- Sagicor CEO, Richard Byles, says the IMF MEFP is a feasible plan that can bring the level of economic stability that the country needs.
- The MEFP aims to reduce the debt to GDP from in excess of 100 per cent to 96 per cent by 2020.
- Mr. Byles, however, cautioned that achieving this “modest” level of growth “will become a challenge”.
Sagicor Life Jamaica Limited’s President and Chief Executive Officer, Richard Byles, says that the four-year Memorandum of Economic and Fiscal Policies (MEFP), negotiated with the International Monetary Fund (IMF), is a feasible plan that can bring the level of economic stability that the country needs.
“First of all, we (Sagicor) have examined, very carefully, the MEFP and believe it to be a technically and achievable plan that can lead to greater economic stability. We have done our due diligence on the MEFP, in the same way we would have done it on any investment project,” he stated.
He was delivering the eighth Planning Institute of Jamaica (PIOJ) Dialogue for Development Lecture on Tuesday, November 26, at the Jamaica Pegasus Hotel, New Kingston.
The Sagicor Head reminded his audience that the MEFP aims to, among other things, reduce the debt to gross domestic product (GDP) from in excess of 100 per cent to 96 per cent by 2020. This, he added, is expected to be achieved mainly through the attainment of at least a 7.5 per cent primary fiscal surplus each financial year, over the period 2013 to 2017.
Additionally, he said, it outlines the framework for financial management of the economy, and a growth strategy built on fiscal consolidation, structural reforms, and a number of strategic investment projects identified by the government.
“It seeks to address the fundamental impediments to sustainable growth…(which) is expected to be quite modest, a mere 1.5 per cent per annum over the period 2013 to 2017,” he added.
Mr. Byles, however, cautioned that achieving this “modest” level of growth “will become a challenge” unless the private sector is afforded access to the credit space by Government, in light of the “fiscal tightening” earmarked during the period.
He opined that strengthening the private sector’s confidence in the economy is fundamental to efforts at reducing the country’s debt and attaining growth.
He argued that a lack of confidence often “blinds us” to opportunities. He pointed out that Sagicor Life has demonstrated the confidence to invest in Jamaica, noting that “we take challenges and turn them into opportunities.”
One such success, he shared, is the entity’s Jewels hotel chain, which increased from one establishment providing 200 rooms, to three with some 750 rooms, adding that “they are all successful.”
Mr. Byles said that the company has such significant local investments “that we have to be committed to economic recovery.”
“In a sense, we have taken ownership of Jamaica’s economic performance. The fact is, if there is confidence that the future will be better, investors will brave all kinds of perils and work around all types of inefficiencies, because the prize is worth it,” he stated.
While noting that strengthening confidence is “encouraged by talk,” he stated that it is “built by action.”
“Each (IMF) quarterly test that is passed, builds confidence. Each investment made by the business sector builds confidence. Each reform the government delivers builds confidence,” Mr. Byles underscored.
This year’s lecture was held under the theme: ‘Going for Growth in the Jamaican Economy in a Contractionary Environment’. It focused on issues related to economic growth over the medium to long-term; strengthening private sector confidence; and creating investment opportunities, among other areas.
It was sponsored by the European Union (EU), and attended by representatives of Jamaica’s international development partners, the Diplomatic Corps, government, the business sector, academia, and the general public.