Talking Business:
Francis Kennedy
30 minutes with the president of the
Jamaica Chamber of Commerce
BUSINESS VIEW:
It seems a large part of what
the chamber has been doing recently is promoting
relationships between Jamaica and the U.S.,
particularly South Florida. Is that your target area? Or
what is your agenda day-to-day?
Francis Kennedy:
The Jamaica Chamber of
Commerce in the past had been very inward looking as
far as the economy is concerned, because that is how
our members were operating. A lot of our companies
in Jamaica only exported to the traditional markets – the
United States, Canada and the United Kingdom and
Europe – and those are the countries that the country
has had great relations with for many years, from before
independence in 1962. However, what has happened is,
in order for us to survive as a country, we need to export
more.
Wehaveabalanceof payments deficit of about 2.9billion
U.S. dollars. Our main foreign exchange earnings are
remittances, tourism and traditional and non-traditional
exports. Traditional exports are the bulk of this, like sugar
and cocoa and coffee and that type of thing, and the non-
traditional are processed foods and manufactured goods.
However, that comes to about 5 billion U.S. dollars a
year, but our import bill is between 6.5 and 7 billion a
year, and we have a trade deficit of 2.9 billion. We have,
over the years, been borrowing money to pay for this
trade deficit on the international marketplace. We have
run out of borrowing power.
We have an overseas debt of about 130-140 percent
of the gross national product, so therefore we can no
longer continue to borrow. We entered into a program
in March (2013), an IMF agreement, and obviously with
the IMF agreement what you do have right now is fiscal
consolidation. But for the first timewithan IMFagreement,
we now also have a growth agenda. There are quarterly
tests – IMF agreements are for four years, so we have
16 tests to go through in the four years. We’ve gone
through two tests already and we passed themwith flying
colors – that is as of the end of June and the end of
September 2013.
Now, unlike previous agreements, we have agreed
with the IMF that we must have a growth agenda and
a growth agenda has been negotiated with the World
Bank and the Inter-American Development Bank. Each
one is for 500 million U.S. dollars over four years, each
125 million, so that’s 250 million U.S. dollars per year
between the two of them. There have been negotiations
going on, since the IMF agreement was signed in
early April, with the multi-laterals, that is the World
Bank, Caribbean Development Bank and the IADB.
Because of this, for the last nine months, because
of the fiscal consolidation that the government
has been forced to take on – minimum capital
expenditure, central treasury management, cut
back a lot of the social intervention programs – the
country has gone into a recession. And, it’s only
in the September quarter that we had half of 1
percent growth, but we’re still in a recession and
we continue in the recession now. The industries that
are growing right now are mining and agriculture, but
there are other industries that we have to get into. So,
that’s the conditions that we are in now and the five
or six things that we’re dealing with the World Bank
and IADB on, is for them to provide grant funding for
the master development plan for the redevelopment
of the two major city areas so that we can get foreign
