As the pandemic of the past 22 months caused Jamaicans, both the government and people, locally and overseas, to consistently reflect on the country’s innate resilience, banker and financial analyst Curtis Martin says that remaining resilient to ensure greater economic growth has to be the country’s main priority in 2022, as Jamaica celebrates its 60th year of independence.
“The country should continue its programme to enhance internal and external financial resilience,” said Mr Martin, who is managing director of one of the country’s top three commercial banks, JN Bank, and a director of the Jamaica Central Security Depository.
To achieve resilience domestically, he said, as the pandemic wanes, the government must continue to generate budgetary surpluses in order to accelerate the pay down on the country’s still massive debt, and bring the debt ratio even further in line with those of investment-grade countries. Jamaica’s debt to GPD ratio is currently about 94 per cent, according to the International Monetary Fund in a mission concluding statement dated November 17, 2021, having been brought down from its apex of nearly 142 per cent. Similarly, over the course of the past decade, the fiscal deficit has also been transformed from 11 per cent of GDP in 2009 into a surplus.
In order to shore up resilience to external shocks, Mr Martin opined that: “The pandemic and the fallout of our main foreign exchange earner, tourism, indicates the importance of having very strong foreign currency reserves. Therefore, the central bank needs to continue its drive to grow non-borrowed international reserves to provide a strong buffer or cushion against any future adverse financial event.”
However, the effect of the pandemic has not been all negative. The adoption and adaption to digital modes of service and ways of interacting has created notable growth opportunities for the country, he said, that it should not let go to waste. He noted that the recent passing of the National Identification System (NIDS) legislation and subsequent plans to commence rollout of the system, along with the Data Protection Act and implementation of the Central Bank Digital Currency, will be critical to creating the supporting context to gradually transform Jamaica into a digital society.
“This will result in increased productivity for the country and also make it easier for members of the public to conduct business,” he said. “In the final analysis, increased productivity will support a buoyant economy, where inflation is easier to manage and the exchange rate far less unpredictable.”
Crime- a major barrier to success
However, to indemnify its success, Jamaica must gain control of its debilitating high murder rate, Mr Martin said.
Murders, in particular, have continued untamed, despite various interventions by governments over the decades, and have once again began an uphill journey that is no longer confined to the capital or the country’s two cities.
Figures from the Jamaica Constabulary Force show that murders last year rose to 1,463, which is more than 10 per cent above 2020’s statistics. And so far in 2022, the numbers have been rising over last year’s data. Overall there has been a 16 per cent increase in murders so far this year, when compared to the same period last year, with 112 people murdered up to January 25- 15 more than the 97 killed up that time in 2021.
Ten police divisions of 14 experienced an increase in murders in the first 15 days of the year. The Westmoreland and Kingston Central police divisions had the highest rates of increase, with a 350 and 300 per cent rise in murders up January 22, when compared to the same period last year. Both divisions have now been declared Zones of Special Operations.
“Crime and violence represents a direct extraction of the country’s gross domestic product, or in simpler terms, what we earn as a country from all the goods and services we produce. Crime is a major detractor to our tourism industry, which is our largest foreign exchange earner. It reduces economic activity, because of safety concerns both locally and internationally.”
“Therefore, we have to seize control of crime, if we are to succeed. If we don’t, we run the risk of having this same conversation in another 60 years,” he concluded.
