Business View Caribbean - Dec 2014 75
factured 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 market-
place. 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 time with an IMF agree-
ment, 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 them
with 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, Ca-
ribbean 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, cen-
tral treasury management, cut back a lot of the social
intervention programs – the country has gone into a re-
cession. And, it’s only in the September quarter that we
had half of 1 percent growth, but we’re still in a reces-
sion and we continue in the recession now. The indus-
tries that are growing right now are mining and agricul-
ture, 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 di-
rect investments, to rebuild infrastructure and put new
business in.
The other one that they’re negotiating is to open up,
bring agriculture in Jamaica, which has been very in-
formal, into an organized way, whereby farmers grow to
specifications and the products are bought, graded and
sold. Because we have a very informal system, a lot of
our hotels do not buy locally, they buy agricultural prod-
ucts out of Miami and bring them in, so that’s foreign
exchange going out. They are looking for agricultural ex-
ports and import substitution. And then they are also
going to put in a program which is more medium to long
term, to go after the MSME sector, small business sec-
tor, but that’s going to take time to build a sector.
