JIS News

Chief Executive Officer (CEO) of Pan Caribbean Financial Services, Donovan Perkins has expressed optimism at the country’s prospects for economic advancement in 2005.
In an interview with JIS News, Mr. Perkins said the progress made within several sectors in 2004 had paved the way for further development in the New Year.
Citing various indicators of success in 2004, such as lower interest rates, the Memorandum of Understanding (MoU) between the Government and the labour unions, stability of the currency, improved balance of payment, the stability and growth of the net international reserves, the considerable investment by Spanish hotel chains in the tourism sector, and the expansion of the bauxite industry, Mr. Perkins noted that these had given rise to renewed investor confidence in the economy.
Furthermore, he said last year’s continued development of the country’s infrastructure, in terms of the construction of major highways, the refurbishing of the air and sea ports and advancement in telecommunications, laid the base for business expansion in and outside Kingston.
” I think what we’ve seen is diminished uncertainty, and there were fewer reasons in 2004 for investor suspicion. I think people have just gone about building their businesses and trying to find investment,” Mr. Perkins added.
Pointing to the Finance Ministry’s response to Hurricane Ivan in reaffirming its decision to still meet the fiscal targets, the CEO said he was “hopeful” this target would be met. He further expressed the hope that with the trending down in interest rates, resources would be made available to address various social problems, which had taken a backseat in the drive to meet the fiscal targets.
“We have to focus on fixing the problems that we have, which are many. We can’t give up and the only time we fail is when we give up trying,” he said.
Interest rates had soared to over 30 per cent during the early part of 2003. However, by the second half of that year, the government sought to lower these as it moved to attain fiscal stability. The trend continued to the first half of 2004, as investors became upbeat about the prospect of growth in the economy, particularly with the expectation of investments in the tourism and bauxite sectors.
The Bank of Jamaica, at the beginning of the year, was also able to lower rates on its investment instruments. The initiatives soon saw interest rates declining to between 14 and 17 per cent. In the meantime, the bullish movement of the Jamaican stock market in the early half of 2004 further confirmed investor confidence, while the foreign exchange market remained comparatively steady throughout the course of the year.
The fiscal target, set by Finance Minister, Dr. Omar Davies, prompted a contract between the government and trade unions representing public sector employees to sign the MoU on wage restraint.
This agreement would see salaries being capped at about three per cent for the period April 1, 2004 to March 31, 2006, allowing some 15,000 jobs to be retained in the public sector.
The government committed to manage its economic policies to ensure that the inflation rate remained within the targeted band of eight per cent to nine per cent in 2004/05 and six per cent to seven per cent in 2005/06. A monitoring committee, comprising representatives from the Government and the Jamaica Confederation of Trade Unions (JCTU) was appointed to ensure that the partners adhered to the spirit and intent of the MoU.

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