NATIONAL BROADCAST BY PRIME MINISTER MOST HON. P.J. PATTERSON JANUARY 11, 2004


We enter this New Year facing our fair share of challenges and opportunities. At times like these, it is the quality of our nation’s leadership at every level and the attitude of all our citizens that determine how well we do and the progress that we make.
Throughout our history we Jamaicans have displayed remarkable strength of character, determination, and an extraordinary ability to overcome obstacles. In every corner of the world, in every field of endeavour, we are known and respected for our intelligence, adaptability, and just plain common sense. It is these qualities that make me confident that 2004 can be a year when we make significant progress.
Yes, we do face major challenges. We have to find the way to overcome the difficulties caused by the admittedly heavy burden of existing debt and to quicken the pace of economic growth. It will take commitment and determination. But it can be done.
I am greatly encouraged by the many positive signs in various sectors of our society of a genuine willingness to seek innovative solutions and to make the necessary sacrifices in the short term in order to reap long term benefits. While I concede that we do have immediate difficulties I want to emphasise that there are a number of areas in which we are enjoying real growth. This growth will continue, signifying better days in the foreseeable future.
From the time we passed the Budget, we explicitly indicated that we faced a major hurdle in reducing and then eliminating the deficit. The fact is that in the first seven months of the Budget year, that is to say from April to October last year, we actually collected about 24% more in revenues than in the corresponding period in the previous year. However, two major factors have aggravated our situation – the increase in interest rates and the growth of the public sector wage bill which now accounts for about one-third of government spending.
Let’s talk first about interest rates. Interest rates went up early last year mainly because of uncertainty in the foreign exchange market. The market has since stabilized, allowing for significant reduction in rates, with the most recent cut being announced last Friday. Much more needs to be done to bring those rates down to friendly levels for business and to allow the government to reduce the Budget deficit. We are exploring a number of options and will keep the nation informed of our progress.
Even prior to our national debt reaching its current levels, we had begun a process of making government more efficient and cost effective by re-organising the way in which we provide services. This has resulted in improved customer service in many agencies.
It is clear that the rationalisation of public sector agencies must proceed at an even more rapid pace. Now more than ever, government agencies that provide services to facilitate investment must sharpen their skills and implement recommended improvements with a greater sense of urgency. Established timelines for these improvements must be met.
How we go about addressing the problem of the size of the public sector wage bill is a cause of great concern to many, and understandably so, as the government is the largest employer. Let me reassure everyone that we do not intend to arbitrarily reduce the size of the public sector overnight. We are working closely with the unions that represent public sector workers. Our aim is to come up with a solution that will allow us to cap wages, and to devise an acceptable formula which will ensure that there is no sudden large scale dislocation either in terms of jobs or in terms of providing core services to the people of Jamaica.
Everyone will understand that there is a delicate balance which must be maintained. Good faith on both sides has been evident and the consultations are going very well. As soon as an agreement has been reached the information will be made available to the public.
Let me add a little more about the provision of services to the public by government. We will protect our education and health services and the programmes for the poor, the elderly and the more vulnerable in our society.
Education and health services are clearly vital to economic development. Most parents willingly make the necessary sacrifice to ensure their children’s education. However, although we have lowered the amount that parents pay under the cost-sharing programme some parents are delinquent. I appeal to those parents to live up to their responsibility so that the entire system can work to the benefit of all our nation’s children.
Each Ministry and agency is well into the process of establishing priorities with regard to keeping their services going. There are a number of projects which we had planned to implement but, in the present circumstances, we are faced with some difficult choices.
I refer specifically to our capital budget, that is the amount we spend for roads, water supplies, construction projects and other things of that kind. What we have to do is to concentrate all our available resources on those projects that will accelerate growth and provide employment. We simply do not have the means to implement all the projects we know are important in one go. I think everyone will understand that at present we have no other option.
Now let us look at the other side of the coin – the very real and encouraging prospects for growth in our economy, – as we work to increase our earnings which will enable us to pay our way out of debt.
Right now, we are enjoying one of the best Tourism seasons ever. As a matter of fact, I got a report from someone in Ocho Rios that said there seem to be more foreigners than Jamaicans not only in the town but in outlying communities.
There are some 70,000 persons directly employed in Tourism and many more indirectly. Of this number, some 30,000 are employed directly in the hotel sector. The other 40,000 make their living from attractions, ground transportation, craft vending and the provision of other services to our visitors. These are the spin-offs that make our investment in Tourism so crucial.
You will understand therefore how great the prospects are for further benefit to our communities as the sector reaches its growth targets.
For instance, three Spanish hotel chains will begin construction of 3,500 hotel rooms in the third quarter of this year – representing an investment of US$320 million – with the first hotels scheduled for opening in 2005/2006. We are also finalizing arrangements for a number of other large-scale projects in resort development.
The potential for employment during and after the construction phase of these developments as well as for visitor arrivals and expenditure, is clear. The positive effects of linkages with other sectors of the economy will be felt in such areas as attractions, agriculture, manufacturing and transportation.
Major expansion and improvements are moving ahead at both our international airports. The construction of the Montego Bay to Ocho Rios segment of the North Coast Highway is near to completion.
To keep pace with the tremendous growth in our cruise shipping industry, the Port Authority of Jamaica will shortly begin begun major improvements in cruise ports in Montego Bay and Ocho Rios. In Port Antonio, the Authority will shortly begin construction of a boatyard to complement the marina. With Port Antonio back on the cruise ship map, more than thirty cruise ships are booked to visit the town during the next year. This opens up new opportunities for private entrepreneurs large and small who must now become more proactive in taking advantage of increased business.
Expansion of the Kingston Transhipment Port is moving according to plan.
Our Mining sector is also on an aggressive growth path with bauxite/alumina production and exports showing continued strong growth in alumina output, based on plant expansions now in progress and to come. Gross foreign earnings reflect this situation, as well as the effect of higher alumina prices anticipated for this year and for 2005. A major factor in boosting these investments has been the reform of tax arrangements undertaken by the government.
Construction of Highway 2000 continues apace.
Agriculture, is recovering from the natural disasters of previous years. In the third quarter of 2003, domestic crop production increased by just over 23% compared to the same period in 2002. The crop product development and marketing programme now being carried out by the JAS in conjunction with the Ministry of Agriculture is expected to continue to pay dividends both in terms of employment and foreign exchange earnings.
Work on Phase I of the Inner City Housing project for which contracts were signed late last year will begin in a few weeks. The special rural housing programme which was part of the same initiative, is now ready to go.
All these investments will open possibilities for employment. We have instructed HEART to provide whatever training is necessary so that our work force is equipped to provide a labour force which is competitive and can increase our productivity.
In the meantime, business confidence continues to grow. Several companies are doing well. This was reflected in their profit margins, expansion and the price of their shares. The stock market recorded one of its best years, with a 49% growth – the highest in the Caribbean and one of the highest in the world.
A number of major private sector investment projects are in place. These include a $1.2 billion expansion of beer production by Red Stripe; a $1 billion fishing operation at Port Royal Fisheries begins shortly; the Boss Furniture factory in downtown Kingston and Walkerswood Caribbean Foods in St. Ann are also expanding.
The resuscitation of the manufacturing sector is crucial because of its potential for providing employment and containing imports. A working group is reviewing proposals put forward by the JMA and the JAS for a restructuring programme designed to assist small and medium size firms. It will report to Development Council on Wednesday.
I am pleased that all the sectors of our society are coming together in a meaningful partnership – a partnership which I have so long advocated as the best model for sustainable development.
The Trade Unions have clearly indicated their intention to show responsible leadership as they carry out their duties for the workers they represent; the private sector has come forward in a new spirit of constructive cooperation. The consultations between all sectors are exceedingly encouraging.
What this means is that the confidence factor which plays such a crucial role in any economic environment is getting stronger an excellent precursor to strong and sustained growth.
At the time that this broadcast is being aired, I will be in Monterrey, Mexico, where I will participate in a Special Session of the Summit of the Americas. In addition to consultations in open forum with all the major leaders of the hemisphere, there will be bilateral discussions with several leaders and CARICOM will be pursuing with the United States our discussions on the Third Border Initiative. At the Summit, leaders will use the opportunity to address solutions to the challenge that our countries face as we seek the economic and social development of our nations. The summit will allow us to deepen political dialogue and co-operation.
CONCLUSION
Given the realities of today’s globalised world, such opportunities for collaboration with other nations take on greater importance than ever, as we strengthen our alliances and explore every avenue that will lead to the sustainable economic growth to which we aspire.
And so, my fellow Jamaicans I have every confidence that the year ahead will see us all united as never before to realize our vision of a quality society. With firm belief in ourselves and with the help of the Almighty our nation will emerge stronger than ever as we build the new Jamaica that will hold its rightful place in the world in this generation and in generations to come.

JIS Social