Minister of Finance, Planning and the Public Service, Hon. Dr. Peter Phillips, has called on the private sector to be more pro-active in acquiring domestic assets, particularly public entities earmarked for divestment.
Addressing the Private Sector Organisation of Jamaica (PSOJ) Chairman’s Club Forum, at the Jamaica Pegasus Hotel, in Kingston, Tuesday Jan. 24, the Minister advised private sector leaders and captains of industry and commerce that radical change is required to solve the country’s difficulties.
“In this new approach, I hope to see a more pro-active private sector in the divestment of public entities and a deeper commitment to long-term investments,” he said.
“Nothing short of a new paradigm shift can take Jamaica out of its present difficulty and successfully negotiate a path in a global economic environment that is becoming increasingly unstable and with higher levels of risks,” the Minister added.
Dr. Phillips observed that any shift in attitude and in getting things done, should be characterised by a “greater degree of trust and confidence between (all of) us, which can only be built by the kind of collaboration which leads to a shared vision."
The Minister emphasised that for this collaboration to be meaningful, a more “structured approach and partnership” among stakeholders in the economy, must be developed.
The Minister reiterated that the Government’s objective is to “accelerate private sector led growth through increased investment and efficiency gains…so as to generate jobs, reduce unemployment and poverty.”
He argued that, as “we chart our course forward,” macro-economic stability must be maintained and must include low inflation and low interest rates.
“There is no policy of high interest rates and there will be no policy of high interest rates,” he declared.
Re-stating the Government’s commitment to provide the macro-economic framework that supports low and competitive interest rates, Dr. Phillips said the objective “is to get these rates even lower if conditions allow."
With respect to the preliminary talks with the International Monetary Fund (IMF), which the Minister described as “a prelude to a fuller negotiation,” the Minister expressed urgency in entering into a new Agreement.
“These negotiations are going to be tough. But based on the discussions today (January 24), I can say that there is a spirit of goodwill and the atmosphere is good. This agreement will be based on the establishment of credible, predictable and achievable macro-economic targets that will inspire confidence among local and international investors, as well as other stakeholders,” Dr. Phillips said.
He emphasised that in the medium term, any programme going forward must involve “comprehensive tax reforms, the reform of the public sector pension system, public sector transformation and a moderation of the growth in public sector costs, which is allied to economic growth."
The Minister explained that the reforms are vital to improving public finances over the medium term and are critical if the economy is to have a chance for faster growth. He also re-affirmed his commitment to fiscal responsibility which “will be reflected in sustained efforts to reduce both the fiscal deficit and the debt, as a priority."
With respect to tax reform, the Minister said that, “all of us have a stake in achieving the stability that will come with a more equitable tax system, one which expands the base, more so than increasing the tax burden on any one group.”
While acknowledging “a certain urgency” in addressing the issue, Dr. Phillips argued that, “we must proceed with the confidence that with crisis comes opportunity, and that if we can build a working partnership, we can make the difference to Jamaica’s future."
By Allan Brooks, JIS Senior Reporter