MMinister of Finance and Planning, Dr. the Hon. Peter Phillips, says that Jamaica must make “the hard financial decisions now”, in order to protect the economic future of generations to come.
“We need to reform our economic life, we need to reduce the level of public debt and we need to do so urgently if Jamaica’s sovereignty is to have any meaning for future generations,” he stated.
“I don’t want future generations to say we failed them or worse, that we dropped the ball given to us by previous generations of Jamaicans,” Dr. Phillips added.
The Minister was speaking in London on Monday, June 24, at the first of two public meetings as part of the ‘Outlook to the Future Tour’ organised by Jamaica National Building Society (JNBS) under the theme: ‘Jamaica 50 years and beyond …Assessing our Economic Future’.
Dr. Phillips said that Jamaica has an unsustainable level of public debt, which stands in excess of 145 per cent of Gross Domestic Product (GDP).
“The historical records show that countries that achieve a debt going above 60 per cent or 90 per cent are caught in a trap of debt, which impedes growth and stifles prospects of development,” he pointed out.
He stated that the agreement reached with the International Monetary Fund (IMF) on May 1 of this year, is designed to reduce the debt to 96 per cent of GDP by 2020.
Another target is to lower wage expenditures in the public sector from 10.6 per cent of GDP to not more than nine per cent. Dr. Phillips commended public sector workers for working with the Government to reduce this expenditure by agreeing to a wage freeze until 2016.
“Having participated in those discussions, I can say it is a reflection, not of any coercion, but of the trade unions’ recognition of the plight of the country, and their patriotic commitment to Jamaica’s future,” he stated.
The Finance Minister said that a key part of the economic reform process is to achieve higher levels of growth and to create jobs. As such focus is being placed on the small and medium enterprises sector, which currently accounts for about 70 per cent of the jobs that are created.
“Through the Development Bank of Jamaica (DBJ), we made $2 billion available last year, specifically for small and medium enterprises and another $2 billion this year for small and medium enterprises,” Dr. Phillips said.
“We are going to be doing other things to facilitate access to credit for small and medium-sized businesses. They will benefit in many ways from the creation of venture capital opportunities, which we are committed to do,” he added.
The Finance Minister said Jamaica will also be taking advantage of its ideal geographical location to become a world class logistic hub.
“We are the last port heading west to the Panama Canal, and we are the first port heading east from the Panama Canal. We are equidistant between the fast-growing markets of South America and the still vibrant developed markets of North America,” he noted.
Dr. Phillips also said that the Jamaican government is privatising the Kingston Container Terminal aimed at bringing about more investment for its continued expansion and development.
He informed that there is also a focus on agriculture and the information technology (IT) sector. In agriculture, progress is already been made through the development of specialist agro parks, aimed at increasing production to reduce the country’s food import bill.
Contact: Vivienne Siva