Mark Ricketts | For the PM, it's been a very good year
Growth performance has not lived up to the hype of earlier forecasts. The growth trajectory, captured in the appealing phraseology of 5-in-4, was to be achieved by next year. this year, growth was expected to be 3%. The 5-in-4 has lost its lustre, not having been called upon recently, to remind the nation that 5% growth was to be achieved in the Andrew Holness' administration fourth year of running the government.
In fact, come to think of it, the Government has gone completely silent on reminding the nation that starting in the spring of next year, when the JLP administration starts its fourth year, the big five would be rolled out by the end of that fiscal year.
For decades, an impressive GDP growth rate, one that is sustained and well balanced, has been eluding the country. While estimates based on recent quarterly figures from the Planning Institute of Jamaica suggest we are not going to achieve our 3% target, we will come in a little above 2%. That's doubling last year's performance, which does give the PM, his party, and the country a little lift.
But it is more than a little lift for the prime minister, it is a swagger, and a level of overconfidence and self-assuredness in his presentations. After all, the statistics are positive in many areas. There are commendations from erstwhile institutions such as the IMF, which has been with us through thick and thin, and then there is the supererogatory (output beyond the call of duty) performance of some of his ministers.
LUCK FAVOURS THE FORTUNATE
When good things are happening, somehow luck favours the fortunate. Less than six months ago when oil was at a four-year high and trending further upwards, international commodity gurus were confident oil would reach US$100 a barrel by year end. If that had happened Jamaica would be in a pickle. Instead, with oil retreating to the mid-$50s and below, we are geniuses as far as our inflation rate and our exchange rate go. In politics, as with finance, you take the good and discard the bad. some days are diamonds, some days are stones.
Employment growth has been impressive, resulting in the unemployment rate that has been trending down for several years reaching an 11-year low, at 8.4%. Inflation, since 2013, has similarly been declining, coming in below full-year projection of 5.2%. Next year, with continued focus on price stability, targeted inflation in the first six months is slated to be between 4% and 6%.
The exchange rate, after causing jitters and much consternation among the public when it flirted with 140, clawed its way back to the upper 120s, no doubt with a little help from the BOJ. The central bank intervened to the tune of US$150 million between August and November, which, with the underlying strength of our reserve coverage, including our net International Reserves (NIR), bolstered a degree of confidence in our local currency, notwithstanding the fact that almost every other country's currency was faltering against the US dollar.
Understandably, our standing with credit-rating agencies has been improving since the economic reform programme started six years ago.
The IMF has praised the country for its achievements. In Jamaica's fourth review under the standby arrangements, the Fund commended Jamaica for its continued impressive performance. It pointed out that the country did very well on most of the tests in the Financial Stability Assessment Programme.
Bolstering Holness' confidence must be the sterling work of his ministers, including Kamina Johnson Smith, Dr Nigel Clarke, Dr Christopher Tufton, Ed Bartlett, and Delroy Chuck.
Kamina, quiet, articulate, has been an impressive find for the prime minister, especially in the difficult role of foreign affairs and foreign trade, where our country, weaned on equating principle with defiance, righteousness with Third-World conviction and leadership, has to move nimbly in a world of trade wars and conflicts, insularity and punishment, collateral damage and unexpected alliances.
Dr Nigel Clarke has brought intellect, business, communication skills, and an abundance of new ideas, which must redound to the good of all Jamaica.
Dr Christopher Tufton, Cornwall Regional Hospital notwithstanding, has brought a willingness to listen, to dialogue, and to care, in an extremely difficult ministry. Tourism's continued record-breaking performance speaks for Ed Bartlett, who makes smiling and optimism functional and productive bedfellows. Delroy Chuck is bright, assertive, and is obviously convinced that there must be multiple strategies in place to deal with the logjam in his ministry.
With road construction and other infrastructural improvements slated to either get rolling or be completed within two years, around the time when next general elections will be called, Prime Minister Holness is on a roll, appearing everywhere and talking on every conceivable subject matter. This is where he excels. He is personable and engaging, and he is always well prepared in his delivery and his grasp of the issues at hand.
He has this uncanny ability to switch from confrontation to courtesy from advocacy to amelioration, from aggression to appeasement, from pragmatism to hyperbole. Even if it is not possible, he offers comfort through overpromising. On housing, he throws out the line that Jamaicans will own their own homes so squatting - by what is estimated as around 30 per cent of the population - will be no more.
On employment, he is confident that "Jamaica will be in a position in the near future where it will have a job for every single person who is able and can work." He went a step further by saying that the country might have to be importing labour to fill an expected shortfall.
It must be a very good year for Holness as he exudes confidence, and the people are buying what he is selling, so much so that he is already proclaiming victory at the next general election. so much for foresight and conviction.
While I hate to burst the PM's bubble, I have some misgivings about the real sector of the economy. Productivity is lagging; we do not have a diverse and high-valued industrial base; and agriculture, which could be a significant growth driver for us, is badly undercapitalised.
To attract major investors, we have to discount and forgo so much in revenues through discretionary waivers, such as that which happened recently with the bauxite levy, where our revenue loss will exceed $2 billion annually. Such details can get lost in the shuffle in the land of overpromising.