Sunday, October 16, 2016

Jamaica 2016 IMF Stand-By Arrangement

  • 2010: Stand-By Arrangement,  US$1.25 billion
  • 2013: Extended Fund Facility,  US$932.3 million
  • 2016: Stand-By Arrangement, US$1.7 billion
Jamaica and the International Monetary Fund reached an agreement to make $1.7 billion in funding available over the next three years as the government seeks to further cut one of the world’s highest debt loads while jump-starting a sluggish economy.

The stand-by agreement, announced Thursday, would make $430 million available immediately after the IMF board approves it next month. It replaces a four-year IMF loan that Jamaica took on after it restructured debt in 2013.

Andrew Holness said: “Our request to move to a precautionary arrangement is a sign of strength and reflects the policy credibility and strong macroeconomic management of the Jamaican government,”

“Jamaica has made commendable progress in its economic adjustment program over the past three and a half years,” said Alejandro Werner, IMF’s director for the Western Hemisphere. “Macroeconomic stability is becoming entrenched as evidenced by low inflation, the buildup of foreign currency reserves, and a decline in the current account deficit.”


The 2013 IMF agreement was an extremely strict IMF agreement where the Government was drip fed small amount of money only after performing certain task and jumping hurdles. The payment was 20 to 30 Million US$ at a time. It was that strict because the previous Government had borrowed 1.2 Billion, got US$850 million up front and broke every agreed upon terms. In 2012 because of that, Jamaica was locked out of the international financial markets and downgraded by all credit companies.

The last PNP Government followed the agreed upon 2013 terms, remained discipline and in so doing restored international confidence in Jamaica. The last Government return Jamaica’s financial books in proper working order.

  • Inflation: 3.7% lowest in 50 years, down from 6.0% in 2011
  • GDP Growth while small was always in the positive
  • Debt to GDP Ratio was reduced to 126% of GDP down from 150% of GDP in 2011
  • Jamaica Stock Market makes record in 2015
  • Jamaica moved up 5 places in the 2015 Forbes Best Countries for Business Report
  • Net International Reserve (NIR) US$2.44 billion, above target US$1.64 billion and stable
  • Primary Surplus of $55.8 billion, above target of $50.5 billion
  • International Rating Agency upgraded Jamaica’s Credit ratings over the years, Moody’s, S&P and Fitch all upgraded Jamaica.

Thus setting the stage for the 2016 IMF agreement

For the most part IMF Austerity did what any Austerity was design to do put our financial books are in a much better shape which gave this JLP Government the much needed wiggle room. Austerity did not produced the much need growth, growth at best was marginal and mediocre but positive.

But Austerity was never design for growth but a period of sacrifices design to reverse the many decades of irresponsible fiscal and economic policies we the Jamaican people allowed. That said we cannot and should not undermine the positive effects because I believe our previous financial status set the stage for this Government to do some good.

So How will the 2016 IMF Agreement be Implemented?
How this IMF agreement turn out in a couple years will depend on how the Government approach its implementation. In 2010 the JLP Government governed by popular demand especially after the Dudus invasion. They governed on a feel good, matrix like platform. Give the people what they want!

But what the people want is not always what is best for the people or in the interest of the people and nation building. Most of the time not bending to public pressure and giving the people what they want is the best thing to do. Yes it will make you unpopular with the people but this is not a popularity contest this is about nation building. In 2010 pumping all that money into the foreign exchange undermined local production as the people substituted local products for imported ones.

The people do not give a damn about growth, yes they pay lip service to it but deep down that is just some shit they say. The people want the ability to import consumer luxury goods cheaply, cell phones, weave, cars henny, pancake mix to name a few and to hell with local products and local producers and farmers. Jamaican will import onion and red peas by the tonne.

The Foreign Exchange Rates:

I suspect the exchange rate will start to reduce once the money from for this IMF agreement starts to flow into the market. I suspect Shaw pushed for an agreement that would allow him the freedom to pump money into the foreign exchange market.

At what point did the foreign exchange rate became the only economic indicator and the only measure of success or failure?

The only reason why the exchange rate is of such paramount importance is because of our import culture. Our need to import useless consumer goods most of which goes in one end and come out the other as brown stuff. We have a knack for importing things we already produce thus kicking away the legs from under local producers. The inflation rate is stable, the unemployment rate is holding, the goods production sector increased over last year, GDP is in the plus even if it is marginal and mediocre and many more indicators are stable or moving into positive territory and all this while the dollar is devalued. Yes we are still not where we want to be but we are not declining or declining at any fast rate.

Monday, October 3, 2016

Hurricane Matthew Destruction today, Rebuilding Tomorrow

What I love about software development is the process of designing a system, trying to think about all possible permutation of what could go wrong, the edge cases then design and code for it. I also love the feeling of unleashing my creations on the world, in that regard I suffer from a little bit of the god complex, knowing that my children, my creations are still running, still alive and still changing the world.

What I love about the permaculture method of agricultural is the process of designing a food production system that mimics nature. Hijacking the natural world and using it for food production because nature has everything figured out, it is the most efficient system. This method requires patience and a deep respect for the natural world because what nature gives you on one hand, nature can take back with the other. But it is all part of the natural plan, it is nature’s way of replenishing the earth. What looks like destruction today is a rebuilding process tomorrow as nature rises like a phoenix from ashes. Everything comes from the earth and as such must go back into the earth to carry on the natural cycle of rebirth.

Jamaica was created and exist in what is known as hurricane alley and a part from the yearly threats from storms and hurricane we also suffer threats from drought and yet we design nothing, plan for nothing, prepare for nothing except the nightly merriment. After studying how water flows around our yard due to flooding, we excavated the top soil and design a drainage system to manage the flow of water out of the yard. We hope we designed for every permutation of water flow to eliminate flooding but one never knows. However I believe in planning and designing, I enjoy that process and feel satisfied when it all works out. I love it when a plan comes together. I must ask the government when they were planning for a growth program did they take the reality of Jamaica into consideration, our global position as a bowling pin in the hurricane bowling alley of life. Did they plan for every permutation and edge cases or just created a growth program for that fictional country created by economist Utopia? Hurricanes are destructive yes but like the phoenix we can rise from the ashes better than we were before since the process of rebuilding after a disaster is in itself an economic stimulus.

Life always find a way
There will be an increase in demand for goods and services required to rebuild. In 1988 after Hurricane Gilbert Jamaica achieved 3.99% GDP growth, such was the effects of the rebuilding process. Already supermarkets have made record profits in days before the event and will make more after the storm passes. Farmers will not be that lucky, since crops could be destroyed but the people who must work to clear out the destruction, rebuild and prepare for replanting will be gainfully employed and the economic multiplier effect will kick in. We are too quick to use hurricane and drought as an excuse for failure, especially when we do nothing to plan and design for it. If you want failure then failure is what you will get.

Government Preparation and Execution Gets a B-Plus (B+)
The Government of Jamaica in preparing for the onslaught of Hurricane Matthew did very well with the planning, preparation and execution of their plans, to the point where I could have easily given a solid A if the hurricane had actually landed to see the real world application of the plan. The fact that at the last minute the Hurricane skipped around Jamaica really takes nothing away from the planning, preparation, execution and leadership shown by the Government. Everybody from the security forces to the thousand or people working throughout the night and day trying to batten down Jamaica and keep us safe really stepped up and played their part. Thank you and congratulation. We were not short of information and was kept up to date, Matthew could not make a move without everyone knowing exactly what he was up to.

The British Media continued dislike for Jamaica
The first rule when dealing with the British is that the British lie, it is also the second and third rule and as such the British should never ever be trusted. At no point during our 400 years relationship did the British did they gave us any reason to trust them. So I am NOT shocked when the British media decided to ignore the great work of the Jamaica people and instead focus their reporting on 2 suspected looters out of a population of 2.8 Million people. It was classic British reporting especially when it comes to Jamaica because for some reason I believe the British want Jamaica to fail because for centuries Jamaica represents uprising and a fight against British oppression.

UK SKY News Headline: Looters arrested as Hurricane Matthew skims Jamaica. To top it off they showed a picture of some men helping a stranded motorist to push is car out of the rising waters but made it look like a crime scene as people’s opinion was that the people in the picture were animals trying to rob the motorist. Of all the stories the British media could go with reporting on the dedication and hard work put in my thousands of Jamaicans across Jamaica to prepare for the hurricane, from opening and manning shelters and risking their life to help others. I am NOT shocked this is the story the British press decided to sensationalize to the global public.

Monday, July 11, 2016

Land of the Free Where All Men Are Created Equal?

Until the philosophy which hold one race superior / And another / Inferior / Is finally / And permanently / Discredited / And abandoned / -Everywhere is war - / Me say war.

That until there no longer / First class and second class citizens of any nation / Until the colour of a man's skin / Is of no more significance / than the colour of his eyes / - Me say war.
That until the basic human rights / Are equally guaranteed to all, / Without regard to race / - Dis a war.

That until that day / The dream of lasting peace, / World citizenship / Rule of international morality / Will remain in but a fleeting illusion to be pursued, / But never attained / - Now everywhere is war - / War.

And until the ignoble and unhappy regimes / that hold our brothers in Angola, / In Mozambique, / South Africa / Sub-human bondage / Have been toppled, / Utterly destroyed / - Well, everywhere is war - / Me say war.

War in the east, / War in the west, / War up north, / War down south - / War - war - / Rumours of war. / And until that day, / The African continent / Will not know peace, / We Africans will fight - we find it necessary / - And we know we shall win / As we are confident / In the victory
Of good over evil -/ Good over evil, yeah! / Good over evil - / Good over evil, yeah! / Good over evil - / Good over evil, yeah!

Wednesday, May 25, 2016

Hypocrisy and Hypocrites

PRIME Minister Andrew Holness yesterday called for cooperation between the Government and the Opposition in dealing with crime.

It would be easy for me to ask the question, why you did not offer this cooperation while in opposition and why you used crime as a political football during the election campaign.

BUT as a nation we must at some point move crime out of the political arena and view it as a threat to national security that requires all hands on deck. NO party should be boasting that it alone can solve crime because that is a false statement to make as no political party alone can solve Jamaica's crime problem. I go even further to say that the Political class alone cannot solve crime and that all good people must stand together and fight this scourge on the land.

Political parties must realize that a lot of the people they call political activist are in fact criminals and they must distance themselves from these people and bring them to justice. When you were in opposition you declared that crime exist because you were not the Government as only you and your party can solve it. You went even further to declare that the then Minister of Security and his party is incompetent to dealing with the issue of crime. I remember when you and your supporters went out of you way to ridicule the then minister when he said Jamaica needs divine intervention only for your Minister of Security to declare that he is waiting for God to strengthen his hand. It is the Hypocrisy that gets to me and what I do not like.

  • Bunting: I reaffirmed my belief in the need for Divine intervention to touch the hearts of Jamaicans to bring about a change in our culture to help win the war on crime. 
  • Robert Montague: is looking to God to help him address issues affecting the country’s security, like his predecessor Peter Bunting who had sought divine intervention. "I ask my God as I pray daily not to make my load lighter but to make my arms stronger"

It would go a long way for the Prime Minister to first acknowledge that in the past he and his party used Crime and the murder statistics as a political Football in order to win elections and for that, he and his party was very sorry BUT now wants to turn a new page on the issue and promised never to use crime again in the political arena. It would take some of the sting out of the cynicism from opposition supporters. Right now people in the opposition are thinking that he is saying this just because he is the Government and want to be seen as successful because he wants to secure his legacy why he Holness is now offering a hand of national cooperation, for selfish personal reasons only. He must come across as sincere, open and honest especially on this issue...

Crime is an affront to who we are as a people, to our National Heroes, to our nation building experience and future generations of this country and as such this partisan, Political school boy bantering must stop especially since it is costing lives and prosperity.

Monday, May 9, 2016

Comparing Jamaica to Singapore

I always have a really good laugh whenever one of our bubble-headed technocrats compares Jamaica and Singapore. The confusion and the blame game as to why Jamaica is not as successful as Singapore is never ending because at one point in our history Jamaica was economically ahead of Singapore. This really had nothing to do with Jamaica but had more to do with Singapore’s history. One just have to look at the countries violent past to see where it is coming from. Then something changed - Singapore change because the people of Singapore realized that they needed to change. ONE of the world’s great economic success stories.

Singapore owes much of its prosperity to a record of honest and pragmatic government, the legacy of Lee Kuan Yew. When one look at the legacy of Lee Kuan Yew one clearly sees why Singapore was successful and Jamaica NOT. So let me borrow a phrase from the movie Braveheart to further explain – “The Problem with Jamaica is that it is full of Jamaicans” and if Lee Kuan Yew was the leader of Jamaica, Jamaicans would kill him. The man hated decadence in all forms so there goes the nightly dancehall and he hated welfarism, so no let off culture. Lee Kuan Yew supported tough laws and punishments, making Singapore orderly, clean and disciplined, these words are like kryptonite to the average Jamaican and no matter how tough these laws are the people always voted his party back into power.

Jamaica cannot achieve what Singapore achieved simply because the Jamaican people equate indiscipline with freedom. We Jamaicans pride ourselves on our ability to be indiscipline. Singaporeans place a lot of importance on discipline, and corporal punishment is widely accepted. Caning is not only used to punish criminals but also as a disciplinary measure in schools, the military, and in the domestic scene. I remember when the American teenager Michael P. Fay was convicted and caned for vandalism, the boy did the crime and had to do the time.

The people of Singapore it seems are genetically predisposed to Hard Work and Discipline while the people of Jamaica are genetically predisposed to Merriment and Indiscipline while screaming Poverty and Suffering. 

Work Attitude, Productivity and Competitiveness 
Singaporeans have a superior attitude to work than Jamaica, we cannot compare. They are more productive and sacrifice leisure in the interest of high productivity which gives Singapore the competitive advantage. They are the world’s second most competitive economy behind Switzerland.
  • Singapore has one the lowest crime rates in the world. Only 16 people were murdered in 2011 in a country with a population of 5.1 million. In 2005, Jamaica had 1674 murders for a murder rate of 58 per 100,000 people. That year, Jamaica had the highest murder rate in the world. There were 1,682 reported murders in 2009 and 1,428 in 2010. In fact Jamaica murder rate has been over 1000 for about 2 decades.
  • Singapore have the healthiest people in the world
  • Singapore was named by the World Bank for the seventh consecutive year as the best country to do business in.
  • Singapore is one of the least corrupt countries in the world. In 2015 Singapore scored 8 while Jamaica scored 69 out of 167.
  • If they had a Merriment Index then Jamaica would be number ONE!

Discipline Population that follows the Rule of law 
Chewing gum is banned in Singapore and the importation of chewing gums into the country is illegal. Singapore is bent on maintaining its reputation of being impeccably clean, with an active campaign against littering and stringent enforcement in place. First time offenders who throw small items like cigarette butts or candy wrappers are fined $300. Those who throw out bigger items like drink cans or bottles are considered defiant and are required to appear before the court. The punishment usually involves a Corrective Work Order (CWO), where the offenders clean up a specified area while wearing a bright luminous green vest.

Not flushing the toilet is a crime  regarded as a breach of propriety in Singapore, you will be breaking the law if you do so. Expect to pay a fine if you get caught. Don’t even think of urinating in elevators, as they are equipped with Urine Detection Devices (UDD), which detect the scent of urine, setting off an alarm and closing the doors until the police arrive to arrest the offender.

Vandalism is a serious offense in Singapore, with penalties that include not only fines, but also jail, and three to eight strokes of caning. The act constitutes damages done to both public and private properties. Damaging, destroying and stealing public property, as well as drawing, painting, writing, inscribing, and marking any private property without the owner’s consent are considered illegal. Affixing placards, posters, banners, and flags is also prohibited. So no merriment posters all over the place with woman a skin out.

So it makes me laugh every time Jamaicans try to compare the Jamaican economy to Singapore economy, claiming that we should be where Singapore is with regard to economic development and growth. How so and in which cosmic reality? 

The problem is they are missing one vital factor… The people… The difference between Singapore and Jamaica is the mind-set of the people, their discipline, their attitude to work, family and life in general is completely different. The people of Singapore are not afraid to sacrifice, sacrifice and more sacrifice which defines people from that part of the world. For the most part we Jamaicans are a merriment/profile society who regards hard work and long hours as slave driving. Coupled with our let-off mentality our basic attitude to work is - “The boss not paying me enough to come out of bed, much less get in on time”…This country, any country is only as good as its people. 

Most Jamaica suffers from a lack of discipline, sometimes I believe that as a people we are genetically predispose to rejecting discipline and moral values. Jamaicans also suffers from a strong sense of entitlement, most genuinely believe that some entity owes them a living just for living. They see no problem throwing their garbage on the street because they believe it is the Governments job to pick up after them and no entity on earth can pick up after them faster than they can throw it. Jamaicans scream poverty for everything not because they are truly suffering but because they use it as an excuse to be indiscipline.

All this coupled with a high level of greed, selfishness and a lack of respect for human life tells me that things will only get worse before they get better.

In most black communities worldwide you will find Asians hard at work supplying services way into the night, nail salons stay open to do the nails of black people going out to party and enjoy themselves. All West Indians grocery stores are run by Asians, and Chinese food is bought through bullet proof glass all hours of the night and day.

So no I do not see where or how Jamaica could surpass Singapore or achieved what Singapore achieved because we are indiscipline, love handout, like to live an over the top life on poor people budget and enjoy too much nightly merriment with not enough Imagination, Innovation and hard work. It is not only the Jamaican Government that is corrupt but Jamaicans in general live a corrupt life, it is safe to say that corruption is a way of life in Jamaica.

The honor system or honesty system

While traveling in the English countryside during my vacation I came upon a food stall called the honesty box by the locals, this food stall was unmanned, various goods left in the stall with a note containing the price for each type of items, people would approach the stall, take what they wanted and pay for it, even rumbling through the money box to find correct change.

On another occasion while in Amsterdam trying to get a train we noticed that there was no turnstiles, inspection points, no booths or people on the platform inspecting our tickets, you just buy your tickets and get on the train, I asked a fellow passenger how this worked, what was I to do with my ticket, he said that someone may come around to inspect our tickets, the fine was very high for not having a ticket and that the system was based on the Honor/Honesty System… on the what???

"An honor system or honesty system is a philosophical way of running a variety of endeavors based on trust, honor, and honesty. Something that operates under the rule of the "honor system" is usually something that does not have strictly enforced rules governing its principles. In British English, it would more often be called a "trust system"."

Even when we got to our stop no one came around to inspect our tickets but that did not stop people from buying their tickets, getting on the train and settle down to read their morning news paper.

Could such a system work in Jamaica? I am not sure, I would like to think that in some nice quiet Jamaican villages that the concept of the honesty box could work, that people in some rural areas would respect and trust others. I know such a concept would not work in most major cities around the world, I cannot see the Honesty System working in New York subway system based on the amount of people jumping the turnstile, nor would the concept of the Honesty Box work in a city like London. I am not saying that people in the rural countryside of England are all honest people but one report states that 98% of the people are honest enough to make leaving your goods and money unmanned in a stall a worthwhile venture. My cousin believes that if you were to leave your goods and money unmanned in a stall in Jamaica than you would return not only find the money missing but also the goods and the stall itself would be nowhere to be found as people would laugh at you and call you “eeediot” for trusting yardman.

My Granny used to boast that she could leave the house with her front door open and feel safe in the fact that everything will be in place when she returns. That tells me that Jamaica use to exist with the same level of honesty as the people who lives in the English countryside, Amsterdam and countless other countries, so how can we get back to that level.

Could you leave your stall with your produce out for people to serve themselves and pay the requested amount in Jamaica?

Corruption in Jamaica
Many Jamaicans believe that corruption is one of the root causes of Jamaica’s high crime rate and economic stagnation. In 2014, Transparency International gave Jamaica a score of 38 out of a possible 100 on the Corruption Perception Index (CPI), one of the lowest scores in the Caribbean. According to the CPI, 85 percent of respondents in Jamaica felt that political parties were corrupt/extremely corrupt. That figure was 74 percent for parliament and 86 percent for the police force.

A key area of concern for corruption is in government procurement, on which the OCG serves as a watchdog. In 2014 after the OCG criticized the bidding process for a new power plant, the Inter-American Development Bank withdrew its financing support, effectively ending the project. A 2011 report written by the Contractor General about corruption in the Jamaican Development Infrastructure Program led to the resignation of Mike Henry, then-Minister of Transportation & Works.

Thursday, April 21, 2016

The best-laid plans of mice and Village Idiots often go awry

The 2008 Global Recession
In 2008 The International Monetary Fund stated that the drying up of global credit after the collapse of Lehman Brothers and the ensuing Global recession would lead to serious concerns for Jamaica’s economic prospect and the sustainability of the country’s 1.5 trillion debt would put pressure on the country’s economy and exchange rates.

However the then Minister of Finance the Honorable Audley Shaw dismissed the IMF concerns and declared that the Global financial crisis would not have any impact on the Jamaican economy. In fact the Minister of Finance the Honorable Audley Shaw stated that the Global recession would be opportunistic for Jamaica as he declared that, as a result the Jamaican economy will grow +2.0% to +3.0% in the next fiscal year as he moved to downplay concerns of the effects of a global economic slowdown, and in particular, the looming recession in the United States on the Jamaican Economy. According to Audley "Man-A-Yard" Shaw, the recession, if it were to occur, could present a number of opportunities for Jamaica.

The Minister of Finance the Honorable Audley Shaw also declared that oil price is going to go down if we have a recession. In fact the opposite happened oil prices shot up to record highs and in fact none of Shaw’s other grand predictions happened, Shaw also said “the Government was committed to fiscal discipline "that was going to cause Moody's and Bear Stearns and Standard and Poor's and everybody else" to upgrade rather than downgrade the country's credit rating.” …, nothing went according to Shaw’s Grand plan and vision, it went the way the IMF said it would and the was downgraded by all.

The Jamaican economy buckled under the recession that Shaw said would not affect us and shrink with GDP contraction of -0.915% in 2008, -3.046% in 2009, -1.217% in 2010, only to achieve marginal and mediocre growth of +1.5 in 2011. Then Minister of Finance the Honorable Audley Shaw had the balls of steel to turn around and blame the recession he said was not going to affect us....

Jamaica’s dependency on international events is well defined. The international markets is where we do most of our business, it is where we borrow money to finance every aspect of the Jamaican  society. The International Markets is where we hope to sell our products and where we hope to attract our tourist and earn Foreign Exchange. So how then did the Honorable Minister of Finance not see what everyone else sees? How did he not see how the Global Recession would affect us? The Minister of Finance the Honorable Audley Shaw failed to put in place measures and policies that would help to cushion the effects of the Global Recession simply because the Honorable Minister did not see how this recession would affect Jamaica and by the time reality of the recession catches up with Audley "Man-A-Yard" Shaw it was too little too late,  the Jamaican economy was already in free fall, in the middle of it like being in the middle of Hurricane Gilbert.

The Christiana Bypass To Heaven:
In 2011 The Minister of Finance the Honorable Audley Shaw was once again called to explain the high cost of the Christiana Bypass, called by many the Bypass to heaven. The Christiana Bypass is two lanes of a one kilometer road way costing a whopping $800 Million. This price we are told, did not include the cost of land already purchased or to be purchased to complete this expensive project. Jamaica has built several other roads with multiple bridges and through virgin territory for much less than $800 million-plus per kilometer so why was this small roadway so expensive? The 33-kilometre stretch of road from Mandela Highway to Sandy Bay in Clarendon cost, on average, $390 million per kilometre. To date we have not gotten any decent explanation form Mr. Shaw apart from the virgin territory explanation which is rubbish.

Audley "Man-A-Yard" Shaw Believes in the Low Exchange Rate Policy:
Everyone in Jamaica wants low exchange rate, in Jamaica it is right up there with air to breath and water to drink. Most Jamaicans care nothing about any other economic indicators because to them only the Exchange Rate means anything as it impacts their Aunt Jemima pancake breakfast, Hennessy, Weave and over the top automobiles. How you reduce the exchange rate is NOT important, what you do to reduce the exchange rate is of no interest to them and The Minister of Finance the Honorable Audley Shaw knows this, he knows how shallow the people are.

In 2010 Audley "Man-A-Yard" Shaw signed a new IMF agreement for a sum of US$1.27 Billion and then proceeded to pump it into the foreign exchange market while failing every IMF test and breaking the Agreement he negotiated, read and signed. He also failed to grow the economy and earn more foreign exchange, the assumption is that low exchange rate would lead to economic growth.

BUT the opposite is true, low Foreign Exchange Rate in Jamaica leads to an increase in over the top importation of everything, even things we already produce.
  • Jamaica Import $2 Billion worth of Brazilian Weave per year 
  • JAMAICA'S FOOD import bill continues to spiral out of control, jumping by US$100 million in 2011 to a staggering US$930 million and in 2012 was US $1,000,000,000 (Billion). 
  • Jamaica, land of wood and water, Imports $3 billion worth of lumber annually. The farm owner Dalkeith Hanna said,when he first started planting the trees, the cost was 90 cents per square foot for lumber, but in less than two decades the cost is now more than $90. He noted, however, that he still has been able to sell his locally grown lumber at a cheaper cost than the imported wood.
  • 93% of Onions consumed in Jamaica were imported in 2009.
  • Jamaica imported US$8.4-million worth of banana chips, up from US $3.7 million in 2010, so it seems Chippies and St. Mary Banana Chips is not good enough anymore.
  • Jamaica imported 70% of ginger we consume in 2010.
  • Jamaica Imported Pepper mash from the Dominican Republic although we produce the best scotch bonnet pepper, the finest-tasting in the world.
  • Jamaica importing in excess of J$8 billion worth of tomato paste each year.
  • Jamaica’s import bill for Irish potatoes decreased from US$4 million in 2008 to US$2.6 million in 2010.
  • However Jamaica imported US$15.1 million potatoes chips, wedges, and fries in 2010.
  • Jamaica supply only 15 per cent of Goat meat on the local market.
  • Jamaica imported 1.3 million kilogrammes of goat meat, valued at US$5.2 million, in 2010, the country needs approximately three million goats to attain self-sufficiency.
  • Jamaica Imports Concentrates costing J$1 billion.
  • Jamaica imports orange concentrate from the United Kingdom of Great Britain, a country that does not grow oranges.

I am all for Revaluation if the Jamaican dollar revalues because we earned more foreign exchange but not Shaw. Mr. Shaw’s policies led to the doubling of the National Debt, increasing Jamaica’s debt to GDP ratio to 145% of GDP but like I said the Jamaican people do not care how you reduce the Exchange Rates.

Year: 2007, Import: US$6.8B, Export: US$2.3B, BoT: US$-4.5B
Year: 2008, Import: US$8.1B, Export: US$2.4B, BoT: US$-5.7B
Year: 2009, Import: US$5.0B, Export: US$1.3B, BoT: US$-3.7B
Year: 2010, Import: US$5.2B, Export: US$1.3B, BoT: US$-3.9B
Year: 2011, Import: US$6.6B, Export: US$1.6B, BoT: US$-5.0B

Question: How do you think the Jamaican Government Finance the Negative Balance of Trade (BoT)?
Answer: We Borrow Money at high interest rate

On April 20th 2016, US$36,566,567.7200 pumped into the foreign exchange market and the dollar devalued to J$122.55. However after the General election the JLP Government started pumping up to US$54,952,951.3600 PER DAY into the market but that is NOT sustainable especially when we do not earn US$1 Million Per Day. So where does all this US$ money come from? We borrow it, to finance stupid, idiotic consumer goods import. If the Jamaican people want to sustain a US$54,952,951.3600 PER DAY import habit like a crack whore then the Jamaican people had better start selling something like a crack whore. Something locally made that the world wants and maybe we will earn enough US$ to feed our filthy import habit!!!

I see ATL Automotive will be selling Top Of the Line Porsche now.... ATL Automotive currently offers Audi, Volkswagen, Honda brands, BMW, and MINI. Our government has given us the best highways and byways that Jamaica has ever seen; now we’re providing the best cars to use on them! Stewart's Auto sells Land Rovers, Jaguars.

Audley Shaw Apologies

Every time Audley Shaw opens his mouth and makes some accusation he ends up apologizing or sued in court because he knows it is not important that you tell the truth. If he tells a lie 50% of the people will believe him and he would have achieved his objectives, he knows his outlandish lies travels faster than his apologies. So he lie for Effect!!!

In 2015 Audley Shaw declared that he saw an unreleased Health Ministry Audit Report stating that there was an infectious outbreak in the neonatal unit of the Cornwall Regional Hospital. On the day the audit team arrived at Cornwall Regional Hospital there was an infection outbreak in the neonatal unit," said Shaw last week, indicating that he was reading from the leaked audit report which was presented the Health Minister in August. But the audit, released on Friday, does not support Shaw’s claim.

In 2012 OPPOSITION Spokesman on Finance Audley Shaw yesterday apologised to Security Minister Peter Bunting for statements he made at two public meetings last November. The public apology forms part of an out-of-court settlement reached on Tuesday as a result of a libel suit Bunting filed against Shaw. The other aspect of the settlement is that Shaw compensates Bunting for damages as a result of the statements which have been described as false and libelous, which includes the payment of $2-million which Bunting had to take him to court again in order to try and get it.

$1.5 Million Tax Relief Package:
During 2016 Election campaigning the JLP came up with a sure why of winning a General Elections and that is to promise the Jamaican people money, any party that promise The Jamaican people money will always get the votes from the people. The JLP tried telling the truth in 2011 and it got them nowhere, you cannot tell Jamaican people that there is bitter medicine ahead and expect them to vote for you, that will not work. The only person I have experienced who can sell hardship and still win elections is Michael Manley. That is because Michael Manley does not only sell hardship for hardship sake but hardship as a mountain to climb, the struggle and the light at the end of the tunnel. He sells the great accomplishments and wonders that awaits after all this sacrifice. Michael Manley sell hope and change and Nation Building and Egalitarianism while selling hardship.

The JLP jumped up and down on the campaign trail and promised the Jamaican people tax relief, then promised to double the National Minimum wages, then they promised that Healthcare and Education will remain free of top up fees. This was the carrot on the stick that was too good for the Jamaican people to pass up. The tax relief would come in the form of an increased tax threshold where anyone making $1.5 Million or less will be exempt from paying income taxes as the Government claimed that GCT was a better performing tax and they would make more money from that tax if the Jamaican people had more money to spend.

The question was raised as to how the short fall in the budget was going to be filled and the then opposition made reference to the Gas tax that was used for the oil hedge fund. The JLP declared that they will use the funds from the $7 gas tax that was put on the backs of the Jamaica people by the PNP government in March 2015. In his submission to Parliament, the then Minister of Finance estimated that this new tax would provide $6.4 billion in revenues and outlined what was actually collected and what was actually spent and how it would be spent, securing oil for the Jamaican economy.

The Minister of Finance the Honorable Audley Shaw stated that the new JLP’s tax threshold proposal would benefit 120,000 workers who would no longer pay income tax. The opposition claims that the new tax relief plan would cost the Budget $32 Billion as they calculated the number of affected people at double that of the JLP numbers. However the JLP said the cost to the Budget would be between $12.5 billion and $13 billion. One must assume that the PNP was overstating their numbers for effect and the JLP was understating their number also for effect so I put the actual number somewhere in between.

In any case we can crunch the numbers till we are blue in the face, all the Jamaican people heard was that come April 1st 2016 their take home pay would increase by some $18,000 per month. They also heard something about doubling the minimum wage and not having to pay any fees on Education and Healthcare. That was all they needed to put their X beside the Bell.

Jamaican People Reaction to Tax Break: Money, Money, Money
And it came to past that the JLP won the General Election of 2016 and became the Government of Jamaica with report of various helpers and employees soon after going to war with employers over their new found wealth that they were promised, but there was none be had. The new Prime Minister The Honorable Andrew Holness promised that the JLP would live up to their promises and deliver on all their promises but still the deadline day for delivery of these promises came and went and still no implementation, until The Minister of Finance the Honorable Audley Shaw stepped in to offer his explanation. 

FINANCE Minister Audley Shaw accused the People’s National Party (PNP) of concealing the truth about the depletion of funds from the gas tax, which the Jamaica Labour Party was banking on to implement the proposed $1.5-million tax break. The Honorable Audley Shaw said that the money was set aside to finance the JLP tax plan. He said that the PNP Government used up funds earmarked to finance his $1.5 million tax relief programme. "We have found that the oil hedge fund was not set aside, that it is actually already accounted for in the Consolidated Fund," added Shaw..

An Article in the Gleaner announced that The Honorable Audley Shaw knew the state of the funds in question from as far back as September 29, 2015 because Parliamentary Records Shows that the then Shadow Finance Minister was told about use of Oil Money. “Hansard, the official verbatim records of Parliament, shows that during a sitting of the Lower House last September, Shaw the then opposition spokesman on finance was given a full account of what was being done with the money by then Finance Minister Dr. Peter Phillips.” So the Honorable Audley Shaw stood up before the country and did what he does best... He lies!

Let’s put aside the fact for the second that Audley Shaw is a known liar and ask the question how does a party that is in opposition and not in charge of the National Budget set aside and earmark money for an opposition plan put together by a party that was not in power and as such not the government?

Tourism Enhancement Fund
Now we have the new Government looking high and low like an hungry man scraping burn rice from the bottom of a pot trying to find money to finance their master plan which is the reason they were elected and it seems their new target is the Tourism Enhancement Fund. We were told to be scared that Cuba was now going to be open and that tourist travel to Jamaica would suffer as a result and as such the Ministry of Tourism was going to launch an all-out offensive in order to protect and safe guard Jamaica’s tourism industry from the Cubans. Now In order to launch this offensive the Tourism Enhancement fund would be the weapon of choice but if the Government uses this fund to finance their $1.5 Million tax break then what of tourism? How will we mount the charge?

The Paradox of Diehardism and Principle
If you support THIS extraction of money from the Tourism Enhancement Fund to be used for purposes other than the designated usage then surely you must have supported the last Government extracting NHT funds for budgetary support? If your motives are based on principles then surely you must have supported the last Government extracting money form NHT for budgetary support.

If you are against extracting money from the Tourism Enhancement Fund for purposes other than the designated usage as a matter of principle which have nothing to with politics then surely you must be outrage that this Government is planning on extract money from the Tourism Enhancement Fund to use for a purpose it was NOT intended for. SO where is CAPI, the Articulate Minority and all the other JLP operatives NGO who protested the last Government use of NHT funds. Where is wearing of black as a sign of protest and where is the court case taking the Government to the supreme court?

Surely you cannot be outrage only when your party is not in power but turn a blind eye when they are in power, where are your principles? Personally I do not care either way so long as the funds are not withdrawn to bail out friend and company as in the case of Outameni which I opposed on Principle and declare a corrupt move.

Free Money Give Away, Free Healthcare and Education for All
There was a time when I would have supported free public Social Services for all but that time as long gone because now I understand the real Value, Principle and the Practicality that one should only spend what one can afford to spend based on ones earnings. I understand the concept of living within ones means. The last time the JLP Government embarked on this grand social experiment they doubled the National Debt because the Jamaican Economy does not generate enough Tax Revenues to cover our Public Expenditures. The Jamaican Economy cannot afford the Education System we have. The Jamaican Economy cannot afford the Healthcare system we have and the Jamaican Economy cannot afford the public sectors we currently have. The Jamaican Government in order to finance our Public Sector must borrow large sums of money at high interest rates and now they must find money to support the Over-The-Top, Free Money, Feel Good, popular Pre-Election Promises they made. BUT I am going to give my Government the benefit of the doubt because maybe they know something this simple person struggling balance the personal budget is not aware of, maybe they have a money tree.

I would love for Public Education in Jamaica to be free at all levels. I would love it if healthcare was free for all, at all levels and I would love it if Jamaica was a country that could provide top of the line Public Services on the same level of the Scandinavian countries. The Scandinavian countries provide proper public social services to the vast majority of their citizens but they also collect Proper Taxes to finances these services. Denmark for example has a 60.4% income tax rate, Sweden 56.4% Norway 39%. Jamaica However has low tax compliance and even when entities collect taxes from the people, they are NOT turning over those taxes to the Government. 63,000 registered companies in Jamaica only approximately 3,500 are regularly paying taxes and many more companies operate Underground, Unregistered and Under the Taxman’s Radar.

If the Government is determine to embark on this tax break, double minimum wages, free education and free healthcare THEN the Government needs more taxes and should Tax Religious Institutions, Tax Nightly Merriment and Increase Taxes on Imported Consumer goods by 200%, lower the taxes on locally produce goods and become draconian when collecting taxes in order to increase tax compliance while removing all waste from the Public sector and REDUCE the Public sector work force by 30%. THEN MAYBE we could afford all these feel good, merriment loving, free money give away promises because at the rate the Government is going I would not be shocked if the Government load the contents of the Bank of Jamaica into a helicopter and deposit it from the air, onto the population like a rainy day in hurricane season.

I would rather the Government make fools of fools than try to do foolish things. Promising fools, fools gold to get elected seems to be the only way to get elected in Jamaica. I am all for the old Bait and Switch routine for votes because I fear if the Government tries to implement their plans it will be an Economic disasters because we simply cannot afford it.

How I see It

  • The Tax Break will result in reduce Government Revenue, there will be a shortfall in the Budget and I expect the Government will be forced to borrow money to maintain the same level of expenditure.
  • The Tax Break will increase spending but I anticipate that 90% of that increased spending will go towards spending on imported items. I do not see the increase in disposable Income going towards supporting local production and employment that is not how the Jamaican people roll, nightly merriment will also benefit.
  • You cannot appeal to the better nature of the Jamaican people to buy local because when it comes to spending they have no better nature. If you want to control the spending habits of Jamaicans then you must do so through legislation, make the things they want expensive and the things they need cheaper, make imports unattractive by making imports expensive and remove ALL tax waivers on imported consumer goods. The hard working tax payers should not be subsidizing Consumer Goods Imports.  
The Minister of Finance the Honorable Audley Shaw AKA Man-A-Yard is the village Idiot and will never get any respect from me.

Saturday, February 27, 2016

JLP Government 10 Point Plan and Promises to Prosperity

Plan and Promises Publish Date: Feb 04, 2016

1) We will reform government and establish a Ministry of Economic Growth and Job Creation. This ministry will ensure that investments are rapidly facilitated to avoid government obstacles, such as one agency giving approval to mine sand for the construction of a hotel and another agency placing a stop order on the activity. That doesn't make any sense.

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2) We will immediately restore the benefits at the Junior Stock Market to grow equity financing for the expansion of small to medium size businesses, as they form the stable base for job creation.

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3) We are committed in principle and practice to real reform of the tax system. This means leaving you with more of your income to save or invest. This means lower taxes and a business friendly tax system. We will again reduce transfer taxes, stamp duties, estate taxes, and as our economy grows.
  • To help our economy grow and help you take care of your families, we will get rid personal income tax for everyone who earns a gross salary of JA$1.5m or less.
So nurses, policemen and women, teachers, public sector workers, and young people starting out, the JLP will give you a break, because we know you need one. As per the JLP 118,000 Jamaicans earning $1.5 million and less per year will be exempt from paying Income Tax. The $592,800 threshold still exist for people above $1.5 Million. However 128,000 public-sector workers would be affected by this PAYE tax threshold increase and the PNP said the number affected would be 129,000 people living income tax free and would reduce the Government Revenue Stream by $32-billion but the JLP said they would make it back from GCT.

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4) Apart from divestment of loss making government entities to which we are already committed, we will list on the Jamaica Stock Exchange several state owned enterprises such as the UDC and Factories Corporation. They all have significant asset bases which can be properly packaged and placed on the stock market with realistic investment plans would unleash the economic and job creation potential latent in these assets.

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5) Jamaica’s water infrastructure is inadequate, we will fix it. We will make strategic capital investments in water. Jamaica is not short of water, this government does not know how to manage our water. There are still too many households and farms without reliable water supply. The investment in water will reduce the impact of drought on the economy, but it will also boost agriculture and housing construction. This is an example of synergy in our economic growth plan.

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6) We will reform the NHT, the Housing Agency and the Mortgage Bank to expand affordable housing construction and reduce interest rates on mortgages. We will create a special intergenerational 50 to 60 year mortgage which will make home ownership and payments easier. It is the Jamaican dream to own a home, whether you are a household helper or a young professional, and the JLP will help you make that dream come true.

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7) We will create a special council of investment ambassadors who will be tasked to specially seek out large investors from all over the world and bring them to Jamaica. Jamaica must improve its international profile as an investment destination and not merely as an emerging market to lend money. We will complete the work we started to develop Jamaica as an International Business Centre. All our foreign missions will be tasked for economic diplomacy as the main objective. Our foreign policy must support our economic priorities.

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8) Economic growth must mean jobs for our people. While we will seek investments that match the available skill sets, we are committed to improving the skills of Jamaicans to attract high value investments to sustain long term economic growth. Among other human resource development plans, we are particularly excited about our compulsory education and skills policy. All your young people who are not in a job or currently in school will have the opportunity to develop their knowledge, skills, and attitude through a National Apprenticeship Programme and a National Service Programme, where they earn stipend and gain work experience and certification.

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9) We will advance Jamaica as a digital society. An important step on this part is to digitize all government records, and business processes. This will improve the efficiency and accessibility of government. And this is just one area in which we will employ the young people we have trained under the national apprenticeship and service programmes. This is an example of our coordinated economic growth and job creation strategy.

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10) We will revitalize and rebuild our town centres and cities. There is so much value lying idle in our real estate in blighted urban areas. However, government has to lead the way with a clear, vision, policy and commitment to partnering with the private sector to get this done. We will start with the redevelopment of the Kingston waterfront and market district. And as another example of our coordinated thinking, this will be partially funded by the listing of the UDC on the stock market.

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Apart from the above 10 Point plan the JLP also promised to:

11) Double The National Minimum Wage forcing employers to pay more to their workers.

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12) Remove all subsidies from Healthcare

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13) Remove all subsidies from Education
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Holness promised also not to increase GCT

The Best Laid Plans of Mice and Men

The Plan to not collect Income taxes from people making $1.5 Million and below as well as doubling minimum wage and removing all fees from Education and Healthcare while not increasing GCT, is intended as a stimulus for increase economic activity.  The idea is that if you give the people more money to spend the multiplier effect will kick in, more spending equals more GCT tax collection and more spending on local goods should increase business activity and kick in the old economic 101 principles. That is increase spending, increases demand which causes increases in supply and leads to increase employment thus growing the economy and Bobs your uncle!

It is a very romantic outlook on life hoping that you get all your ducks in a row and the dominoes all line up and fall straight. But economics was never a perfect science, too many variables and far too many unknowns to control. Changing one part can affect a lot of others parts and not for the better, it is a balancing act and very difficult to get right especially when the behavior of Human beings are involved. Jamaicans do not react to market forces like most other people, we are in imperfect people who love to import everything we consume, so how we will react is a major unknown and 75% of what we consume is imported even if we produce it for ourselves. That is why changes are normally made in small increments with a wait and see attitude but this is aggressive, a massive change and how it will play-out is very difficult to determine.

Holness said “There are some who believe that out of that fiscal discipline will come growth” this is not something Holness believes, enough of this fiscal discipline thing, Austerity is over and Holness is going to “Showa” the people with money and by doing that Grow the economy, the only problem is the Jamaican economy has no money, what little it has was borrowed and our productivity is low.

This is not Audley Shaw's plan, the old states man does not have it with in him to put forward something so aggressive, this is a plan of youth, open, carefree optimistic youth who believes that they know everything, this is the same mentality that created OLINT and Cash-Plus Pyramid Ponzi schemes. This is a plan of desperation from a young person who is forced to go all out in order to secure his position.  It is now up to Audley Shaw to restrain youth and control that youthful exuberance so I expect delays and changes to the pre-election plan now that it has achieved its objectives, which is to get Holness and his wife elected to parliament.

On Thursday, March 3rd 2016, Andrew Holness will be everyone's Prime Minister, like it or not and the Government will be my Government regardless of Party, Jamaica's Government and as such gets the respect all Governments should get, at least from me. That does not say I will not be open, objective and vigilant because I will be and I will oppose bad policies and Support/defend good policies and I will judge you based on your delivery of pre-election promises. My opinions and my outlook in life is based on my principles and my ideology which I will never betray. I only support principles and ideology that is in league with mine and will never compromise them, country over party. But Andrew Holness will be my Prime Minister and the Government he leads will be my Government and I wish my next Government all the best in bringing the promised property and delivering solutions for the problems we face.

On the things we do not agree on or see eye to eye on, I only hope for the good of the country that you prove me wrong, if the right things happen then I am happy to be wrong, I welcome being wrong, this is not about pride or ego but about about Nation Building and the advancement of a people. Congratulation and Good luck.