. This was long overdue; Jamaica has furnished 2 segments of poor people. Those that are uneducated and mostly unemployed, and those whom are educated and underemployed (the poor, and the working poor) with costly student loans, paired with the high cost of living especially in urban centres.

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