JIS News

Finance and Planning Minister, Dr. Omar Davies, has said that the country’s “spectacular” performance over the last two months puts the government in a good position to approach the local and overseas markets for budgetary financing.
At the same time, he said that the government would not wait until an arrangement was in place with the International Monetary Fund (IMF) before approaching the market, pointing out that what was important to creditors was the country’s track record, rather than a relationship with the IMF.
“What is important to creditors both domestic and external is your track record. The truth is our performance in the last two months has been spectacular. Were I a creditor, that would be of far greater importance to me rather than whether or not there is an agreement with the IMF,” he stated.
Dr. Davies, who was being quizzed by journalists at his National Heroes Circle office last week, informed however, that the government would tie up arrangements with the IMF when he travels to Washington in May for the regular Article four consultations.
The Government has put forward a $328.2 billion expenditure budget for 2004/05, the bulk of which will be financed by borrowings of $153 billion with $155 billion to come from revenue earnings. In addition, $4.3 billion is expected from grants; $2.5 billion in capital revenue; $10.2 billion from non tax revenue and US$6 million from the sale of a cellular licence earlier this year to AT&T.
But, while no new taxes will be introduced, Dr. Davies indicated that there could be some adjustment in user fees to realistic levels, so that the government would be able to provide the high quality of service the public demanded.
He said that in many respects, Jamaica was a first world country in terms of demands and that the minimal fees for certain services provided in the public sector had to be adjusted. “The whole society has to accept that there is a cost for providing certain public services. There is a whole range of services being provided where the fees that are charged are less than the cost of the paper,” he lamented.
He indicated for example, that in the health sector, fees charged by government laboratories for medical analyses were so “ridiculously low” that private medical facilities preferred to send tests to state laboratories. He said therefore that every department of government would have to examine what they were providing, the quality of the provision and what the acceptable charges were.
Meanwhile, Dr. Davies expressed enthusiasm at the new loan facilities put in place for the information and communication technology (ICT) and export sectors, indicating that these initiatives represented the beginning of broader programmes being implemented to spur investment.
He informed that the loan facility for the ICT sector would provide a way out for young persons who had ideas but did not possess the personal resources, noting that $80 million has been made available to the sector for software development, receivable financing, working capital and the purchasing of capital equipment at a rate of 12 per cent per annum.
He also encouraged entrepreneurs to make use of the programme, being facilitated through EX-IM Bank and the Jamaica Exporters Association, which involved the on-lending of some US$8.4 million to exporters.
Turning to allocations to the fire service, Dr. Davies indicated that equipment had been identified, but a decision was to be reached on whether to go to tender, which would delay the arrival of the equipment, or select one of the three interested parties and negotiate.
He said that given the budgetary challenges this year, ministries would have to trim expenditure without breaching the arrangements reached in the memorandum of understanding with the trade unions. “There will be no cuts in terms of the staff complement. All Ministries will just have to manage much more carefully. the fundamental thing is that we intend to honour all aspects of the memorandum of understanding (MOU),” he stated.
Reflecting on the successes and challenges of the last fiscal year, Dr. Davies said the MOU signed between the Ministry and the Jamaica Confederation of Trade Unions (JCTU) representing public sector workers, was among the Ministry’s main successes.
Meeting the deficit target, bringing back stability to the foreign exchange market and building up the net reserves were some of the other significant positives, he noted. The greatest challenge Dr. Davies said, was “navigating our way through the period of instability in the foreign exchange market”.

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