News and Updates | Economic Programme Oversight Committee (EPOC)

July 2017: Update on 3-year IMF Precautionary Stand-by Arrangement (PSBA)

The new Precautionary Stand-By Arrangement (PSBA) with the Government of Jamaica (GOJ) was approved by the Executive Board of the International Monetary Fund (IMF) on November 11, 2016. The GOJ met the indicative programme conditions for the IMF SBA as at end-March 2017*.
The EPOC met on July 17, 2017, and reviewed the latest available results. Jamaica has met all structural benchmarks under the programme through end-June 2017. Based on the preliminary results for performance to date, the GOJ is on track to meet the targets for the QPCs and ITs for the IMF PSBA for end-June 2017.
* Based on the results for performance to date through the end of March 2017.

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World Bank urges Jamaica to diversify

Jamaica’s tourism industry may find itself in need of a drastic overhaul as data from the World Bank points out that the island, among other Caribbean countries, is now lagging in competitiveness behind other regions in the world.
Tourism, which is currently one of Jamaica’s largest earners of foreign exchange, was on Wednesday red-flagged by the World Bank as one of the long-term risks and vulnerabilities that the country faces, in addition to its legacy of high debt, policy uncertainty and recent flooding.
According to lead economist at the World Bank, Philip Schuler, the Caribbean’s tourism model has shown trends of decline in competitiveness, with countries in south Asia, east Asia and sub-Saharan Africa expected to grow at faster annual rates in tourism and investment than the 3.6 per cent Caribbean countries will see over the next 10 years.
“The Caribbean is a very tourism-dependent region; it’s growing, but it’s growing much more slowly than the world as a whole,” Schuler told media representatives during a briefing on the World Bank’s analysis of the macroeconomic outlook for Jamaica in the context of the new US$70-million Development Policy Loan approved by the bank.
He added that data presented by the World Travel and Tourism Councils places the Caribbean in the bottom half based on the region’s average annual contribution of tourism to gross domestic product (GDP) and investment.
“Essentially, the model of tourism in the Caribbean and Jamaica is one that is very much focused on enclave, all-inclusive beach resorts, and that is not a fast-growing segment of the world tourism market,” Schuler said.
He reckons that Jamaica and other Caribbean islands could increase visitor arrivals with the introduction of more ecotourism, cultural tourism and farm tourism.
According to the World Bank, Jamaica’s economy has been moving on a positive trajectory over the last four to five years, with year-on-year increases in GDP and total employment. The same has also been reflected in the country’s external balances, with 2016 recognised as the best in 20 years when the current account balance almost balanced GDP, led by increases in net export services including tourism and BPO services, as well as a declining trade deficit.
ROOM FOR MORE SMALL BUSINESSES TO GET IN THE GAME
Nonetheless, the World Bank believes that Jamaica can capitalise on a lot more opportunities in tourism to reflect the changes in the global demographics.
“The generation that’s getting older and travelling less liked cruise, all inclusive resorts. The younger generation — the millennials — are looking for more authentic experiences. Learn how to cook Jamaican food as well as going to the beach — there are new types of products and a lot of opportunities,” he said, adding that more tourists are now making visiting arrangements on their own with the introduction of Airbnb and TripAdvisor.
“That wasn’t always to the advantage of Jamaica where international companies take that money from the traveller and keep the profit and handing out small amounts to line up different activities at the resort and not spilling over into other parts of the economy,” he reasoned.
Schuler noted that the change in how international guests interact with destination markets presents an opportunity for more small businesses to get into the game and “to link up with younger travellers”.
Through the Rural Economic Development Initiative, the World Bank and the Jamaica Social Investment Fund have supported projects in the Cockpit Country and Rasta Village in St James.
Still, Country Manager Galina Sotirova says the hotel standards are tailored to the big tourist resorts and creates a real obstacle to the development of small projects.
“[What] you hear from a lot of the project managers is that the standards that they have to comply with in order to get onto the tourism website and be registered with the tourism board are not suitable for the kind of tourism they are looking at,” Sotirova said.
She added that there are regularity issues that need to be addressed, and the World Bank is working with the Government to ensure more support is given in how smaller firms market and sell their products.
Source:The Observer

Explaining government (economic) policies is too important to be left to government: EPOC, EGC & CaPRI show why

Dennis Jones
I was struck by an Editorial in The Gleaner on May 23, ‘ ‘Good Initiative, Mr Duncan, But … ‘ noting (my emphasis) that Keith Duncan, co-chair of the Economic Policy Oversight Committee ‘has taken his show on the road. He is on an education exercise, going into communities, attempting to break down the seemingly arcane ideas of finance into the language of the people and show the relationship between achieving the IMF targets and people’s lives.
The Editorial noted that many more Jamaicans that would have been the case otherwise will have a better understanding of the targets the government is committed to achieving under the IMF programme. That should make for better buy-in from the nation.
But, the Editorial saw ‘a risk, should he not be careful, of the blurring of the lines between the committee’s job of monitoring performance, based on the empirical analysis of a specific set of data, and the responsibility of political leaders to enunciate policy and explain to constituents the basis on which competing priorities are resolved.’ Further, the Editorial argued ‘Mr Duncan should be wary of being perceived as usurping the role of Government. We are quite happy with policing the implementation of the programme, rather than being drawn into social engineering.’
My view is this perceived risk is that it is not that great. Many agencies and commentators can and will attempt to help others understand what government is doing, and their stipulated roles are usually kept fully in view. If there are issues in certain interpretations, part of a good democracy would be that government can express its displeasure, if it amounts to that, or conversely express its thanks because sometimes others are better at the process of explaining policies. In fact, that’s one of the key features of a free press/media. Also, government’s explanations of what it is purporting to do can often be self-serving, not least because politicians like to give the best impression of what they do, seeking to extract credit and minimize blame.
During the talk, I drew attention to the other recent attempts to explain better parts of government economic policies, as undertaken by the Economic Growth Council through its public forums, and the think tank, Caribbean Policy Research Institute (CaPRI), with its recent public forums (on the 2017-18 Budget and this week on ‘Strenthening Integrity through Innovation’). All of these events try to draw the public more closely ‘into the tent’ and be part of the dialogues that are going on.
My view mirrors that expressed by educator and advocate Carol Narcisse:
“The economic programme is not going to be successful if we the people don’t understand it, don’t participate in it, don’t think it is a good thing, don’t see how it is going to benefit us, and if we don’t have an equitable way in which to both participate and benefit from the results of it.”
I would agree, also, with the complementary view she expressed: ‘EPOC going ‘On the Corner’ is an example of participatory democracy and is an extension of its responsibility to provide oversight.’
Author: Dennis Jones

On The Corner | Right Move! – Longville Park Residents Endorse Community Forum On IMF Programme

With the crime monster claiming more than 60 lives since the start of the year in Clarendon, it would not be strange if this was cited as the biggest impediment to economic growth in the parish, but not so say some residents of Longville Park.
They say that the greatest impediment to economic growth in Jamaica is corruption and that much of this stems from unnecessary bureaucracy.
Kemeila Ewers was part of a group of residents who participated in The Gleaner’s ‘On the Corner’ series with co-chairman of the Economic Programme Oversight Committee (EPOC) Keith Duncan last Wednesday, and she was adamant that corruption is a clear and present danger.
TRY AGAIN
“We face too many barriers to get fundamental things done in our own country, and it frustrates you to the point where you just give somebody a money,” declared the educator, pointing to the illicit process in which persons make back-door payments in order to acquire a driver’s licence.
“The authorities keep telling you to try again, come back in a week or a month. So, while some of them aren’t outright telling you to pay, in essence, that is the aim. So, naturally, if persons know someone who’s willing to accommodate that, they will oblige to speed up the process.

Social Development Commission Parish Manager Baldvin McKenzie makes a point at the On The Corner community forum where residents discussed the economy with EPOC Co-chair Keith Duncan.
ADDRESS FROM THE TOP
Ewers said, “However, a country like the United States, if you want to get an ID for whatever purpose, you have to go through the regular route. There’s no back door but the bureaucracy is minimal. The turnaround time is short.”
She argued that the issue of corruption is one which has to be addressed from the top down as those of higher social strata continually use their power to manipulate those at the lower level.
“It’s the higher level that breathes corruption, and then it flows down to the little man or those who are marginalised. It shouldn’t be a case where you’ve graduated, there’s a job opening and you don’t stand a chance equal to that of someone who knows the boss or the member of parliament.
“Why place a vacancy in the paper, to have somebody apply for the post when you know you’ve already selected someone and the person won’t be successful? It’s corruption, and if we don’t rid the country of it, there’s no way we can succeed economically because those who are worthy and deserving have to know someone to get somewhere,” charged Ewers.
The educator argues that there is a need for the various oversight bodies to be more aggressive in their duties to ensure transparency and accountability, a sentiment shared by Duncan.
“Corruption comes up on all of the indicators and pain points for investors who want to invest in Jamaica. It’s prevalent in our society. We see it in our processes daily, and we have to address it in a structural way down to the root so that the ease of doing business and the people’s level of comfort in doing business in Jamaica will be improved.
“The oversight bodies have to be fearless in executing their responsibilities from the top down. They have to hold all members of the government, the private sector, and anyone who engage, with both, to account around following the rules and guidelines of our society,” said Duncan.
Source: The Gleaner

June 2017: Update on 3-year IMF Precautionary Stand-by Arrangement (PSBA)

The new Precautionary Stand-By Arrangement (PSBA) with the Government of Jamaica (GOJ) was approved by the Executive Board of the International Monetary Fund (IMF) on November 11, 2016*. The GOJ met the indicative programme conditions for the IMF SBA as at end-March 2017.
The EPOC met on June 16, 2017, and reviewed the latest available results. Jamaica has met all structural benchmarks under the programme through end-May 2017. All of these measures have been provisionally met at end-April 2017.
*Based on the preliminary results for performance to date through the end of March 2017

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