Well let's see what cooking in Jamaica Man.

I see where that debt pit fall are having a dreadful time fo de countree. To wit'd Man:

Business

Jamaica caught in debt trap

BY CAMILO THAME Business co-ordinator thamec@jamaicaobserver.com

Friday, May 11, 2012



JAMAICA'S Debt Exchange (JDX) two years ago may have lowered its interest costs, but the country remains in a debt trap, with payments by far the highest in the world, relative to GDP.

A recent report by the Washington-based Centre for Economic and Policy Research (CEPR) said that the savings from the debt swap allowed fiscal policy to adopt a more neutral, less contractionary stance without worsening the overall fiscal deficit.

[Hide Description] Finance Minister Peter Phillips led a delegation to Washington to negotiate with the IMF.


"Nevertheless, Jamaica's interest payments remain extremely high, amounting to nearly 10 per cent of GDP in 2011, or 2.5 times what was spent on capital programmes," said the report.

"The burden of excessively high interest payments will continue to displace public investments, which are needed to restore normal growth and bring down the persistently high levels of poverty and unemployment."

Greece, which is at the centre of the European financial crisis, came the closest to Jamaica in terms of the debt service burden, with net interest payments totalling approximately six per cent of GDP last year.

The Washington-based group believed the JDX did not go far enough, given that Jamaica's public debt burden remains dangerously high (at over 130 per cent of GDP) and "most likely unsustainable".

"This is due to the sheer size of Jamaica's debt stock and the limited scope of the JDX, which only sought to restructure domestically held debt and did not seek a reduction of principal," the report said, adding that the debt swap didn't sufficiently lower the high interest rates on the debt.

"This situation is problematic for a country of Jamaica's income level, [COLOR=#ED1C24]which should be able to invest in infrastructure and human capital, as well as have the financial flexibility to respond to frequent natural disasters and other external shocks," [/COLOR]said the report.

The group believes that multilateral institutions, including the IMF, World Bank and Inter-American Development Bank, have "played a particularly problematic role, supporting contractionary policies intended to maximise the primary surplus and prioritise the service of debt".

"This amounts to a consistent transfer of output from taxpayers to domestic and foreign creditors, and a serious impediment to the formulation and implementation of a development agenda," the authors wrote.

"As long as creditors are prioritised over the country as a whole, Jamaica will remain heavily indebted with persistently low growth."

Jamaica's economy grew by 1.5 per cent last year after three years of negative growth rates, but the economy still remains below its 2008 level of GDP.

The group argued that, as a developing country, Jamaica needs to increase spending on health and education, yet debt servicing (interest payments and amortisation) takes up such a huge portion of the budget that social spending is constrained.

Total debt servicing has taken up nearly 50 per cent of total budgeted expenditures over the last four fiscal years.

Health and education combined have only been around 20 per cent.

Jamaica is currently trying to secure a new agreement with the IMF.

Finance Minister Peter Phillips recently led a delegation to Washington to commence negotiations.

Economist and CEPR co-director Mark Weisbrot said a key sticking point between the IMF and the Jamaica government is the cap on the public sector wage bill.

"It's clear workers have had enough of wage freezes, yet if the Jamaican government is unable to ensure more accommodating policy conditions from the IMF, the likelihood of further wage freezes or layoffs is definitely a possibility," said Weisbrot.

Read more: http://www.jamaicaobserver.com/business/Jamaica-caught-in-debt-trap_11436936#ixzz1urzdjzfC


Answer is plain - ditch the crooks in the IMF and international capitalist community, find a strong sponsor repossess property etc.

Just as North Cyprus did. The underprivileged Turkish Cypriots rose up.

S.



-----------------

So let me get you right ABC:


You're saying Jamaica needs to ditch the IMF and get another sponsor?

And WHO in their right mind is going to take over a ship with so many problems? China?

I guess the Chinese might have some interest in buying up all the bauxite deposits on the island, but what else could they get in Jamaica that their dealings in Africa wont offer them and greater volume, closer to market, and perhaps cheaper prices

[QUOTE=Atabey]
Well let's see what cooking in Jamaica Man.

I see where that debt pit fall are having a dreadful time fo de countree. To wit'd Man:

Business

Jamaica caught in debt trap

BY CAMILO THAME Business co-ordinator thamec@jamaicaobserver.com

Friday, May 11, 2012



JAMAICA'S Debt Exchange (JDX) two years ago may have lowered its interest costs, but the country remains in a debt trap, with payments by far the highest in the world, relative to GDP.

A recent report by the Washington-based Centre for Economic and Policy Research (CEPR) said that the savings from the debt swap allowed fiscal policy to adopt a more neutral, less contractionary stance without worsening the overall fiscal deficit.

[Hide Description] Finance Minister Peter Phillips led a delegation to Washington to negotiate with the IMF.


"Nevertheless, Jamaica's interest payments remain extremely high, amounting to nearly 10 per cent of GDP in 2011, or 2.5 times what was spent on capital programmes," said the report.

"The burden of excessively high interest payments will continue to displace public investments, which are needed to restore normal growth and bring down the persistently high levels of poverty and unemployment."

Greece, which is at the centre of the European financial crisis, came the closest to Jamaica in terms of the debt service burden, with net interest payments totalling approximately six per cent of GDP last year.

The Washington-based group believed the JDX did not go far enough, given that Jamaica's public debt burden remains dangerously high (at over 130 per cent of GDP) and "most likely unsustainable".

"This is due to the sheer size of Jamaica's debt stock and the limited scope of the JDX, which only sought to restructure domestically held debt and did not seek a reduction of principal," the report said, adding that the debt swap didn't sufficiently lower the high interest rates on the debt.

"This situation is problematic for a country of Jamaica's income level, [COLOR=#ED1C24]which should be able to invest in infrastructure and human capital, as well as have the financial flexibility to respond to frequent natural disasters and other external shocks," [/COLOR]said the report.

The group believes that multilateral institutions, including the IMF, World Bank and Inter-American Development Bank, have "played a particularly problematic role, supporting contractionary policies intended to maximise the primary surplus and prioritise the service of debt".

"This amounts to a consistent transfer of output from taxpayers to domestic and foreign creditors, and a serious impediment to the formulation and implementation of a development agenda," the authors wrote.

"As long as creditors are prioritised over the country as a whole, Jamaica will remain heavily indebted with persistently low growth."

Jamaica's economy grew by 1.5 per cent last year after three years of negative growth rates, but the economy still remains below its 2008 level of GDP.

The group argued that, as a developing country, Jamaica needs to increase spending on health and education, yet debt servicing (interest payments and amortisation) takes up such a huge portion of the budget that social spending is constrained.

Total debt servicing has taken up nearly 50 per cent of total budgeted expenditures over the last four fiscal years.

Health and education combined have only been around 20 per cent.

Jamaica is currently trying to secure a new agreement with the IMF.

Finance Minister Peter Phillips recently led a delegation to Washington to commence negotiations.

Economist and CEPR co-director Mark Weisbrot said a key sticking point between the IMF and the Jamaica government is the cap on the public sector wage bill.

"It's clear workers have had enough of wage freezes, yet if the Jamaican government is unable to ensure more accommodating policy conditions from the IMF, the likelihood of further wage freezes or layoffs is definitely a possibility," said Weisbrot.

Read more: http://www.jamaicaobserver.com/business/Jamaica-caught-in-debt-trap_11436936#ixzz1urzdjzfC


Answer is plain - ditch the crooks in the IMF and international capitalist community, find a strong sponsor repossess property etc.

Just as North Cyprus did. The underprivileged Turkish Cypriots rose up.

S.



-----------------

So let me get you right ABC:


You're saying Jamaica needs to ditch the IMF and get another sponsor?

And WHO in their right mind is going to take over a ship with so many problems? China?

I guess the Chinese might have some interest in buying up all the bauxite deposits on the island, but what else could they get in Jamaica that their dealings in Africa wont offer them and greater volume, closer to market, and perhaps cheaper prices
[/QUOTE]


Get the Jamaicans growing food instead of using drugs. I have recollections of the Jamacians in the UK in the 70,s telling me that they sent money back. Good people mostly.
Now Jamacia reeps the rewards for money for free, Drugs, crime, murder etc. brought about by US inspired IMF. Jamacian I met fairly recently were ashameed of their country.

Program is simple:
Self sufficiency in food.
Good education.
Keep US influence and capital out.
Build links with other underdeveloped countries in the World.
Give Jamacians inspiration for a spirit of service instead of US inspired spirit of grabbing.

They inherited much of this from UK rule but then they let US in.

They have much to learn from Cuba!

S.

TOO LATE ABC:

"glimmers of hope of such a "magical" performance from Phillips might look like."


[URL]
Read more: http://www.jamaicaobserver.com/business/Jamaica-chooses-austerity-to-pave-way-for-bond-and-IMF-deal_11071665#ixzz1usPd82S6[/URL]

[COLOR=#ED1C24]
Jamaica chooses austerity to pave way for bond and IMF deal[/COLOR]

By Keith Collister

Sunday, May 13, 2012



The release on Thursday of Jamaica's estimates of expenditure for the coming fiscal year 2012/2013 reveal that Finance Minister Dr Peter Phillips has taken a decisive step towards a credible fiscal budget for this year. Indeed, he may yet emerge almost Houdini like (after the famous escape artist of the last century) from what had looked to many observers as an almost impossible situation, verging on a fiscal crisis.

This escape from fiscal crisis is not without price. The true level of austerity is shown by a quick look at the recurrent budget. Out of a total budget (including debt repayment) of $612.5 billion, total recurrent spending, meaning programmes, wages and interest, is $375 billion, or a $23 billion (about seven per cent) increase above the final revised estimates for the previous financial year. This increase is misleading however in calculating the tightness of the budget, as just under $16 billion represents an increase in interest costs to $136.5 billion. Of the remaining $7 billion increase in non - interest recurrent spending to $239 billion, just over $2.3 billion reflects an increase in pension costs to just over $24 billion, and just under $4 billion reflects an increase in local government costs to $7.5 billion. The majority of this latter increase reflects a quadrupling of the money spent on fire protection services to just over $3.1 billion.

[Hide Description] Prime Minister Portia Simpson Miller (centre) leads members of the ruling People’s National Party into Gordon House on Thursday during the ceremonial opening of Parliament. (Photo: Garfield Robinson)
[Restore Description]
1/1

What all this means is that overall there is a total freeze on expenditure on wages and programmes for every other category of recurrent spending, which with Jamaica's Central Bank Governor Brian Wynter projecting an increase in the rate of inflation of six to eight per cent in this fiscal year, means a severe cut in spending in real terms. Furthermore, a number of key ministries, including health, education, national security and justice appear to have had their funding cut in absolute dollar terms.

The projected increase in capital spending, from $184 billion at the end of the last financial year to just over $237 billion in the budget, is entirely driven by a huge $70 billion increase in debt amortisation (repayment of debt), from $128 billion to $198 billion. This increase in amortisation is primarily driven by a $57.4 billion increase in the repayment of internal debt, from $67.2 billion to $124.6 billion (signalling the end of the benefits to our maturity schedule of the Jamaica Debt Exchange) and a smaller $12.8 billion increase in external debt repayment, from $60.8 billion to $73.6 billion.

Real central government capital expenditure, on projects and capital equipment, has been cut dramatically. If we subtract debt amortisation of $128 billion from last year's final capital budget of $184 billion, we get last year's capital spending figure of $56 billion. If we compare this with the $237 billion of budgeted capital expenditure for 2012/2013, and subtract planned amortisation of $198 billion, the remainder is total real capital expenditure of around $40 billion, meaning that capital expenditure has been cut by $16 billion dollars. It should also be noted that last year's final figure for real capital expenditure of $56 billion was itself a significant reduction from the over $60 billion in the original budget.

This suggests that a very serious, almost herculean effort is being made to satisfy the requirements of the international capital markets and the IMF, involving both a wage freeze and real and nominal cuts in programmes and capital expenditure respectively. This has a number of consequences, both good and bad.

Firstly, this greater than expected fiscal effort should allow Jamaica to borrow abroad next week by issuing a Eurobond at a rate of around nine per cent, or perhaps even a bit less, despite the worsening condition of the global financial markets, thereby demonstrating the government still has international capital market access. The rigour of the budget itself would also mean that the government has gone a long way towards meeting the IMF's likely demands on the expenditure side, particularly the need for a freeze in the public sector wage bill, a key part of the so called bitter medicine. This would suggest that the IMF would be willing to ignore the increase in pension costs this fiscal year, leaving it as a medium term requirement, thereby accepting that one could not do every tough reform in one year, particularly in view of the proposed wage freeze. In addition, the figure for interest costs looks somewhat over stated, or at least assumes a worst case scenario of a substantial return to the local domestic capital market, or a significant rise in interest costs. Whilst both scenarios are possible, they become much less likely with a successful bond deal and IMF agreement, with the more likely outcome being some of the interest "savings" (from interest costs being again below budget) being part of the contingency to meet the almost inevitable need for some level of additional programme spending.

It also reduces the need for an enormous, as opposed to merely large, tax package to meet the IMF's fiscal targets. It appears that the government has in fact fully realised that the serious fragility of the Jamaican economy, added to weakness in the global economy, meant that an overly large tax package could actually be quite counterproductive, with higher rates resulting in reduced tax revenues in some areas. If the remaining fiscal gap to reach a primary surplus target of six per cent and a 4.5 per cent fiscal deficit target is say $18 billion (assuming passive tax revenue growth of about six per cent), as suggested by financial analyst Colin Steele, this is a far cry from a tax package previously expected at up to $30 billion, always depending of course on the level of expenditure restraint assumed. If at least one creative current private sector proposal is adopted, it may be possible to reduce the remaining fiscal gap to around $6 billion, or remarkably close to that of the additional tax revenue requirement originally proposed by the Private Sector Working Group of $7.3 billion. If the society accepts the consequences of such an unexpected, as yet unnamed fiscal cushion, then this would both present an opportunity for further reform in a critical area of the local financial markets, and would allow a real tax reform to occur (another IMF requirement) with a potential virtuous circle emerging from the compliance dividend that would result. Indeed, a minimum initial compliance dividend of about $6 - 8 billion for the first year would be entirely reasonable, with much more over the medium term, including the benefits of faster growth. We shall explore in more detail in subsequent articles what these glimmers of hope of such a "magical" performance from Phillips might look like.

It also reduces the need for an enormous, as opposed to merely large, tax package to meet the IMF's fiscal targets. It appears that the government has in fact fully realised that the serious fragility of the Jamaican economy, added to weakness in the global economy, meant that an overly large tax package could actually be quite counterproductive, with higher rates resulting in reduced tax revenues in some areas. If the remaining fiscal gap to reach a primary surplus target of six per cent and a 4.5 per cent fiscal deficit target is say $18 billion (assuming passive tax revenue growth of about six per cent), as suggested by financial analyst Colin Steele, this is a far cry from a tax package previously expected at up to $30 billion, always depending of course on the level of expenditure restraint assumed. If at least one creative current private sector proposal is adopted, it may be possible to reduce the remaining fiscal gap to around $6 billion, or remarkably close to that of the additional tax revenue requirement originally proposed by the Private Sector Working Group of $7.3 billion. If the society accepts the consequences of such an unexpected, as yet unnamed fiscal cushion, then this would both present an opportunity for further reform in a critical area of the local financial markets, and would allow a real tax reform to occur (another IMF requirement) with a potential virtuous circle emerging from the compliance dividend that would result. Indeed, a minimum initial compliance dividend of about $6 - 8 billion for the first year would be entirely reasonable, with much more over the medium term, including the benefits of faster growth. We shall explore in more detail in subsequent articles what these glimmers of hope of such a "magical" performance from Phillips might look like.

"What all this means is that overall there is a total freeze on expenditure on wages and programmes for every other category of recurrent spending, which with Jamaica's Central Bank Governor Brian Wynter projecting an increase in the rate of inflation of six to eight per cent in this fiscal year, means a severe cut in spending in real terms. Furthermore, a number of key ministries, including health, education, national security and justice appear to have had their funding cut in absolute dollar terms."



Are "these glimmers of hope" for Jamaica

when you make statements like these, it just reminds me that you are not even worth discussing things with. not enough information, and too many oped articles. go to school, and try to understand basic economic theory

Look at the DR. again, why does it have far lower numbers and standards of living than her wealth and geography would otherwise suggest? Chiefly because of her own making. Old patrimonialism; Too many hands in the cookie jar and poor to non-existent institutions to forge a modernization and development model.

any glimmer of hope that you will grow a pair of balls, and become a man, some day? you shot your mouth off once, about giving me pelas regarding FDI. i posted a series of questions, and, like the cockroach you are, you ran away, and hid. then, you started up with the foolishness once more , and i went to the archives, and posted the questions, for a second time. once more, like the scruffy mongrel that you are, you ran away, ignored it, and changed the subject. i declare you pitiful, but i realize that ignorance is your forte, so i give you a pass.

Ha Ha Ha HA!!!


When the going gets tough the tough get going

No defense for yea Dready

After 50 years of Independence...

Tuesday, May 15, 2012

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Dear Editor,

There is much yapping in all media about Jamaica's 50th year of Independence — the so-called jubilee year. Yet, despite all the warm and fuzzy feelings that the political directorate and their media wizards are trying to conjure up, reality looms ever so closely, nay threatenly, in the daily lives of ordinary Jamaicans. The image we see is a beleaguered people — hopeless and despairing.

Fifty years after our vaulted independence, our education system is in a shambles, producing cohorts who can mostly only regurgitate inane trivia as is paraded on the Schools Challenge Quiz television show. Nothing like their counterparts in India, Korea or Singapore who create computer software that runs the world.

Fifty years on we have an obsolete education system leading to the miseducation of our children and with factory-like efficiency produces mostly lost generations of youths.

Fifty years after attaining our hard fought Independence from uncaring colonial masters, the stitches of our social fabric, that which binds us as a people, is shredding and busting at every seam. Our male youths see themselves as mere clones of the 'Ugly American'... African American ghetto culture ...gangs, guns, drugs and bloodletting.

And like their mirror counterpart they have caused havoc and let loose the dogs of war — internecine warfare, gang warfare, turf warfare — war on society and its values. Thus in our 50th year of self-governance we have the distinction of being the murder and crime epicentre of the planet.

Fifty years after winning our Independence we have an economy that generates mostly unemployment and hardship for the vast majority of Jamaicans. It produces one-tenth the mean national income of Singapore, Barbados or Malaysia — nations that are the same age as us in terms of self-government. Yet our political directorate and their media conjurers would have us blushing with pride and prancing and whining in the streets in this our Jubilee year.

Fifty years on we have no independence, rather total dependence on foreign monopolists for our energy production. Whether PdVSA of Venezuela or North-East Electrics of Korea there is no independent decision that can be taken concerning our future energy direction... yet the political directorate and their media clowns would have us blushing with pride in this our 50th year of Independence come early August morning.

Thus this lonely soul hereby and thereby commit, that come this August morning, in this the 50th year after our Independence, to pour out libations to our ancestors in atonement; to wail in remorseful grief for having, as a people, squandered the promise of their hard fought and won victory; and in penitent atonement rededicate this life to the continuation of that struggle ...the struggle for the real fruits of independence... not this media charade concocted by the political directorate and their media henchmen.

Read more: http://www.jamaicaobserver.com/columns/After-50-years-of-Independence---_11460685#ixzz1uwIqmrVS

says the moron sabelotodo, Atabey

When the going gets tough the tough get going

in your case, when the going gets tough, the cowards run away.

i agree that there is very little to celebrate in Jamaica, these days. the only little bit of consolation is that we are at least ahead of you in the Human Development Index. we may be going backwards, but you still have not caught up.