BROADCAST TO THE NATION BY PRIME MINISTER, THE MOST HON. P.J. PATTERSON on Sunday, 2004 March 21
Prime Minister of Jamaica, The Most Hon. P.J. Patterson ON, PC, QC, MP
Tonight, I want to bring the nation up-to-date on a number of domestic issues and share some very positive information with you.
MEMORANDUM OF UNDERSTANDING
In my address to the nation in January, I had outlined our time-table for bringing our National Budget into balance and the targets we had set to achieve this objective.
I explained then that one of the critical elements necessary to help control government expenditure was containing the growth of the public sector wage bill, which accounts for about one-third of government spending.
We have made a very important step in this regard with the signing on February 16 of the historic Memorandum of Understanding between the Government and the Trade Unions that represent a large number of public sector workers.
I once again commend the union leadership and membership as well as the government's negotiating team on this fine achievement. It bodes well for the building of the spirit of unity which is so vital at this time.
We are continuing discussions with other categories of public sector workers - and hope that we will also be able to reach an equally positive conclusion.
During the first week of this month, we took another important initiative when a delegation from the Bank of Jamaica and the Ministry of Finance and Planning held consultations in Washington with officials of the International Monetary Fund (IMF).
These discussions were in relation to developing plans for an alternate monitoring arrangement to replace the discontinued Staff Monitored Programme under which officials of the Fund had monitored the economic targets set by the Government of Jamaica.
Under the new programme, which is now being given favourable consideration by the Fund, we will continue to set quarterly targets agreed with the IMF. The proposal for the new arrangement is to have the Board of Directors of the Fund carry out the monitoring, thus giving it the IMF's endorsement.
The transparency and accountability that will be established in this new relationship will be very important, as it serves as a signaling mechanism for the domestic and international capital markets. This means an independent authority - that is the Board of Directors of the IMF - will evaluate the benefits and perceived risks that are involved in investing in the Jamaican economy. With positive performance, this mechanism is expected to contribute to the improvement of our international credit rating and a reduction of the cost of borrowing in the external market place.
DOING BUSINESS - HIGH WORLD RANKING
We enjoyed another positive sign of success in yet another aspect of our overall economic strategy - our high ranking as one of the top ten countries of the world in fostering a business-friendly environment, conducive to investment and job creation. That rating appears in the prestigious new annual World Bank publication which provides information on the business climate in over 130 countries. The publication, entitled "Doing Business 2004", rates countries that facilitate business development. We are the only developing country which appears in the top ten list.
This endorsement will stand us in good stead as we continue to promote investment in our country.
This rating is a direct result of the Government's reform and modernisation of the public sector.
Many of you will have heard the extremely good news: that ALCOA intends to undertake a US$690 million investment in Jamaica. This will be the largest single investment in our country for decades and will more than double the size of the JAMALCO plant in Clarendon.
Work on the project will start later this year and is to be completed in 2007.
The project will generate some 2,500 jobs directly in the construction activities on the plant site, and many more indirectly in the supply of the necessary goods and services to support the construction.
During the construction phase, there will be increased demand for communications services, professional services, banking services, hireage of construction equipment, food supplies for the workforce, and various construction-related goods.
When completed, this major expansion will generate an additional US$300 million per year of gross export earnings and the single largest additional source of foreign exchange ever in our history.
This news comes against the background of our bauxite sector's outstanding performance in 2003, when we registered a record level of alumina output and the highest rate of bauxite production in 28 years.
These achievements were made possible by the combined efforts of the work force, the companies and the government, under a framework agreement [MOU] designed to encourage modernisation and expansion of the industry.
The buoyancy in local production has coincided with a rebound in aluminium and alumina prices. This means that gross foreign exchange earnings will continue to rise in 2004 after increasing by over 8.6% in 2003, to reach US$773.5 million.
This latest JAMALCO investment and the one completed in December of last year are the direct result of the policy decision taken by this government to reform the tax arrangements for the industry. These investments certainly represent yet another vote of confidence by private investors in the Jamaican economy.
Over the past five years, much progress has been made in improving the competitiveness of the industry through steps to raise the productivity of the workforce, stabilise the macro-economic environment, and enhance the industrial relations climate.
These efforts are bearing fruit and should put the industry firmly on a path to stability, efficiency and growth.
Let me now say something about another "good news" area of the economy - the tourism industry.
You will recall that the industry was hard hit by the September 11 events. It is now on a strong growth path, having recovered all of the ground lost in visitor arrivals and foreign exchange earnings. The turnaround in the industry has also, very importantly, enabled those workers who lost their jobs after 9/11 to return to work.
Last year, the industry achieved record numbers of stop-over visitor arrivals and cruise passengers.
Stop-over arrivals grew by 6.6%, to one million, three hundred and fifty thousand (1,350,000) while the number of cruise passengers increased by an amazing 31% to one million, one hundred and thirty-two thousand.
Gross foreign exchange earnings by the sector also rebounded and actually exceeded the highest previous level which was registered in 2000, now reaching some US$1.34 billion. This has contributed to the improved supply situation in the foreign exchange market and the stabilization of the Jamaican dollar which we have witnessed in the recent past.
The return of cruise shipping to Port Antonio after many years is one of the bright spots of the growth which is taking place in the industry.
It has already meant greatly increased demand for taxi services, gift shopping, food supplies, and all of the various goods and services which are normally spurred by tourist activity.
The restoration of existing attractions and development of new ones require immediate attention by private investors and state agencies if we are to meet the demands of our visitors for things to do.
The government is taking steps to accelerate the implementation of the Tourism Master Plan which has laid out a comprehensive programme of development covering hotel rooms and other accommodation, natural and built attractions, cultural heritage sites, and training of workers in hospitality services.
I want to emphasize yet again that we must not leave the government alone to act on the opportunities which are now available in the sector. Small and medium-size businesses must get in on the act now. I urge members of our communities with initiative and drive to take advantage of the real potential that exists for the development of attractions. If you have a plan, or even if you are just at the idea stage, come forward and discuss them with one of the many institutions that exist to encourage entrepreneurship.
Talk with the Jamaica Business Development Centre, the Tourism Product Development Company, the Development Bank of Jamaica, a merchant bank or any commercial bank. Maybe even your credit union can assist you in translating your ideas into action.
Additionally, with interest rates coming down, now is the time to move capital into productive investment projects to spur long-term growth and development. The government has taken the initiative and I have instructed the Minister of Development to bring together a team of interested parties from the private sector to explore a range of feasible investment possibilities.
2004/ 2005 BUDGET
In the Throne Speech on March 31, our Governor General will outline the Government's legislative programme for 2004/2005. The programme will emphasize the revision of current laws and regulations and the acceleration of the introduction of new ones that focus on the rights of the citizens of Jamaica and our development agenda.
In his presentation of the Budget on April 15th, the Minister of Finance and Planning will outline the financing of the government's operations focused on our macro economic targets and policies and the development agenda.
Cabinet recently took the decision to make this year's Budget presentations shorter and simpler and to present Government's plans and programmes in such a way that every Jamaican can not only understand but can feel a part of the national effort and be moved to act together to meet our nation's economic and social goals. We all have a stake in their success.
God bless you and bless Jamaica, land we love.
Questions, comments? Write, call or send email to:
People's National Party
89 Old Hope Road
Kingston 6, Jamaica W.I.