EX-99.D 3 d937373dex99d.htm EX-99.D EX-99.D

EXHIBIT D

Government of Jamaica

This description of the Government of Jamaica is dated as of June 1, 2015 and appears as Exhibit (D) to the Government of Jamaica’s Annual Report on Form 18-K to the US Securities and Exchange Commission for the fiscal year ended March 31, 2015.

 

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EXCHANGE RATES

The following table shows exchange rate information for the selling of US dollars for the periods indicated. The Federal Reserve Bank of New York does not report a noon buying rate for the JA dollar. The official exchange rate published by the Bank of Jamaica for US dollars on May 28, 2015 was J$116.11 per US$1.00.

Foreign Exchange Rates(1)

 

Foreign Exchange Rates(1)

Year

   Average for
Period(1)
     End of Period      Percentage
Change(2)

(End of Period)
 
     (spot weighted average ask in J$ for US$)  

2005

     62.60         64.58         4.79   

2006

     65.98         67.15         3.98   

2007

     69.16         70.62         5.17   

2008

     73.36         80.47         13.95   

2009

     88.82         89.60         11.35   

2010

     87.34         85.86         (4.17

2011

     86.08         86.60         0.86   

2012

     88.99         92.98         7.37   

2013

     100.77         106.38         14.41   

2014

     111.22         114.66         7.78   

 

Foreign Exchange Rates(1)

Month/

Year

   Average for
Period(1)
     End of Period      Percentage
Change
(End of Period)(3)
 
     (spot weighted average ask in J$ for US$)  

January 2015

     115.32         115.81         1.0   

February 2015

     115.71         115.64         (0.1

March 2015

     115.32         115.04         (0.5

April 2015

     115.17         115.65         0.5   

 

(1) The weighted average of the exchange rates for annual periods is calculated as the simple average of end of month rates.
(2) As compared to the prior year.
(3) As compared to the prior month.

 

Source: Bank of Jamaica

PRESENTATION OF CERTAIN INFORMATION

All references in the annual report on Form 18-K to “Jamaica” and the “Government” are to the Government of Jamaica, unless otherwise indicated. All references to “JA dollars” and “J$” are to Jamaica dollars, all references to “US dollars” and “US$” are to the lawful currency of the United States of America, or US, all references to “€” are to Euro all references to £ are to Great Britain Pounds. Historical amounts translated into JA dollars or US dollars have been converted at historical rates of exchange. References to annual periods (e.g., “2014”) refer to the calendar year ended December 31, and references to fiscal year or FY (e.g., “FY 2013/14” or “FY 2014/15”) refer to Jamaica’s fiscal year ended March 31. All references to “tonnes” are to metric tonnes. Jamaica publishes external economy information, such as external debt and goods and services exported, in US dollars. All international currencies, such as external debt denominated in Euro, are translated into US dollars. Domestic economy information is published by Jamaica in JA dollars. Components contained in tabular information in this annual report on Form 18-K may not add to totals due to rounding. The term “N/A” is used to identify economic or financial data that is not presented for a particular period because it is not applicable to such period and “n.a.” for economic or financial data that is not available.

Statistical information included in this report is the latest official data publicly available. Financial data provided may be subsequently revised in accordance with Jamaica’s ongoing maintenance of its economic data.

 

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LOGO

 

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SUMMARY

The following is a summary of Jamaica’s economic information for the five years ended and as at December 31, 2014. This summary does not purport to be complete and is qualified by the more detailed information appearing elsewhere in this document.

Summary of Economic Information

 

     2010     2011     2012     2013     2014  
     (in millions of US$, except where noted)  

DOMESTIC SECTOR(1)

          

Nominal GDP (J$ millions)

     1,153,981.2        1,241,072.1        1,315,754.1        1,430,423.4        1,529,438.1   

Nominal GDP(2)

     13,235.9        14,447.0        14,828.3        14,261.9        13,751.5   

Real GDP(J$ millions) at basic price(3)

     724,101.4        734,229.7        730,803.8        732,248.3        735,277   

Real GDP at basic price(2)(3)

     10,530.67        10,677.96        10,628.14        10,649.15        10,693.19   

Percent Change in Real GDP(3)

     (1.5     1.4        (0.5     0.2        0.4   

Real GDP at basic price per capita (J$/person)(3)

     269,100.3        271,953.2        269,887.9        269,731.1        270,267.4   

Real GDP (J$ millions) at market price

     827,575.2        841,649.7        836,877.1        841,576.9        n.a.   

Real GDP at market price

     12,035.49        12,240.18        12,170.77        12,239.12        n.a.   

Percent change in Real GDP at market price

     (1.5     1.7        (0.6     0.6        n.a.   

Real GDP at market price per capita (J$/person)

     307,554.6        311,740.8        309,061.1        310,003.5        n.a.   

Inflation Consumer Price Index (Percent Change)

     11.7        6.0        8.0        9.5        6.4   

Interest Rates (%)(4)

Weighted Average Loan Rate

     20.4        19.4        18.4        17.5        17.2   

Weighted Average Deposit Rate

     3.0        2.4        2.1        2.0        2.0   

Treasury Bill Yield(5)

     7.5        6.5        7.2        8.3        7.1   

Unemployment Rate (%)(6)

     12.4        12.7        13.9        15.2        13.7   

EXTERNAL SECTOR

          

Average Annual Nominal Exchange Rate (J$/US$)

     87.4        86.1        89.0        100.8        111.22   

Export of Goods

     1,330.9        1,623.7        1,728.5        1,580.5        1,453.0   

Alumina

     402.8        580.7        508.3        523.7        529.4   

Sugar

     44.2        62.2        94.1        53.2        55.9   

Imports of Goods (c.i.f)

     4,600.4        5,735.3        5,632.4        5,462.0        5,183.6   

Goods Balance

     (3,269.5     (4,111.7     (3,903.9     (3,881.5     (3,730.5

Current Account Balance

     (934.9     (1,913.8     (1,378.6     (1,319.6     (1,150.8

Gross Foreign Direct Investments

     227.7        218.2        413.3        592.9        550.8   

Net Foreign Direct Investments

     169.5        143.6        410.5        679.8        552.9   

Increase/(Decrease) in Reserves

     442.0        (205.2     (840.5     (77.8     953.3   

Net International Reserves of the Bank of Jamaica

     2,171.4        1,966.1        1,125.6        1,047.8        2,001.09   

Weeks of Coverage of Goods Imports(7)

     32.3        25.5        17.8        17.3        26.31   

PUBLIC FINANCE (J$ millions)(8)

          

Revenue and Grants

     316,041.4        322,149.8        344,677.7        396,979.5        411,715.9   

Expenditure

     388,768.0        403,122.2        399,278.9        395,241.7        418,986.4   

Fiscal Surplus (Deficit)

     (72,726.6     (80,972.4     (54,601.1     1,737.7        (7,270.8

Fiscal Surplus (Deficit) as a % of Nominal GDP

     (6.2     (6.4     (4.1     0.1        (0.5

Primary Surplus

     55,628.1        39,662.6        72,336.5        111,657.2        117,241.8   

Primary Surplus as a % of Nominal GDP

     4.6        3.1        5.5        7.8        7.5   

Loan Receipts

     212,968.9        163,520.5        144,347.1        93,527.4        168,705.9   

Amortization

     102,157.5        128,373.2        88,329.8        106,640.2        87,635.5   

Overall Surplus (Deficit)

     38,084.9        (45,825.0     1,416.2        (11,375.0     73,799.6   

Overall Public Sector Surplus (Deficit)(9)

     (78,551.4     (80,640.9     (60,135.7     7,765.2        6,500.0   

Overall Public Sector Surplus (Deficit) as a % of Nominal GDP

     (6.7     (6.4     (4.5     (0.5     0.4   

PUBLIC DEBT

          

Domestic Debt (J$ millions)(10)

     799,964.2        883,388.6        995,230.87        1,054,174.0        1,046,850.33   

Percent of Nominal GDP

     69.3        71.3        75.8        74.2        68.5   

Public Sector External Debt

     8,389.5        8,626.1        8,255.5        8,310.0        8,658.6   

Percent of Nominal GDP

     62.5        58.9        56.0        59.0        64.9   

Total Public Sector Debt (J$ millions)

     1,520,301.0        1,630,414.9        1,762,811.0        1,938,176.2        2,039,650.3   

Percent of Nominal GDP

     131.8        131.5        134.3        136.4        133.4   

External Debt Service Ratio

     11.7        17.0        15.6        15.1        19.4   

TOURISM

          

Total Visitor Arrivals

     2,831,297        3,077,233        3,306,168        3,273,677        3,503,978   

Occupancy Rate (% Hotel Rooms)

     60.5        60.5        62.3        67.9        68.1   

Visitor Expenditures(11)

     2,001.2        2,008.3        2,069.6        2,111.5        2,235.7   

 

(1) The gross domestic product series has been revised. This revision was made in order to capture the changing structure of industries in the manufacturing, financial and insurance services, business services and the miscellaneous services sectors. In addition, the base year has been changed from 1996 to 2003.
(2) Calculated using the average annual nominal exchange rate.

 

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(3) At constant 2007 prices.
(4) Loans are in domestic currency.
(5) Tenors of Treasury Bills are approximately 182 days.
(6) Includes all persons without jobs, whether actively seeking employment or not.
(7) Calculated on the basis of gross international reserves.
(8) Fiscal year data from April 1 to March 31. For example, 2014 refers to the period April 1, 2014 to March 31, 2015.
(9) Overall Public Sector comprises the central government, the Bank of Jamaica, governmental statutory bodies and authorities and government-owned companies.
(10) Does not include contingent liabilities in the form of guarantees of certain obligations of public entities.
(11) Estimate. 2014 Revised. Updated data is as at March 2015.

 

Source: Bank of Jamaica, Statistical Institute of Jamaica, Ministry of Finance and Planning and Jamaica Tourist Board

 

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JAMAICA

History

Originally settled by the Arawak Indians, Jamaica was first visited by Christopher Columbus in 1494 on his second voyage to the New World. Jamaica’s name derives from the Arawak word “Xaymaca,” which means “Land of Wood and Water.” In 1655 Admiral William Penn and General Robert Venables led a British force that conquered the island, ousting the Spaniards. Over the next 40 years, Jamaica became the stronghold of the Caribbean buccaneers who transformed Port Royal, then the island’s commercial center, into the richest city in the New World. The sugar industry, supported to a great extent by slaves transported from Africa until the abolition of slavery in 1834, formed the basis of the island’s economy. During its three centuries as a British colony, Jamaica was variously administered by a governor and a planter-controlled legislature, by British Crown Colony rule from London, England, and by limited representative government in the late 19th and early 20th centuries. The Government granted universal adult suffrage in 1944. From 1958 to 1961, Jamaica was a member of the now-defunct West Indies Federation, which encompassed all of Britain’s Caribbean colonies. Although plans for independence first appeared in the 1940s, internal self-government did not begin until 1959. On August 6, 1962, Jamaica became an independent country within the British Commonwealth.

The historical development of the island has influenced Jamaican national symbols. Jamaica’s flag, a diagonal cross of gold on a green and black background, represents the statement, “The sun shineth, the land is green and the people are strong and creative.” The national crest incorporates the original Arawak inhabitants with the legend “Out of Many, One People,” which reflects the country’s multiracial heritage. Jamaica’s reggae music enjoys international renown.

Territory and Population

Jamaica, the third largest island in the Caribbean Sea, is located 558 miles (898 kilometers) southeast of Miami, Florida, 90 miles (144.8 kilometers) south of Cuba and 100 miles (160.9 kilometers) southwest of Haiti. The island has an area of 4,411 square miles (11,420 square kilometers), and its highest point is the Blue Mountain Peak, which rises 7,402 feet (2,256 meters) above sea level. The capital city, Kingston, located on the island’s southeast coast, also serves as Jamaica’s major commercial center. The natural harbor in Kingston is the seventh largest in the world. The country’s second-largest city, Montego Bay, located on the island’s northwest coast, is Jamaica’s main center for tourism. See “The Jamaican Economy—Principal Sectors of the Economy—Tourism.”

From 2010 to 2014, Jamaica’s population grew at an annual growth rate of approximately 0.20% per year. At December 31, 2014, Jamaica’s population was estimated at 2,723,246, a 0.20% increase over the December 31, 2013 population of 2,717,862. This low rate of population growth is primarily due to declining birth rates, a trend which we believe will continue. The most recent 2011 population and housing census reported that 46% of Jamaica’s population lives in rural areas while 54% lives in urban areas. Jamaica’s official language is English, and the majority of the population speaks a dialect.

Society

Diverse religious beliefs are represented in Jamaica, although Christian denominations predominate. Other major religious groups include adherents to the Rastafari, Bahai, Islamic and Jewish faiths.

Jamaica’s educational system is based on the British system. The school system consists of a pre-primary cycle of two years, followed by a primary cycle of six years and a secondary cycle of five years. In some instances students pursue two years of additional secondary education. The Government of Jamaica has a policy designed to support the mandatory engagement of all children between the ages of 3 and 18 years in a meaningful learning process and in a structured and regulated setting. It addresses regular attendance at learning institutions for all children as well as exposure to both academic and vocational program at the secondary level. The HEART Trust/NTA is the facilitating and coordinating body for technical and vocational workforce development in Jamaica. The Trust provides access to training, development of competence, assessment and certification to working age Jamaicans. It also facilitates career development and employment services island-wide. Training is provided both

 

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in the workplace (Enterprise-based), as well as through formal Technical, Vocational and Educational Training (TVET) institutions and TVET special programs. As at March 2015 HEART TRUST/NTA directly administered training in over 28 institutions island wide and over 100 special church based and community based training institutions.

The educational system accommodates a variety of public and private schools. Post-secondary education is available to qualified candidates at community colleges, the University of Technology, University College of the Caribbean, Northern Caribbean University, International University of the Caribbean, the Jamaica campus of the University of the West Indies and several private off shore universities.

In addition to the formal school system, Jamaica has an adult literacy program, which contributed to reducing the illiteracy rate from 32.2% in 1987 to 13.0% in 2008, according to a 2008 Jamaica Survey of Living Condition Survey Literacy Module. Data provided by UNESCO Institute for Statistics estimates the 2015 adult literacy rate at 89.2 % (83.7 % Male and 94.5 % Female).

Recent macro- and micro-economic developments have generally caused the unemployment rate to decrease. In 2014, the average number of unemployed persons was 179,675, a decrease of 10.0% from 199,550 in 2013. The average unemployment rate was 13.7% in 2014, a decrease from 15.2% in 2013. See “The Jamaican Economy—Employment and Labor.” The unemployment rate in Jamaica during the past six years has fluctuated, ranging from a high of 15.2% in 2013 to a low of 12.4% in 2010 and 13.7% in 2014. Unemployment as at March 31, 2015, was 14.2%.

The following table shows selected social indicators applicable to Jamaica for the five years ended December 31, 2014:

Social Indicators

 

     2010      2011      2012      2013      2014*  

Real GDP at market price per capita(1)

   J$ 307,555       J$ 311,741       J$ 309,061       J$ 310,004         n.a   

Real GDP at basic price per capita

   J$ 269,100       J$ 271,953       J$ 269,888       J$ 269,731       J$ 270,267   

Perinatal Mortality Rate (per thousand)(2)

     27.4         30.3         30.2         29.2         29.4   

 

(1) In constant 2007 prices.
(2) Defined as deaths in government hospitals occurring anytime from 28 weeks of pregnancy until seven days after birth

Please note that the statistics for Perinatal Mortality Rate are only reflective of the public secondary and tertiary health care facilities; no inference should be made of the primary health care facilities or Jamaica as a whole. Data marked by an * should be used provisionally.

Source: Statistical Institute of Jamaica, Planning Institute of Jamaica and Ministry of Health—Planning and Evaluation Branch.

Governmental Structure and Political Parties

The Jamaica Order in Council 1962 (the Constitution) is the supreme law of Jamaica and sets forth the basic framework and legal underpinnings for governmental activity in Jamaica. The Constitution came into effect when Jamaica became an independent country on August 6, 1962, and includes provisions that safeguard the fundamental freedoms of the individual. While a simple majority of Parliament can enact amendments to the Constitution, certain amendments require ratification by a two-thirds majority in both houses of Parliament, and amendments altering fundamental rights and freedoms require the additional approval of a national referendum.

Jamaica is a parliamentary democracy based upon the British Westminster model and is a member of the British Commonwealth. The Head of State is the British Monarch, who is represented locally by the Governor-General of Jamaica. Traditionally, the British Monarch appoints the Governor-General upon the recommendation of Jamaica’s Prime Minister. The actions of the Governor-General are, in most cases, of a purely formal and ceremonial nature. General elections are constitutionally due every five years, at which time all seats in the House of Representatives will be up for election. The Constitution permits the Prime Minister to call elections at any time within or shortly beyond the five-year period, consistent with the Westminster model.

 

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National legislative power is vested in a bicameral Parliament composed of a House of Representatives and a Senate. The House of Representatives comprises 63 members elected by the people in the general elections. The Senate comprises 21 members appointed by the Governor-General, 13 of whom are appointed on the advice of the Prime Minister and eight of whom are appointed on the advice of the Leader of the Opposition. The President of the Senate is elected by its members. The members of the House of Representatives select their own chairman, known as the Speaker. The Prime Minister, usually the member most likely to command the support of the majority of the members of the House of Representatives, is appointed by the Governor-General.

In addition to the national governing bodies, local government is administered through 12 parish councils and a statutory corporation that administers the Kingston and St. Andrew (KSAC) areas and the Municipality of Portmore. The results of the last local government election, which took place in March 2012, accorded the ruling People’s National Party (PNP), 12 of the 13 parish councils and the KSAC. The PNP and Jamaica Labour Party (JLP) shared the Trelawny Council, with one elected independent candidate. The PNP won the Municipality of Portmore.

The principal policy-making body of the Government is the Cabinet, which is responsible for the general direction and control of Jamaica and whose members are collectively accountable to Parliament. The Cabinet consists of the Prime Minister and no fewer than 11 other members of the two Houses of Parliament. No fewer than two, and no more than four members must be selected from the Senate. The Governor-General appoints members of the Cabinet upon the recommendation of the Prime Minister.

The Jamaican judicial system is based on English common law and practice and consists of a Supreme Court, a Court of Appeal and local courts. Final appeals are made to the Judicial Committee of the Privy Council in the United Kingdom (UK). A number of Caribbean nations, including Jamaica, are currently discussing the establishment of a Caribbean Court of Justice to replace the Judicial Committee of the Privy Council for those nations. Jamaica has signed an agreement to establish the Caribbean Court of Justice. In April 2005, Jamaica passed the Caribbean Court of Justice (Original Jurisdiction) Act 2005. The Act provides for the implementation of the provisions of the Agreement establishing the Caribbean Court of Justice in its original jurisdiction. The Caribbean Court of Justice, in its original jurisdiction, will hear and determine matters relating to the interpretation and application of the Revised Treaty of Chaguaramas establishing the Caribbean Community and Common Market.

Two major political parties dominate Jamaica’s political system. From Jamaica’s independence on August 6, 1962, until 1972, the JLP formed the government; then the PNP assumed power in 1972. In late 1980, the JLP returned to power until February 1989, when Michael Manley led the PNP to victory and became Prime Minister. In 1992, Prime Minister Manley resigned as Prime Minister and leader of the PNP and was succeeded by Percival James (P. J.) Patterson. The PNP won the 1993 general election and Mr. Patterson was returned as Prime Minister. In 1995, a former Chairman of the JLP formed a third political party, the National Democratic Movement. In the 1997 general election, the PNP won 51.7% of the votes cast, and P. J. Patterson returned to the office of Prime Minister. In March 2006, Prime Minister Patterson resigned as Prime Minister and leader of the PNP and was succeeded by Portia Simpson-Miller.

In the September 3, 2007 general elections, the JLP won 49.98% of the votes cast, and Bruce Golding became Prime Minister. The changes in the leadership of the country had no material effect on the economy of Jamaica. On September 25, 2011, Mr. Golding announced that he would not be seeking re-election, and Andrew Holness succeeded Mr. Golding as Prime Minister and leader of the JLP on October 23, 2011.

Jamaica held its most recent general election on December 29, 2011. As a result of that election, the PNP won 53.0% of the votes cast, and Portia Simpson-Miller became Prime Minister. The Jamaican Constitution requires that a general election be held every five years, at which time all seats in the House of Representatives will be up for election. Given that the last general election was December 29, 2011, an election is to be constitutionally held by December 2016. However, the Prime Minister is constitutionally permitted to call an election at any time before this date.

 

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The following table shows the parliamentary electoral results for the past six general elections:

Parliamentary Electoral Results

 

     1989      1993      1997      2002      2007      2011(1)  
     (number of representatives)  

People’s National Party

     45         52         51         34         28         42   

Jamaica Labour Party

     15         8         9         26         32         21   

 

(1) Following a Boundaries Revision exercise conducted between April 2008 and March 2010, the number of constituencies (parliamentary seats) was increased from sixty to sixty-three.

Source: Office of the Prime Minister.

In recognition of the jubilee year of Jamaica’s independence, the Administration of Prime Minister Simpson-Miller has proposed to begin the process of detaching Jamaica from the British Monarchy and to have Jamaica become a republic with an indigenous president as its Head of State. An important agenda item for the Administration in this respect is to establish the Caribbean Court of Justice as its final appellate jurisdiction, replacing the Judicial Committee of the Privy Council. The Administration also intends to broaden and deepen Jamaican input into the regional integration movement. See “—International Relationships—Caribbean Community and Common Market (CARICOM).”

International Relationships

Jamaica maintains diplomatic relations with almost every nation in the world. Jamaica is a member of the United Nations and its affiliated institutions, including the Food and Agriculture Organization, the International Monetary Fund, the World Bank Group, the World Health Organization, the World Tourism Organization, the World Intellectual Property Organization (WIPO), the International Seabed Authority, and the United Nations Environment Program. It is also a member of several other regional and international bodies, including the World Trade Organization (WTO), the African, Caribbean and Pacific Group of States (ACP), the Association of Caribbean States (ACS), the Caribbean Community (CARICOM), the Commonwealth; the Latin American and Caribbean Economic System (SELA), the Organization of American States (OAS), and the Community of Latin American and Caribbean States (CELAC).

Jamaica is a signatory to the Cotonou Partnership Agreement and party to the CARIFORUM-EU Economic Partnership Agreement. It is also a beneficiary of the Caribbean Basin Economic Recovery Act and the Caribbean-Canada Trade Agreement (CARIBCAN). In addition, as a member of the United Nations bloc of developing countries known as the Group of 77, Jamaica is eligible for the Generalized System of Preferences. Jamaica is also a member of the Group of 15, a group of 17 states focused on cooperation among developing countries in the areas of trade, investment and technology.

Jamaica receives preferential tariff treatment on most of its products pursuant to, among others, the trade agreements described below.

WTO—Doha Development Round

Jamaica has been participating in the WTO’s Doha Development Round, aimed at further liberalizing trade at the global level, since it was launched in Doha, Qatar in 2001. These negotiations were scheduled to be concluded in 2005 but are currently at an impasse due to various unresolved issues. The Ninth WTO Ministerial Conference (MC9) was held in Bali, Indonesia from December 3–7, 2013. The Conference addressed issues under its existing mandate relating to the Doha Round of negotiations and the regular WTO work program. Among the decisions adopted that were of particular interest to Jamaica were the Bali Ministerial Decision on the WTO Agreement on Trade Facilitation, as well as those relating to the Work Programme on Small Economies and Aid for Trade. Pursuant to the mandate given in Bali, the WTO is to continue its efforts to revitalize the Doha Development Agenda negotiations through the development of a Post-Bali Work Programme. It will also continue with its regular WTO work program.

 

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Caribbean Community (CARICOM)

The Treaty of Chaguaramas (the Treaty) establishing CARICOM was signed in 1973 by four English-speaking Caribbean countries. These countries are: Barbados, Guyana, Jamaica, and Trinidad and Tobago. Other countries subsequently signed on to the Treaty as Member States, including Antigua, The Bahamas, Dominica, Grenada, Montserrat, St. Kitts Nevis Anguilla, St. Lucia, and St. Vincent. The main focus of the Treaty has been to deepen economic integration and increase trade among CARICOM Member States. In pursuing these objectives, the Treaty made provisions for, inter alia:

 

    the promotion of economic integration among CARICOM Member States, including the establishment of a common market regime and the integration of economic activities;

 

    the coordination of CARICOM Member States’ foreign policies; and

 

    the engagement of CARICOM Member States in functional cooperation activities aimed at improving the effectiveness and efficiency of certain common services, as well as the advancement of social, cultural and technological development.

The Treaty also created “Community Organs” to monitor the activities and initiatives mandated. Additionally, in fulfilling the provisions of the Treaty, CARICOM Member States established common institutions for the purposes of policy formulation and cooperation aimed at improving the provision of services such as education and health care. CARICOM Member States have also cooperated in other important areas such as labor, agriculture, transportation, communication, tourism and disaster preparedness.

Between 1997 and 2001, Member States negotiated a revision of the Treaty, based on recommendations made by the West Indian Commission in 1992, to expand the scope of the Common Market by establishing a single market and economy. Consequently, the Revised Treaty of Chaguaramas establishing the Caribbean Community including the CARICOM Single Market and Economy (CSME) was signed by the following Caribbean countries in July 2001: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago. Haiti later signed the Revised Treaty of Chaguaramas (the Revised Treaty) on July 2, 2002.

The Revised Treaty seeks to establish a common economic region among CARICOM Member States that would provide for the free movement of goods, services, people and capital, and would give CSME nationals the right to establish businesses and acquire property in any CARICOM Member State participating in the CSME. Additionally, the Revised Treaty provides for the establishment of the Single Economy, which would include the harmonization of fiscal and monetary policies and the establishment of a common currency. In January 2006, the implementation of the provisions of the CARICOM Single Market (CSM) was initiated by Jamaica, Barbados, Belize, Guyana, Suriname and Trinidad and Tobago, that is, the provisions enabling the free movement of goods, services, people and capital. Other Member States started the CSM implementation process in July 2006. The Bahamas, and Montserrat are members of the Caribbean Community but are not yet participating in the CSME. A 2009 audit conducted by the CARICOM Secretariat indicates that Jamaica is far advanced in implementing its obligations under the Revised Treaty.

It was agreed by CARICOM Heads of Government in May 2011 that CARICOM should seek to consolidate the gains of the Single Market while putting on pause certain elements of the Single Economy. In the meantime, negotiations are underway for a CARICOM Financial Services Agreement to remove all regulations, the existence of which negatively affects intra-CARICOM trade in financial services. Negotiations are also underway to complete a CARICOM Investment Code, which will help to facilitate the establishment of a Community Investment Policy and create a framework for the designation of CARICOM as a single investment location. In this context, the CARICOM Investment Code is to establish common standards of treatment for extra-CARICOM investors.

Jamaica remains committed to the mandate of the Revised Treaty of Chaguaramas.

 

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Caribbean-Canada Trade Agreement (CARIBCAN)

CARIBCAN is an agreement entered into by Canada and all CARICOM countries, except Haiti and Suriname, in 1986. This agreement establishes a program for trade, investment and industrial cooperation, and features the unilateral extension by Canada of duty-free access to the Canadian market for a range of eligible imports from beneficiary CARICOM countries. CARIBCAN’s basic objectives are to enhance the Caribbean region’s existing trade and export earnings, improve its trade and economic development prospects, promote new investment opportunities, and encourage enhanced economic integration and cooperation within the region. After more than twenty years of CARIBCAN’s existence, the Parties commenced negotiations in 2009 for a CARICOM-Canada Trade and Development Agreement, that would allow reciprocal access for Canadian companies to the Caribbean market in a range of areas, including goods as well as services and investment. A seventh round of negotiations was convened in June 2014, and both CARICOM and Canada have since exchanged proposals aimed at finalizing the agreement. The negotiations on the new reciprocal trade agreement have not yet been concluded. However, the CARIBCAN arrangement remains in force, and Canada has applied for a new WTO waiver in order to protect the Caribbean’s preferential access to its markets until 2023.

The Caribbean Basin Initiative

The Caribbean Basin Initiative (CBI), which was initially launched in 1983 with the enactment of the Caribbean Basin Economic Recovery Act (CBERA), was amended in 1990 to increase market access to the United States. The benefits under the CBERA are of indefinite duration. In 2000, the United States further expanded the CBI with the enactment of the Caribbean Basin Trade Partnership Act (CBTPA). The CBTPA provides preferential access for a number of products previously excluded from the CBI. The CBTPA will expire on September 30, 2020.

Generalized System of Preferences

Under the aegis of the United Nations Conference on Trade and Development (UNCTAD), the Generalized System of Preferences was designed to afford developing countries preferential access for a wide range of their exports to the markets of developed countries. The Generalized System of Preferences is an export-promotion tool with the objectives of increasing the export earnings of developing countries, promoting industrialization in developing countries and accelerating the rate of economic growth in developing countries.

Cotonou Partnership Agreement

In February 2000, the European Union and the African Caribbean Pacific group of countries (ACP), concluded negotiations for a new 20-year trade, industrial, financial and technical cooperation agreement. Jamaica ratified the new agreement, known as the Cotonou Partnership Agreement, in February 2001 and, following ratification by 75% of ACP Member States and all EU members, the agreement formally entered into force on April 1, 2003. The agreement was reviewed in 2005 and 2010. The trade provisions of the Cotonou Partnership Agreement have been replaced by the CARIFORUM-EU Economic Partnership Agreement, as described below.

The revision in 2005 was the first one as provided for under the Cotonou Partnership Agreement (CPA). The revised Agreement was signed in Luxembourg on June 25, 2005 and entered into force on July 1, 2008. The first revision prepared the ground for the 2007-2013 financial framework of development assistance or 10th European Development Fund (EDF).

Negotiation of the second revision of the CPA was launched on May 29, 2009 and was concluded in Brussels on March 19, 2010. The revised Agreement was signed in Burkina Faso on June 22, 2010 and is being provisionally applied from October 31, 2010. The second revision has been adapted to include current global challenges such as climate change, food security, regional integration, State fragility and aid effectiveness.

A third revision of the CPA was scheduled to take place in 2015. This would be the final review prior to the expiration of the Agreement in 2020. It is not likely, however, that this review will occur in 2015 due to delays in the process.

 

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The CARIFORUM-EU Economic Partnership Agreement

The CARIFORUM-EU Economic Partnership Agreement (EPA) was signed by Jamaica and other CARIFORUM Countries, that is, other CARICOM countries and the Dominican Republic, in October of 2008. The duration of the EPA is ongoing, and provides exporters of most CARIFORUM-originated goods with duty-free and quota-free access to the EU market. The coverage of the agreement extends to include traditional exports, such as sugar, bananas, rum and rice, which will ultimately enter the EU duty-free and quota-free.

The EU’s preferential system for bananas ended on January 1, 2006, and the sugar regime which existed under the Cotonou Partnership Agreement ended on September 30, 2009. However, under the EPA, bananas from CARIFORUM countries enter the EU quota-free and duty-free, and since October 1, 2009, CARIFORUM sugar exporters have duty-free and quota-free access to the EU market under a managed system which will last until 2015, when the conditions will be removed. The agreement also requires the EU to remove restrictions on CARIFORUM’s services exports, beginning with the liberalization of 29 sectors and sub-sectors. At the same time, the EPA requires Jamaica and other CARIFORUM countries to remove all tariffs/duties on 86.9% of the value of imports from the EU (90.2% of tariff lines) on a phased basis over a 25-year period.

The EPA establishes provisions to administer trade related issues between the parties. These trade-related issues are primarily in relation to agriculture and fisheries, sanitary and phyto-sanitary standards, customs and trade facilitation, investment facilitation, intellectual property rights, competition, electronic commerce and personal data protection. The agreement goes further to provide for parties to undertake development cooperation in a number of areas, ranging from the development of supply-side capacity, including the development of trade-related infrastructure, to the enhancement of the tourism sector and culture cooperation. The agreement is being provisionally applied by Jamaica. Jamaica has commenced both the first phase and the second phase of reductions through amendments to the Customs Act, in accordance with its obligations under the EPA.

 

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THE JAMAICAN ECONOMY

General

Jamaica operates as a mixed, free market economy with state enterprises as well as private sector businesses. Major sectors of the Jamaican economy include agriculture, mining, manufacturing, tourism, and financial and insurance services. As an open economy, Jamaica is well integrated into the global economy with intraregional trade contributing prominently to overall economic activity.

Since the early 1980s, successive governments have implemented structural reforms aimed at fostering private sector activity and increasing the role of market forces in resource allocation. During this period, a large share of the economy has been returned to private sector ownership through divestment and privatization programs in areas such as agriculture, tourism, transportation, banking, manufacturing and communications. See “—Privatization.” Deregulation of markets, the elimination of price subsidies and price controls and the reduction and removal of trade barriers have reduced or eliminated production disincentives and anti-export biases.

In the early 1990s, the reform process in Jamaica gained momentum with, among other developments, the liberalization of the foreign exchange market and the overhaul and simplification of the tax system. In addition to changes in personal income tax and corporate tax regimes, a number of indirect taxes were removed and replaced with a value-added tax. The Tax Administration Reform Project implemented in 1994 was aimed at broadening the tax base, facilitating voluntary compliance with the tax laws, improving the effectiveness of tax administration and tax collection and efforts to reduce tax evasion. See “Public Finance—Tax Reform.”

In 2009, Jamaica introduced a new strategic plan to achieve developed country status by 2030 called Vision 2030 Jamaica. The plan is based on the following seven guiding principles: transformational leadership, partnership, transparency and accountability, social cohesion, equity, sustainability, and urban and rural development. Vision 2030 Jamaica seeks to redefine the strategic direction of Jamaica by moving from dependence on lower forms of capital, such as tourism and basic agricultural commodities, to higher forms of capital, such as cultural, human, knowledge and institutional capital stocks. Jamaican business owners face challenges that primarily stem from global factors that include the price of oil, high energy prices, and, in some sectors, high commodity prices. See “—Principal Sectors of the Economy.”

During 2014/15, the Government continued on its comprehensive Economic Reform Program (ERP) which it began in FY2012/2013, while continuing to tighten fiscal policy. The ERP is expected to continue beyond FY 2015/2016. The main pillars of the ERP are:

 

    structural reforms to boost economic growth and employment;

 

    actions to improve price and non-price competitiveness;

 

    upfront fiscal adjustment, supported by extensive fiscal reforms;

 

    debt reduction, including active debt management, to place public debt on a sustainable path, while protecting financial system stability; and

 

    improved social protection programs.

The ERP includes a heavy and front-loaded reform agenda to support a prompt economic recovery, maintain social cohesion, build labor capacity and improve productivity. Accordingly, measures are being implemented to improve access to credit, reduce bureaucracy and other limiting factors in the business environment, and improve labor market flexibility. This reform agenda is focused on actions to strengthen public financial management, introduce a fiscal rule, reform the tax system, improve the business climate, move towards inflation targeting and reform of the securities dealers sector. See “The Monetary System—Legislation and Regulation” and “Public Finance—Tax Reform.” The fiscal reforms are essential for a sustained fiscal consolidation effort to promote debt reduction. Structural reforms to achieve higher and sustained growth are pivotal to long-term economic stability and increased welfare of the population.

 

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To alleviate the possible adverse impact of fiscal adjustment on the most vulnerable, the program includes a floor on social spending for the most vulnerable in the population. The Government also recognized that safeguarding the financial sector is also critical, and consequently has established a Financial Sector Support Fund to offer assistance, if needed, to financial institutions that participated in the recent debt exchange. See “The Monetary System—Legislation and Regulation.”

A key part of the ERP is a growth strategy that would focus on investment in:

 

    the consolidation of Jamaica as a logistics hub for shipment;

 

    information technology;

 

    agriculture;

 

    infrastructure development;

 

    diversification of the tourism product;

 

    sustainable energy; and

 

    the promotion of a more business-friendly environment with respect to government agency administration, workforce and access to credit for smaller to medium-sized businesses.

Some of the impact of the ERP has already been reflected in the improvement in Jamaica’s ranking in the ‘Ease of Doing Business’ report, published by the World Bank. Specifically, based on the Doing Business 2015 report, Jamaica was ranked 58th for the year 2015 relative to 85th in 2014. This progress is mainly based on improvements in access to financing, and ease of access to electricity as well as reductions in impediments to starting a business. This improvement also reflects the efforts towards implementing key structural reforms which augur well for a sustainable medium-term growth path for Jamaica.

The Memorandum of Understanding (MOU), which was submitted to the IMF on April 17, 2013, embodied the tenets of the ERP. Coupled with other measures and prior actions, the board of the IMF approved a four-year Extended Fund Facility (EFF) on May 1, 2013 for FY2013/14 through to FY2016/17. The IMF completed its eight review of Jamaica under the EFF on May 13, 2015. See “—IMF Arrangements.”

GDP Outlook

The Jamaican economy expanded by 0.4% in 2014 following an expansion of 0.2% in 2013 when compared to 2012. The increase in 2014 was mainly the result of an improvement in the external macroeconomic environment. See “—Gross Domestic Product”. Expansion in 2014 was largely driven by increased external demand reflected in the continued improvement in tourism and remittance inflows relative to 2013. Real GDP is expected to expand and strengthen over the medium term against the background of lower consumer prices, improving consumer confidence and continued improvements in Jamaica’s external competiveness.

IMF Arrangements

Standby Arrangement and Extended Fund Facility

In February 2010, the Government entered into a 27-month Standby Arrangement (SBA), with the International Monetary Fund (IMF) in the amount of 820.5 million (approximately US$1.27 billion) special drawing rights (SDR). Prior to the execution of the SBA, the Government had to take several actions, including adopting a tax policy package yielding approximately 2% of GDP; completing the Jamaica Debt Exchange (JDX); and reaching an

 

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agreement regarding the divestment of Air Jamaica, all of which the Government completed. The SBA supported the Government’s economic program aimed at restoring macroeconomic stability and creating conditions for improved growth. This program included critical steps and policy reforms to tackle fiscal and debt imbalances and other underlying vulnerabilities. The program was designed to assist the country in the establishment of fiscal and debt sustainability over the medium term. As such, the program focused on facilitating tax reform, rationalization of the public sector and reform of public financial systems. See “—Public Sector Indebtedness—The Jamaica Debt Exchange,” “—Public Finance—Tax Reform” and “—The Jamaican Economy—Privatization.”

To achieve these goals, the program focused on a three-pronged strategy of:

 

    fiscal consolidation;

 

    comprehensive debt management; and

 

    reforms to further strengthen the financial system.

As part of the SBA, the Government undertook a structural reform agenda, which included reforms to fiscal institutions, public entities, debt management, and the financial sector. As part of these reforms the Government passed the Fiscal Responsibility Framework, launched its strategic and comprehensive domestic liability management program, and implemented a variety of reforms impacting the financial system. See “—IMF Standby Agreement—Fiscal Consolidation,” “—IMF Standby Agreement—Comprehensive Debt Management,” and “—IMF Standby Agreement—Legal Reforms to Financial System.” The SBA approved by the IMF Board in February 2010 went off-track within a year, as the program’s targets for improving the government’s budget position were missed, which in turn eroded confidence, lowered economic growth, and resulted in acute balance of payments pressures. In the absence of the scheduled reviews under the SBA, no further performance targets were established to form the basis for further drawdowns. This also resulted in the Government not receiving SDR 285.7 million (US$420 million) from the IMF as well as multilateral funding of approximately US$550 million and grants of approximately $59.19 million. See “Public Sector Indebtedness—External Debt.”

On May 1, 2013, the Executive Board of the IMF approved a request by the Government for a four-year extended arrangement (Extended Fund Facility or EFF) in an amount of SDR 615.38 million (approximately US$932.3 million) based on exchange rates published by the IMF on January 31, 2013, the equivalent of 225% of the Government’s quota in the IMF. This EFF is the successor to and supersedes the SBA. The purpose of the EFF is to support the Government’s comprehensive ERP described above. The first disbursement in the amount of J$20,554.0 million (approximately US$207.2 million) was made in May 2013. Of these funds, US$117.2 million was used for balance of payment support and US$90 million was used for budgetary support. Subject to performance under the EFF, the Government may receive additional funding from multilateral partners, including the World Bank and the Inter-American Development Bank, of over $1 billion, along with the release of previously allocated amounts.

Pursuant to the terms of the EFF, its implementation and progress is monitored through the quarterly review quantitative performance criteria, indicative targets and structural benchmarks. See “—General.” The quantitative performance criteria establishes targets relating to, among other things: the primary balance of the Central Government; tax revenues; the overall balance of the public sector, the aggregate amount of Government direct debt, the aggregate amount of Government guaranteed debt; the aggregate amount of Government accumulation of domestic arrears, the aggregate amount of Government accumulation of tax refund arrears, the consolidated Government accumulation of external debt payment arrears, the amount of Government social spending, the cumulative change in the Government’s net international reserves and the cumulative change in the Government’s net domestic assets.

Progress under the Extended Fund Facility

The first review of performance criteria was completed by the end of September 2013, the Government met all required criteria, targets and benchmarks and the IMF made a second disbursement in the amount of approximately 19.97 million SDR on October 2, 2013. On December 18, 2013, the IMF Board completed the second review of

 

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Jamaica’s economic performance under the EFF arrangement, which enabled the disbursement of SDR 19.97 million (approximately US$30.8 million). On March 19, 2014 the board of the IMF approved the fourth draw-down of SDR46.0 million (approximately US$71.4 million) under the arrangement, this brought the total disbursements, as at that date, under the arrangement to SDR222.6 million (approximately US$339.9 million). The IMF completed its fifth and sixth reviews on September 24, 2014 and December 19, 2014, respectively, the completion of these reviews permitted the disbursement of SDR 45.95 million (approximately US$68.8 million) and SDR 45.95 million (approximately US$67 million), respectively. In December 2014, the IMF stated that Jamaica’s commitment to the program under the EFF has remained strong, fiscal performance was broadly on track, structural reforms were implemented on schedule and all performance targets for the end of September 2014 were met.

A mission from the IMF visited Jamaica during the period February 16-25 2015 to conduct the seventh review of Jamaica’s performance under the EFF. The IMF team concluded that the Government’s commitment to meeting the objectives of the program remained strong. There was broad consensus between the Government and IMF regarding the near-term outlook for the macroeconomic indicators. In their Staff Report, the team highlighted that risks remain high “but the authorities continue to rise to the challenges before them.” The Government’s Letter of Intent and updated MEFP (Quantitative Performance Criteria and Structural Benchmarks) was submitted to and approved by the IMF Board on March 30, 2015. This facilitated the release of US$40 million (SDR28.32 million) to Jamaica.

An eighth Staff Review of Jamaica’s performance under the EFF was conducted over the period May 4-13 2015. The IMF team concluded that the Government’s commitment to meeting the objectives of the program remained strong, evidenced in the overall implementation of policies to date and the progression of structural reforms, albeit with some minor delays. All quantitative performance criteria for the March 2015 quarter were met with the exception of the primary balance and indicative revenue targets. The primary balance target was only narrowly missed such that the surplus, expressed as a percentage of GDP remained at 7.5%. The deviation was due to lower than projected inflation and growth. Notwithstanding this deviation, the Fund team’s assessment of the program suggested that Jamaica’s economic program remained on track. The overall balance of the public sector was significantly better than target and the debt-to-GDP ratio remained on a downward trajectory. The Government requested a waiver on the primary balance criterion and on the basis of strong performance, characterized by the unprecedented passing of seven reviews without any modifications to the performance criteria, it is expected that the IMF Board will approve the eighth review under the EFF and thereby allow for the release of SDR 28.32 million.

Fiscal Responsibility Framework

As part of the ERP, Jamaica is committed to strengthening its fiscal discipline by adopting a number of programs, the main one being the Fiscal Responsibility Framework (FRF). The FRF requires the Government to adopt a number of initiatives including the following:

 

    preparing medium-term goals and explaining deviations, should there be any;

 

    more comprehensive reporting in several areas and empowering the Financial Secretary to obtain fiscal information of all public sector entities;

 

    strengthening accountability to Parliament in areas such as corporate plans and budgets of public bodies and increasing oversight of overall fiscal policy;

 

    establishing quantitative ceilings on debt stock, fiscal balance and wages within a specific time frame; and,

 

    requiring the Ministry of Finance and Planning to present to Parliament, at the time of the annual budget, a medium-term fiscal policy framework paper with plans and policies for developing the country.

The FRF is the centerpiece of a number of other initiatives aimed at achieving fiscal consolidation. These other initiatives include a medium-term expenditure framework, the establishment of a centralized treasury management system and the enhancement and consolidation of legislation governing debt management generally.

 

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Comprehensive Debt Management

On January 14, 2010, the Government of Jamaica launched its strategic and comprehensive domestic liability management program, marketed as the JDX for domestic securities only. The results of the JDX revealed a participation rate of approximately 99.2% with a 100% participation rate from financial institutions. This level of success represented an exchange of approximately J$695.6 billion in eligible bonds.

In addition to implementing the JDX, the Government has an on-going debt management strategy that includes the following:

 

    promoting the development of the domestic securities market;

 

    improving the maturity profile of the debt;

 

    increasing the fixed-rate proportion of the domestic debt stock;

 

    mitigating foreign currency and interest rate risks; and

 

    continuing to engage multilateral institutions and bilateral creditors.

In November 2012, the House of Parliament approved the Public Debt Management Act, 2012, to make provision for the better management of the public debt. See “Public Sector Indebtedness—General.”

In February 2013, the Government of Jamaica executed a second liability management program marketed as the National Debt Exchange (NDX). The NDX had a participation rate of approximately 99%, which translated to a nominal amount of J$845.5 billion tendered for exchange. See “Public Sector Indebtedness—Comprehensive Debt Management.”

Legal Reforms to Financial System

As part of the MOU with the ERP and EFF, the Government plans to implement a variety of reforms impacting the financial system. These include the following:

 

    enacting an omnibus banking law that will allow for more effective supervision of financial conglomerates, including harmonization of the prudential standards that apply to commercial banks, merchant banks and building societies;

 

    amending the Bank of Jamaica Act to provide the Bank of Jamaica with the responsibility for overall financial stability;

 

    reforming the securities dealers rules to strengthen their ability to withstand shocks going forward;

 

    continuing to strengthen the regulatory and supervisory framework of securities dealers to enhance capitalization and margin requirements; and

 

    enacting qualifications of auditors regulations, which will be promulgated after the omnibus banking law.

For further details on certain laws and regulations governing the financial sector, see “Monetary System— Legislation and Regulation.”

Energy Policy

Jamaica is actively pursuing an alternative energy policy to reduce energy costs, develop additional generating capacity and invest in renewable and alternative resources as a strategy to diversify its source of energy and decrease

 

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its reliance on crude oil. Renewable sources of energy and natural gas are more financially viable and sustainable. Additionally, alternative sources, such as natural gas, burn cleaner than crude oil. While the exact scale of investment in infrastructure is still being calculated, the Government has made the energy policy an essential component of its conscious growth agenda.

Gross Domestic Product

The Jamaican economy expanded by 0.4% in 2014 when compared to 2013, and expanded by 0.2% in 2013 when compared to 2012. The increase in 2014 was mainly the result of an improvement in the external macroeconomic environment. Industries reflecting growth in 2014 over 2013 were mining & quarrying (0.9%), construction (1.4%), hotels and restaurants (2.9%), transport, storage and communication (1.1%), finance and insurance services (0.2%), real estate, renting and business activities (0.5%) and other services (1.2%).

Sectoral Origin of Gross Domestic Product(1)

 

     2010      2011      2012      2013      2014 (5)  
     Amount      % of
Total
     Amount      % of
Total
     Amount      % of
Total
     Amount      % of
Total
     Amount      % of
Total
 
     (in millions of J$ at constant 2007 prices, except percentages)  

Agriculture, Forestry and Fishing:

     43,747         6.0         48,261         6.6         49,384         6.8         49,042         6.7         48,825         6.6   

Traditional Export Agriculture

     7,640         1.1         7,159         1.0         7,302         1.0         6,129         0.8         n.a.         n.a   

Other Agricultural Crops and Post-Harvest Crop Activities

     26,835         3.7         31,494         4.3         33,032         4.5         33,855         4.6         n.a         n.a   

Animal Farming, Forestry and Fishing

     9,273         1.3         9,609         1.3         9,051         1.2         9,059         1.2         n.a         n.a   

Construction

     53,167         7.3         53,609         7.3         51,253         7.0         52, 208         7.1         52,914         7.2   

Manufacture

     61,636         8.5         62,710         8.5         62,291         8.5         61,949         8.5         61,178         8.3   

Mining and Quarrying:

     14,969         2.1         17,823         2.4         16,273         2.2         16,716         2.3         16,867         2.3   

Bauxite and Alumina

     13,655         1.9         16,686         2.3         15,087         2.1         15,698         2.1         n.a         n.a   

Quarrying incl. Gypsum

     1,314         0.2         1,137         0.2         1,186         0.2         1,018         0.1         n.a         n.a   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Goods

  173,519      24.0      182,404      24.8      179,200      24.5      179,914      24.6      179,784      24.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Wholesale & Retail Trade; Repairs; Installation of Machinery and Equipment

  131,075      18.1      131,518      17.9      129,634      17.7      129,475      17.7      129,759      17.6   

Electricity and Water Supply

  24,165      3.3      24,227      3.3      23,705      3.2      23,242      3.2      22,972      3.1   

Finance & Insurance Services

  81,228      11.2      81,024      11.0      81,602      11.2      81,900      11.2      82,089      11.2   

Producers of Government Services

  96,345      13.3      96,830      13.2      96,667      13.2      96,430      13.2      96,242      13.1   

Hotels & Restaurants

  38,841      5.4      39,619      5.4      40,323      5.5      40,788      5.6      41,965      5.7   

Real Estate, Renting & Business Activities

  79,185      10.9      78,895      10.7      78,514      10.7      78,773      10.8      79,178      10.8   

Transport, Storage & Communication

  81,995      11.3      80,449      11.0      80,393      11.0      80,743      11.0      81,625      11.1   

Other Services

  49,664      6.9      49,858      6.8      50,466      6.9      50,559      6.9      51,162      7.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Services

  582,498      80.4      582,420      79.3      581,303      79.5      581,911      79.5      584,992      79.6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Less: Financial Intermediation Services Indirectly Measured (FISIM)

  31,915      4.4      30,594      4.2      29,700      4.1      29,576      4.0      29,498      4.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Real GDP at Basic Prices

  724,101      100.0      734,230      100.0      730,804      100.0      732,248      100.0      735,277      100.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) The Jamaican System of National Accounts has undergone a comprehensive revision. The revision included: (1) the compilation of the national accounts in line with the United Nations System of National Accounts 1993 (1993 SNA); (2) incorporation of new and revised data into the estimates; (3) revision of the national accounts classification of industries; and (4) rebasing of the constant price estimates from 2003 to 2007; (5) Data for 2014 are preliminary.

Source: Statistical Institute of Jamaica.

 

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The following table shows the rate of growth of real GDP by economic sectors at constant 2007 prices for the five years ended December 31, 2014:

Rate of Growth of Real GDP by Sector(1)

 

     2010     2011     2012     2013     2014 (5)  
     (%)  

Agriculture, Forestry and Fishing:

     0.0        10.3        2.3        (0.7     (0.4

Traditional Export Agriculture

     11.6        (6.3     2.0        (16.1        n.a   

Other Agricultural Crops and Post-Harvest Crop Activities

     (0.7     17.4        4.9        2.5        n.a   

Animal Farming, Forestry and Fishing

     (6.0     3.6        (5.8     0.1        n.a   

Construction

     (1.3     0.8        (4.4     1.9        1.4   

Manufacture

     (4.1     1.7        (0.7     (0.5     (1.2

Mining and Quarrying:

     (4.2     19.1        (8.7     2.7        0.9   

Bauxite and Alumina

     (5.7     22.2        (9.6     4.0        n.a   

Quarrying incl. Gypsum

     15.0        (13.5     4.3        (14.2     n.a   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Goods

  (2.2   5.1      (1.8   0.4      (0.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Wholesale & Retail Trade; Repairs and Installation of Machinery

  (3.8   0.3      (1.4   (0.1   0.2   

Electricity and Water Supply

  (4.3   0.3      (2.2   (2.0   (1.2

Finance & Insurance Services

  (3.4   (0.3   0.7      0.4      0.2   

Producers of Government Services

  0.3      0.5      (0.2   (0.2   (0.2

Hotels & Restaurants

  3.4      2.0      1.8      1.2      2.9   

Real Estate, Renting & Business Activities

  (1.0   (0.4   (0.5   0.3      0.5   

Transport, Storage & Communication

  (2.7   (1.9   (0.1   0.4      1.1   

Other Services

  (1.4   0.4      1.2      0.2      1.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Services

  (1.9   (0.0   (0.2   0.1      0.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: Financial Intermediation Services Indirectly Measured (FISIM)

  (12.7   (4.1   (2.9   (0.4   (0.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Real GDP at Basic Prices

  (1.5   1.4      (0.5   0.2      0.4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) The Jamaican System of National Accounts has undergone a comprehensive revision. The revision included: (1) the compilation of the national accounts in line with the United Nations System of National Accounts 1993 (1993 SNA); (2) incorporation of new and revised data into the estimates; (3) revision of the national accounts classification of industries; and (4) rebasing of the constant price estimates from 2003 to 2007; (5) Data for 2014 are preliminary.

Source: Statistical Institute of Jamaica.

The Petrocaribe Agreement

On August 23, 2005, Jamaica entered into the Petrocaribe Energy Cooperation Agreement (the Petrocaribe Agreement), with the government of the Bolivarian Republic of Venezuela, effective as at June 29, 2005. Under the arrangement, Venezuela agreed to make available to Jamaica a portion of the value of Jamaica’s purchases of oil as a concessionary loan facility, the terms of which are determined by the prevailing price per barrel of oil internationally. Currently, with the price of oil averaging US$58.82 per barrel, the amount of concessionary financing available is 40% of the value of purchases, which is to be repaid over 25 years, including a two-year grace period, at an interest rate of 1.0%. The terms of the Petrocaribe Agreement limit the concessionary flows to the purchase of a maximum of 23,500 barrels per day (23,500 Bbl/day) of crude oil, refined products and liquefied petroleum gas (LPG) or its energy equivalents, supplied directly to Jamaica for its internal consumption. Prices for products are based on prevailing rates in the international oil market and deliveries to Jamaica are subject to the commercial policies and practices of Petroleos de Venezuela S.A. (PDVSA). Jamaica has the option of providing alternative forms of payments through goods and services. The Petrocaribe Agreement may be modified or terminated by Venezuela upon 30 days’ written notice to Jamaica.

 

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In 2006, Parliament authorized the establishment of the Petrocaribe Development Fund to undertake the following activities in relation to the Petrocaribe Agreement:

 

    manage loan proceeds that flow to Jamaica;

 

    provide financing for approved projects and receive loan repayments from borrowers; and

 

    meet debt service obligations to Venezuela arising from the Agreement.

As of December 31, 2014, the loan proceeds to the Petrocaribe Development Fund totaled US$2,995,477,840.24 billion, and on March 31, 2015, the loan proceeds totaled US$2,994,061,182.55 billion.

Revitalization of Downtown Kingston

The Urban Development Corporation of Jamaica (UDC) has prepared a redevelopment plan for downtown Kingston and Port Royal. Recommendations emanating from the redevelopment plan are being used by the National Environment and Planning Agency (NEPA) to prepare the Downtown Local Area plan for the Kingston and St. Andrew Development Order. The Development Order is the primary instrument used by the Kingston and St. Andrew Corporation (KSAC) to control development.

The UDC is now implementing some of the projects from the plan including the development of the Festival Marketplace commencing with the Food Bazaar, which will combine the elements of entertainment, cuisine and other commercial activities along the Waterfront. Complementing this is the Waterfront Landscaping Project which is focussed on improving the landscape along Ocean Boulevard. The landscaping will result in improved experience for new and existing patrons to the area. These improvements will further enhance the new investment to the area. Currently, the Oceana Hotel which was recently divested by the UDC is being renovated and will provide commercial, hotel and residential services when completed. Additionally, the Victoria Pier has been leased and will be restored as a restaurant.

Other major developments to be undertaken within the redevelopment area include Grace Kennedy Limited constructing a new multi-storey car park and office complex on lands purchased from the UDC. This development will be proximal to the new offices for the Ministry of Foreign Affairs and Foreign Trade. Discussions are being held with the UDC regarding the implementation of this office building project. When the project is implemented, it will serve as an anchor for development on the eastern side of the plan area,

Discussions have progressed with the Ministry of Transport Works and Housing in having the Downtown Transportation Centre fully operationalized. This will reduce the number of buses currently occupying the Parade area which is planned as a major pedestrianized zone. One of the major attractions within the parade area will be the recently completed Simon Bolivar Cultural Centre.

The UDC, through collaboration with the KSAC, has carried out additional improvement works to the market district.

The UDC through partnership with its stakeholders (the Jamaica National Heritage Trust, Tourism Product Development Company, the Tourism Enhancement Fund and the Ministry of Tourism and Entertainment) is progressing to the implementation stage of the Port Royal Museum and Historic Walkway project. This project is geared at developing an experiential museum documenting Port Royal’s extraordinary history. In addition, the Ministry of Tourism and Entertainment, is making progress in its endeavour to create entertainment zones within downtown with the intent of utilizing lands/parking spaces owned by the UDC.

Several infrastructure investment projects continue through the plan area. The National Works Agency has initiated its Traffic Management Plan. The National Water Commission is currently undertaking the construction of

 

D-20


the new Darling Street Sewerage Pumping station which will improve the discharge of sewerage to the Soapberry Treatment Plant. The major benefit of this project to the plan area is the gradual improvement of the water quality of the Kingston Harbour, which will encourage more recreational use of this resource. The UDC is seeking to continue the partnership with these agencies along with the KSAC in carrying out streetscape improvement works along main roadways in downtown commencing with work in the East/Tower Street Corridor.

The investment opportunities are supported by the availability of certain tax incentives to encourage investment.

Principal Sectors of the Economy

Tourism

The tourism industry is the leading gross earner of foreign exchange for Jamaica and makes a significant contribution to employment. Tourism accounted for 62.0% of gross foreign exchange earnings from the productive sector in 2014, excluding remittance inflows. In 2014, the accommodation sub-sector alone employed approximately 34,000 persons. Visitor arrivals in Jamaica have increased by 39.3% in the last decade, from 2,514,559 million visitors in 2004 to 3,503,978 million visitors in 2014. Total visitors’ accommodation has also grown during the last decade from 22,765 rooms in 2004 to 26,820 rooms in 2014.

During 2014, total visitor arrivals were 3,503,978, an increase of 7.0% from 3,273,677 in 2013. Stopover arrivals totaled 2,080,181 in 2014, an increase of 3.6% from 2,008,409 in 2013, mainly due to new and expanded airlifts out of the United States, United Kingdom, Scandinavia, and Latin America, as well as the successful staging of signature calendar events. Cruise passengers totaled 1,423,797 in 2014, an increase of 12.5% from 1,265,268 in 2013, mainly due to an increase in calls to the ports of Falmouth.

For the first these months of 2015, total visitor arrivals were 672,663, an increase of 6.5% compared to the same period of 2014; stopover arrivals totaled 354,426, a 4.7% increase over the same period in 2014; and cruise passengers totaled 318,237, an increase of 8.7% compared to the same period in 2014.

In addition, Jamaica continued to secure adequate airlift out of major airport hubs allowing more visitors easy access to their destinations in Jamaica. Currently 30 airlines fly into Jamaica either through the airports in Kingston at Norman Manley International Airport or Sangster International Airport in Montego Bay.

The United States, Jamaica’s largest tourist market, accounted for 62.3% of total stopover visitors in 2014 and 63.3% in 2013. The percentage share of Jamaica’s stopover visitors from Europe increased to 20.2% in 2014 from 19.9% in 2013. Canada accounted for 8.5% of total stopover visitors in 2014, compared to 7.5% in 2013. Average hotel room occupancy was 68.1% in 2014, 67.9% in 2013, and 62.3% in 2012. Approximately 75.9% of hotel rooms in Jamaica were in the all-inclusive hotel category in 2014. In 2014, the average room occupancy rate of all-inclusive hotels was 74.7%.

Investment in visitor accommodation is growing as a number of major hotel projects reached completion, mainly along the North Coast of Jamaica from Negril to Ocho Rios. In 2008, the following properties were opened: Grand Palladium—Fiesta Resort with 1,056 rooms in Lucea, the second Iberostar property—Iberostar Suites Rosehall—with 273 rooms, and the fourth Riu property—Riu Mahoe Bay—with 681 rooms in Montego Bay. The Palmyra Resort & Spa at Rose Hall, which began construction in 2005, opened the first phase with 299 rooms in December 2009. During 2010, the Secrets Wild Orchid and Secrets St. James properties were opened in Montego Bay, each with 350 rooms. At the end of 2013, Hotel RIU Jamaica Palace opened with 232 rooms, The Royalton Whitesands operated by Blue Diamond Hotels and Resorts (previously Breeze Trelawny) re-opened with 350 rooms, Jewel Paradise Cove & Spa operated by Sagicor Jamaica Group re-opened with 225 rooms (previously Royal Decameron at Paradise Cove) and Azul Sensatori (previously Poincianna) re-opened with 135 rooms.

Current investment prospects in the tourism sector should result in an increase in number of hotel rooms and employment. There are several hotels in the process of planning expansions or constructing new properties, with projected capital investment of over J$342.8 million, which is expected to result in approximately 2,175 additional rooms. Major investors include both international and local parties, including RIU Hotels & Resorts, Blue Diamond Hotels and Resorts, Meliá Hotels International, S.A, Karisma Hotels and Sagicor Jamaica Group.

 

D-21


Hotel developments currently under way include: the Courtyard by Marriott in Kingston, under construction, it will be developed at a cost of US$23 million and is expected to be opened on August 2015; the Royalton White Sands Hotel (Phase 2), under reconstruction and rebranding of the former Starfish Trelawny Hotel, it will be developed at a cost of US$40 million, the reconstruction started on May 15, 2015; the Grand Lady Paladium Hotel (Phase II), under expansion, it will be developed at a cost of US$172.2 million, it is awaiting for finalization of approvals; the Azul Sensatori Jamaica, under reconstruction and rebranding of the former Beaches Sandy Bay / Seashore Resort Beach Bay, it will be developed at a cost of US$40 million, it is awaiting Parish Council approval; the Old Fort Bay Village, under construction of new towerhouses with full services for the hotel sector, it will be developed at a cost of US$2.5 million, construction will be finished in 2015; the Moon Palace Jamaica Grande, under construction of beach resort facility, it will be developed a cost of US$150 million, it is estimated to be completed in July 2015; the MeliaBraco Jamaica Village (Falmouth), under renovation and rebranding of beach resort to hotel, it will be developed at a cost of US$50 million, refurbishing to be opened in December 2015; and the Hospiten, under construction, it will be developed at a cost of US$26.2 million, construction is on-going. The Playa (Hyatt Ziva / Zilara), refurbishment, new construction and rebranding, was developed at a cost of US$110 million, opened in February 2015.

In September 2006, the Government and the Tavistock Group entered into a joint venture agreement for the development of the Harmony Cove Resort in Trelawny. Construction on the first phase has not begun with a total Phase 1 budget of approximately US$800 million. Phase 1 is expected to take approximately three years to complete. Full build-out of all phases of the project is expected to be completed within the next 10 years, based upon demand. At completion of all planned phases, the resort is expected to include several upscale hotels and residences totaling 5,000 units and a full range of amenities.

 

D-22


The following table shows the new or refurbished hotels that are scheduled to open by 2015.

Hotels Scheduled to Open By 2015

 

Hotel

 

Developer

 

Type

 

New

Rooms

 

Projected Capital
Investment(1)

 

Status

Courtyard by Marriot

  Carb Hospitality of Jamaica   New City/Business Hotel   130   US$23 million   Under construction—to be opened in August 2015

Royalton White Sands Hotel

  Sunwing/TUI Group   Reconstruction and rebranding of the former Starfish Trelawny Hotel   350  

US$120 million

(phase 1)

  Opened November 2013 as the Royalton. Adding 145 new suites, construction started May 15, 2015. Phase 2 projected capital investment at US$40 million.

Grand Lady Paladium Hotel (Phase II)

  Fiesta   Expansion/Integrated Resort Development/ Casino Gaming   800   US$172.2 million   Awaiting finalization of approvals

Azul Sensatori Jamaica

  Sunwing/TUI Group   Reconstruction and rebranding of the former Beaches Sandy Bay / Seashore Resort Beach Bay   135   US$9.5 million  

Opened May 2014.

 

Adding 150 rooms, projected capital investment at US$40 million. Awaiting Parish Council approval.

Playa (Hyatt Ziva/Zilara)

  Tourism & Leisure Development International (TLDI)   Mix of refurbishment & new construction, as well as major rebranding   627   US$110 million   Opened February 2015

Old Fort Bay Village

  Michael Drakulich   Construction of new townhouses with full services for the hotel sector   20   US$2.5 million   Construction on-going to be finished in 2015

Moon Palace

Jamaica Grande

  Palace Resorts Group   Construction of beach resort facility Rebranding of Jamaica Grande to Moon Palace   705   US$150 million   Construction on-going, estimated completion –July 2015

Melia Braco Jamaica Village (Falmouth)

  Melia Group   Renovation and rebranding of beach resort to hotel   225   US$50 million   Refurbishing to be opened December 2015 of which US$23 million relates to this refurbishing activity.

Hospiten

  Hospiten Group   Medical tourism hospital facility  

28 bed

hospital

facility

  US$26.2 million   Construction on-going
     

 

 

 

 

TOTAL

      2,874   US$698.0 million  

 

(1) Projections are based on the entire lifespan of the project, as opposed to year-to-date calculations.
(2) Figure excludes the bed count for Hospiten.

 

D-23


The following table shows the number of visitor arrivals for the first three month period ended March 31, 2014 and 2015:

 

     2014      2015      % Change
2015 vs. 2014
 

Total Stopover Visitors

     337,608         354,426         5.0   

Cruise Passengers

     292,893         318,237         8.7   
  

 

 

    

 

 

    

 

 

 

Total Visitors

  630,501      672,663      6.5   
  

 

 

    

 

 

    

 

 

 

Average Length of Stay (nights)

  8.7      8.6      -1.1   

 

Source: Jamaica Tourist Board.

The following table shows the number of visitor arrivals for the five years ended December 31, 2014:

Visitor Arrivals

 

     2010      2011      2012      2013      2014      % Change
2014 vs. 2013
 

Foreign Nationals

     1,768,810         1,800,280         1,832,329         1,860,935         1,929,454         3.7   

Non-resident Jamaicans

     152,868         151,472         153,756         147,474         150,727         2.2   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Stopover Visitors

  1,921,678      1,951,752      1,986,085      2,008,409      2,080,181      3.6   

Cruise Passengers

  909,619      1,125,481      1,320,083      1,265,264      1,423,797      12.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Visitors

  2,831,297      3,077,233      3,306,168      3,273,677      3,503,978      7.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Length of Stay (nights)

  9.0      8.9      8.8      8.7      8.7      0.0   

 

Source: Jamaica Tourist Board.

The following table shows the number of stopover visitors by country of origin for the five years ended December 31, 2014:

Stopover Visitors by Country of Origin

 

     2010      2011      2012      2013      2014      % Change
2014 vs. 2013
 

United States

     1,242,943         1,225,565         1,257,669         1,271,262         1,296,457         2.0   

United Kingdom and Ireland

     187,092         175,966         147,302         153,228         177,216         17.1   

Other European

     84,223         77,439         75,126         82,583         83,865         -0.7   

Canada

     325,191         378,938         403,200         399,331         419,898         5.2   

Caribbean

     58,299         66,216         64,984         58,249         59,057         1.4   

Latin America

     13,442         16,589         25,037         30,538         29,263         -4.2   

Japan

     1,950         2,027         2,092         2,177         2,022         -7.1   

Other

     8,538         9,372         10,675         11,041         12,403         12.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  1,921,678      1,951,752      1,986,085      2,008,409      2,080,181      3.6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Source: Jamaica Tourist Board.

 

D-24


The following table shows the percentage hotel room occupancy for the five years ended December 31, 2014:

Hotel Room Occupancy

 

     2010      2011      2012      2013      2014  
     (%)  

Kingston and St. Andrew

     41.8         45.2         49.8         57.5         57.1   

Montego Bay

     61.2         63.2         63.7         70.9         72.3   

Ocho Rios

     66.0         63.9         66.2         70.9         71.5   

Port Antonio

     10.0         14.1         10.1         9.7         16.3   

Mandeville

     49.8         58.7         55.2         65.3         60.0   

Negril

     61.7         58.5         61.3         64.5         63.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  60.5      60.5      62.3      67.9      68.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

Source: Jamaica Tourist Board.

The following table shows estimated visitor expenditure for the five years ended December 31, 2014:

Estimated Visitor Expenditure

 

     Stopover
US$ per
person
per day
     Cruise
US$ per
passenger
per day
     Total Visitor
Expenditure
US$ Million
     Visitor
Expenditure
% Change From
Prior Year
 

2010

     115.7         87.4         2,001.2         3.9   

2011

     115.7         87.4         2,008.3         0.4   

2012

     117.2         75.7         2,069.6         3.0   

2013

     120.1         79.3         2,112.7         2.1   

2014

     121.3         82.1         2,235.7         5.8   

 

 

Source: Jamaica Tourist Board.

In 2014, the total visitor expenditure (provisional estimate) increased by 5.8% to US$2,235.7 million from US$2,112.7 million in 2013. This increase was primarily attributable to improvement in the average daily rate charged by hotels and the increased expenditures by cruise ship passengers on attractions and shopping. The average expenditure per person per night increased to US$121.3 in 2014 from US$120.1 in 2013.

Infrastructure

Highway 2000

Since 2002, Jamaica has made progress on the Highway 2000 project, a joint public-private sector project. Once completed, this multi-lane motorway will connect the capital of Kingston in the southeast of Jamaica with the tourism centers of Montego Bay in the northwest and Ocho Rios in the center of northern Jamaica and will cover approximately 144 miles (230 kilometers). The developers, through National Road Operating and Constructing Company Limited (NROCC), are authorized by the Minister of Transport and Works via concession agreements of 35 and 50 years to levy, collect and retain tolls in connection with the project.

The project will be completed in two phases:

Phase 1

Phase 1 is made up of three separate sub-projects:

TransJamaican Highway Limited (TJH), a project company currently owned by Bouygues Travaux Publics S.A., Autoroutes du Sud de la France, International Finance Corporation and Société de Promotion et de Participation pour la Coopération Economique S.A., has completed the design, construction and financing of Phase 1A and Phase 1B of the project.

 

D-25


Phase 1A, which commenced in 2002, was completed in July 2006 at a cost of approximately US$240 million and included the construction of a four-lane tolled motorway from Mandela Highway to Sandy Bay as well as a six- lane highway connecting Kingston to Portmore. This phase also included the construction of three new toll plazas.

Phase 1B was completed in August 2011 at a cost of approximately US$104 million and involved the construction of an additional 6.5 miles (10.5 kilometers) of roadway from Sandy Bay to May Pen. The project was funded by Inter-American Development Bank the International Finance Corporation, the European Investment Bank (EIB) and Société de Promotion et de Participation pour la Coopération Economique S.A.

Phase 1C, which is designed to extend the highway from May Pen to Williamsfield, has not yet been awarded to any developer.

Phase 2

The second phase of the project (Phase 2) will include two sub-projects:

Phase 2A was awarded in 2012 to Jamaica North South Highway Company Limited, a project company that is a subsidiary of China Harbour Engineering Company Limited, under a 50-year concession. This phase involves the construction of a tolled highway of approximately 67 kilometers commencing in Caymanas and extending to Ocho Rios. This phase also includes the completion of the Mt. Rosser Bypass section of the roadway, which began in 2007. The concession includes the design, construction, financing, operation and maintenance of the toll road. The full financing for the project, which is estimated at US$600 million, is being provided by a combination of equity from the Developer and loans from China Development Bank. Construction works are now underway on all sections of the project and in accordance with the Concession Agreement, the project is slated to last for 36 months, with an expected completion date in the near future.

Section 1 of Phase 2A: Caymanas to Linstead. Work commenced on this 27.5 kilometer section in September 2013, and at the end of March 2015 the developer has been provided with access to approximately 85% of the right of way for the construction of the highway. Works on this leg are approximately 60 % complete and are slated for completion in the first quarter of 2016.

Section 2 of Phase 2A: Linstead to Moneague (Mount Rosser Bypass). The developer commenced work on this leg on February 2013 and works were completed and the roadway opened to traffic in August 2014.

Section 3 of Phase 2A: Moneague to Ocho Rios. The developer commenced work on this section on October 2013. At the end of March 2015, the developer has been provided with access to 100% of the right of way for the construction of the highway. Construction of this section approximately 70% complete and works are scheduled for completion by the first quarter of 2016.

Phase 2B, which is designed to extend the highway from Williamsfield to Montego Bay, has not yet been awarded to any developer.

Other Infrastructure

Jamaica and the Export-Import Bank of China signed a Preferential Buyer Credit Loan Agreement for the sum of US$58.1 million on February 3, 2010. The loan’s purpose was to repair and secure the degraded shoreline of the Palisadoes Peninsula in Kingston and to protect the Kingston Harbor from potential storm surges.

The project commenced in September 2010 and was completed in December 2012. During the execution of the project, the NWC requested implementation of an additional 4 kilometers of pipeline and the Government decided to implement the extra amount during the defects liability period; the pipeline installation was completed in November, 2013. Two major activities that were not part of the major works contract but are stipulated by the NEPA’s regulation are; the replanting of the mangroves and sand dune restoration and the construction of the boardwalk on the harbor side.

 

D-26


The project received cabinet approval and the contract was reviewed by the Ministry of Transport Works (MTWH). The construction of the boardwalk on the harbor side was completed during the 2013/2014 fiscal year and the remaining works were expected to commence during May 2014 and to have been completed in a period of approximately three months. As at March 31, 2015, the replanting of the mangroves and sand dune restoration did not commence. Delays in the project have been chiefly related to unconcluded procurement activities regarding the supply of materials and the dredging works.

Mangrove Rehabilitation

A contract was signed with UWI, in June 2014, to commence the replanting of mangroves; however, issues arose with respect to mobilization. The MTWH requested that UWI provide a mobilization bond.

In January 2015, an addendum to the contract with UWI providing for (1) a mobilization bond and (2) commencement of replanting prior to the end of FY 2014/2015, and requiring that NEPA be notified of any activity outside the previously approved plan, was executed.

As at March 31, 2015, the addendum to the contract for the replanting of the mangroves was agreed upon between the UWI/MTWH. The contract was subsequently mobilized and physical works commenced during April 2015 which included; cleaning up of the site locations and the replenishment of sand to these sites for the planting of the mangroves.

Nourishment site were being developed to aid in the growing of an increased volume of mangroves needed for the replanting exercise.

Sand Dunes Restoration

The sand dunes restoration and planting of mangroves was slated to commence during May 2014. As of the date hereof, the sand dune restoration had not commenced due to implementation delays, as this activity is linked to the planned dredging of the harbor programmed by the Port Authority of Jamaica (PAJ), which is the proposed source of the sand to undertake the dune restoration works. The PAJ’s currently proposed timeframe to carry out this activity is August 2015. The progress of the project is at a standstill due to unconcluded negotiations with the PAJ. The PAJ is in the process of divesting the Kingston Container Terminal (KCT). Consequent on pending divestment of the KCT, the NWA is making consideration for alternate arrangements; discussions were underway between the MTWH/NWA to undertake the implementation of this activity on a phased basis. However, as of the date hereof, no confirmation has yet been made on the way forward.

Transportation Infrastructure

Jamaica divested the Sangster International Airport in 2003 and upgrading work was completed in April 2009. In 2011, the Norman Manley International Airport improvement was completed, which included a new departure terminal; a new two-level pier fitted with jet-loading bridges; upgrades to the arrivals terminal, car park and roadway upgrades; IT systems, operations, safety and security equipment upgrades; and electrical distribution systems upgrades. See “—Privatization.” Funding for these projects came from European Investment Bank (EIB) and the Caribbean Development Bank (CDB), government funding from the Petrocaribe Development Fund, the Airport Improvement Fund (AIF) and equity and subordinated debt via the Airports Authority of Jamaica (AAJ).

In 2011, the construction of the Falmouth Cruise Ship Terminal (FCST) was completed. This Terminal was constructed through a collaborative arrangement between the Port Authority of Jamaica (PAJ) and Royal Caribbean Cruises Limited (RCCL). The commercial area was developed by RCCL on lands leased on a long term basis from the PAJ and is operated by Falmouth Jamaica Land Company Limited (FJLCL), a subsidiary of RCCL. FJLCL, on the other hand, manages a number of shops and other commercial buildings on the leased area, integrating part of the FCST.

 

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The FCST welcomed its first cruise vessel with over 3,000 passengers and more than 1,000 crew members in February 2011 and by the end of 2011 had accommodated the highest number of cruise ship visitors of any of the four cruise ship piers in Jamaica. The FCST welcomed 772,241 passengers and 187 calls in 2014. Financing for the project was secured through a government guaranteed loan of US$121.65 million, made available by HSBC plc, London and supported by the Eksport Kredit Fonden. See “Public Sector Indebtedness—External Debt.”

OPDEM National Disaster Work Program

Given the changing demands of disaster management locally and globally, the Office of Disaster Preparedness and Emergency Management (ODPEM) is integrating a comprehensive disaster risk-management system in the tourism, agriculture and education sectors and has created a response/recovery system for a greater awareness of the impact of disasters and possible areas for reducing vulnerability and risk. ODPEM has also spearheaded and collaborated with NGOs and other agencies of government to enhance community response mechanisms through its Building Disaster Resilient Communities Programme.

Other Tourism Initiatives

Potential future negative economic and other conditions in the United States and other countries may have an adverse effect on Jamaican tourism. Other factors that may affect the tourist industry include the availability of direct flights to and from the country, potential visitors’ perceptions of Jamaica’s crime rate, travel advisories issued by foreign authorities and development in other competing tourist destinations, including Mexico, the Dominican Republic, Florida, Cuba and other Caribbean destinations.

Jamaica has a Master Plan for Sustainable Tourism (the Master Plan), which it adopted in 1998. The plan includes:

 

    facilitating growth in selected areas;

 

    enhancing the visitor experience through development of products from Jamaica’s culture;

 

    creating heritage and diversified natural habitats; and

 

    developing a model to foster more community involvement in the tourism sector.

Jamaica and the relevant members of the tourism sector have agreed upon the details of the Master Plan and its implementation. Jamaica believes that the implementation of the Master Plan will ensure Jamaica’s competitive position through product diversification and improvement, lead to the adoption of sound environmental practices and create opportunities to allow more Jamaicans to participate directly in the tourism sector. The implementation of the Master Plan will continue on an ongoing basis.

In December 2004, the Tourism Enhancement Act, 2004 was passed. This act, as amended on August 2011, provides for a Tourism Enhancement Fee (TEF) of US$20.00 and US$2.00 to be paid by incoming airlines and cruise ship passengers, respectively. Funds from the TEF are to be placed in a dedicated fund to be used solely for implementing the recommendations emanating from the Master Plan.

The tourism industry’s commitment to sound environmental practices was evidenced in 1998 by the selection of Jamaica as the pilot destination for the launch of the Green Globe Hotel Certification Program. The project was executed by the Environmental Audits for Sustainable Tourism initiative funded through the United States Agency for International Development, in collaboration with the Jamaica Hotels and Tourist Association. Through this program, environmental audits were conducted for twenty hotels and one tourism attraction. Four Jamaican hotels became the first four in the world to attain Green Globe Certification.

Several tourism entities have implemented environment management systems (EMS) and approximately six entities have been certified as Green Global in Jamaica. Many of these Green Globe certified companies are part of the Sandals Resorts and SuperClubs chains. An effective environmental management system improves operational efficiency and cuts waste. It not only improves the organization’s environmental performance, but also saves money. Participating entities often reduce operating costs, which has led to increased profitability. Programs such as the Green Globe certification scheme are a useful way for companies to effectively demonstrate their corporate social responsibilities.

 

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Mining and Quarrying

The mining and quarrying sector of the Jamaican economy, dominated by the bauxite and alumina industries, is the country’s largest export sector.

Bauxite production increased by 2.6% in 2014 to 9,676,697 tonnes while the export of bauxite increased by 0.3% to 9,597,408 tonnes when compared to 2013. Both increases were within the range of normal operational fluctuations. Bauxite prices are negotiated based on demand as well as are referenced to price levels in other bauxite exporting countries.

In 2014, the world aluminum industry continued to experience a recovery in demand and prices when compared to 2013. In 2014, alumina production declined by 0.2% to 1,850,960 tonnes and exports of alumina declined by 4.1% to 1,823,485 tonnes in 2014 when compared to 2013.

Total gross earnings in the sector in 2014 rose to US$672.3 million, compared to US$657.3 million in 2013. Earnings from crude bauxite exports declined by 2.7% to US$124.5 million in 2014 from US$128.0 million in 2013, primarily due to the marginally weaker bauxite prices. Earning from alumina exports increased by 3.5% to US$547.8 million, as compared to US$529.3 million in 2013.

In the first three months of 2015, alumina production in Jamaica rose by 0.2%, to 476,839 tonnes, as compared to 475,671 tonnes in the first three months of 2014. Crude bauxite production totaled 1,254,989 tonnes in the first three months of 2015, representing an increase of 8.2% compared to 1,159,791 tonnes in the same period of 2014. In the first three months of 2015, alumina exports declined by 2.3% to 487,367 tonnes, as compared to 498,736 tonnes in the first three months of 2014. In the first three months of 2015, crude bauxite exports totaled 1,238,883 tonnes, representing an increase of 8.3% compared to 1,143,414 tonnes in the same period of 2014.

The global price of aluminum increased during the 3-month period ended March 31, 2015, to an average of US$1,799.8 per tonne, which was 5.4% higher than the comparable period of 2014. This increase was largely consistent with the 5.9% growth in aluminum consumption emanating mainly from China during the period.

In the first three months of 2015, Caribbean-sourced spot-alumina average prices increased by 8.9% to US$315.3 per tonne compared to US$289.5 for the same period in 2014. Alumina prices over the year 2014 have strengthened as a result of the ongoing impact caused by the new pricing mechanisms introduced by the major producers such as UC Rusal and Alcoa Inc. in late 2010. The traditional indexing of alumina to aluminum prices was replaced in favor of linking them to the main driving factors affecting alumina production costs such as the cost of bauxite and energy.

Jamaica believes that it has mineable bauxite reserves sufficient to last approximately fifty years under current mining practices and market demand expectations. This estimate of reserves is based on a range of technological and economic factors, and is subject to revision from time to time. The cost of exploiting mineable reserves can vary significantly depending on such factors as the location and mineralogical character of the reserves and technological progress in the industry.

The mining and quarrying sector will require a significant amount of capital investment in the near future as it carries out plans to transform its energy base away from oil and into natural gas and coal in an effort to reduce overall costs and strengthen global competitiveness. Jamalco’s coal solution project with an estimated cost of approximately US$500 million is scheduled to be completed by 2018Q4.

The Government of Jamaica currently wholly owns Clarendon Aluminum Production (CAP), which is in the business of producing and selling metal-grade alumina and holds a 45% undivided interest as a co-tenant in common in the assets of Jamalco (the Jamalco Co-tenancy Assets), a joint venture with Noble Resources Ltd. (the Noble Group), an indirect subsidiary of Alcoa Inc. The business of the joint venture consists of an integrated alumina production and export network composed of bauxite mining operations, and alumina refinery, a power plant, a rail transport system and a port with docking and loading facilities.

 

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On June 17, 2013, CAP and the Noble Group entered into an alumina sales agreement (the Alumina Sales Agreement), pursuant to which CAP agreed to supply, sell and deliver not less than 3,375,000, and up to 6,075,000 tonnes, of alumina to the Noble Group over a twelve-year period. In consideration for the alumina delivered pursuant to the Alumina Sales Agreement, the Noble Group and CAP entered into a prepayment facility agreement on June 17, 2013, pursuant to which the Noble Group will make available a US$120,000,000 secured prepayment facility (the Prepayment Facility) to CAP. A condition subsequent to this facility was the successful completion of a consent solicitation and an exchange offer of notes issued by CAP and guaranteed by Jamaica for notes issued by Jamaica. This exchange offer was completed successfully in September 2013. See “Public Sector Indebtedness—External Debt.” Additionally, the Noble Group has a security interest over CAP’s 45% membership interest in the Jamalco joint venture. All funds disbursed under the facility must be repaid in full by June 30, 2025. Until all funds disbursed under the Prepayment Facility are repaid, CAP grants the Noble Group an option to purchase at market value all or part of CAP’s interest in Jamalco, as well as the right to appoint a Noble Group representative to the executive committee of Jamalco. In October 2014, the Noble Group acquired a 55% undivided interest of Alcoa Minerals of Jamaica in Jamalco.

At this point in time, the Government has resolved not to provide further financial support to CAP.

In September 2011, UC Rusal acquired the remaining 35% stake in Alumina Partners of Jamaica (Alpart) from Norsk Hydro ASA for US$46 million and the refinery is now wholly owned by UC Rusal. This has extended the company’s reserve base as it seeks to be self-sufficient in raw materials. As such, UC Rusal has resumed production as at March 2015 at the complex, which has been closed since 2009 but has not resume shipping.

Currently, the Government has significant ownership interest in Jamalco and Noranda Jamaica Bauxite Partners, alumina and bauxite producers respectively. The other significant alumina producers (Windalco-Ewarton, Windalco-Kirkvine and Alpart) are privately owned.

The following table shows the production, exports, prices and earnings of the bauxite and alumina sector for the five years ended December 31, 2014:

Bauxite and Alumina Sector

 

     2010      2011      2012(1)      2013      2014  

Bauxite

              

Production (tonnes)

     8,539,853         10,188,913         9,289,040         9,435,214         9,676,697   

Exports (tonnes)

     4,303,442         5,143,463         4,759,647         4,707,375         4,812,541   

Prices (US$ per tonne)(2)

     28.10         28.65         27.62         27.20         28.88   

Gross Earnings (US$ million)

     120,945         147,343         131,440         128,037         124,548   

Alumina

              

Production (tonnes)

     1,590,658         1,959,928         1,720,453         1,854,910         1,850,960   

Exports (tonnes) (1)

     1,575,312         1,959,238         1,753,505         1,901,753         1,823,485   

Prices (US$ per tonne)(2)

     256.92         298.78         292.88         278.30         300.39   

Gross Earnings (US$ million)(3)

     404,731         585,377         513,565         529,254         547,756   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Gross Earnings (US$ million)

  525,676      732,721      645,005      657,291      672,305   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) The term exports is equivalent to sales (Included in sales is hydrate).
(2) Average price received.
(3) For the calculation of the Earnings line item in the table above, the unit price is multiplied by the volume of exports, be it bauxite or alumina. Resulting in gross bauxite earnings and gross alumina earnings figures, these are then totaled to give total gross earnings.

Source: Economics Division, JBI

 

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Manufacturing

Real GDP for the manufacturing sector declined by 1.2% in 2014, following a decline of 0.5% in 2013. The decrease in real GDP in 2014 was primarily due to the declines in the other manufacturing sub-industry. Contributing to this decline were lower output levels in petroleum refining and chemicals & chemical products. The food, beverages and tobacco sub-industry however increased by 0.7%. The sector’s performance accounted for 8.3% of Jamaica’s GDP in 2014.

Vision 2030 Jamaica, the country’s strategic plan, includes a policy framework for the manufacturing sector. This framework focuses on transitioning to higher levels of productivity and value-added production using efficient and clean technologies and environmentally sustainable processes, as part of an enabling regulatory environment. The fundamental goal for the manufacturing industry is to achieve levels of productivity that will enable the manufacturing sector to compete successfully in domestic and export markets.

Agriculture, Forestry and Fishing

Real GDP for the agriculture, forestry and fishing sector declined by 0.4% and this sector accounted for 6.6% of GDP in 2014. The overall decline in the industry in 2014 was primarily due to drought conditions in the second half of the year which detracted from the gains of the first six months. The sector grew by 17.2% in the first half of the year but declined by 17.2% in the latter half. During 2014, the Government employed a number of strategies to foster growth in the industry. These included Government programs that offered farmers support in the areas of marketing, irrigation and extension services, aimed at improving efficiency in the industry. This involved the expansion of the Agro Parks concept, which seeks to combine public and private partnership to develop productive and marketing infrastructure to improve productivity, quality and competitiveness.

The Agricultural Development Strategy, which began in 2006 and was aimed at transforming the agricultural sector by the year 2020 with the main focus being an increase in productivity, was subsumed under the Agriculture Sector Plan under Vision 2030 Jamaica. That Agriculture Sector Plan was finalized in 2009 with a strategic framework that builds on Jamaica’s Agricultural Development Strategy. The Agriculture Sector Plan for Jamaica is one of the strategic priority areas of the Vision 2030 Jamaica—National Development Plan.

Since 1997, Jamaica has undertaken several initiatives to improve productivity and product quality while lowering production costs in the sugar and banana industries. In November 1997, Jamaica commenced a program to provide support to the local sugar industry following decades of financial losses in the industry. The critical points of the strategy are:

 

    promotion of a sustainable private-sector led sugar cane industry;

 

    promotion of a diversified industry having as its major outputs raw sugar, molasses, ethanol and bagasse, a by-product used in the production of electricity;

 

    strengthening of the economy and social infrastructure of sugar-dependent areas; and

 

    divestment of the publicly owned sugar estates, which annually generate over 70% of sugar production.

With respect to the banana industry, Jamaica participates in two externally supported projects that began in 1996: the United Kingdom/Northern Ireland/Jamaica Government project, aimed at reducing rejection due to peel scarring, and a European Union project, aimed at improving the competitiveness of the banana industry. Effective January 1, 2006, the European Union adopted a new “tariff-only” regime for bananas from countries that enjoy most favored nation status. The new regime also retains a duty-free annual quota for bananas originating in the African, Caribbean and Pacific Group of States (ACP) so there has been no effect yet on Jamaica’s exports of bananas to the European Union. See “Jamaica—International Relationships—Cotonou Partnership Agreement.” Companies in the banana industry in Jamaica are also making efforts to increase competitiveness by diversifying and improving productivity. New products developed include banana-based drinks, banana flour and cereal products. Efforts to improve productivity include eliminating redundant labor and reducing real labor costs through lower wage settlements. See “—Employment and Labor.”

 

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The effects of Hurricane Dean which occurred in August 2007 are still affecting banana exports, since it destroyed approximately 85.0% of the then-existing crop, leading to a cessation of banana exports. Banana exports resumed in August 2008 but were again halted by Tropical Storm Gustav, which destroyed approximately 80.0% of the then-existing crop. Banana exports were further affected by damage caused by Hurricane Sandy in 2012. These weather-related shocks led Jamaica’s largest exporter (Jamaica Producers), which accounted for 80% of banana exports, to make the decision to cease exports from Jamaica. However, the demand for Jamaican banana in the United Kingdom and Diaspora remains strong. A production expansion program was therefore developed by the Ministry of Agriculture to satisfy the demand for both local and export markets.

The quantity of bananas produced in Jamaica was estimated at 51,581 tonnes in 2014 compared to 37,211 tonnes in 2013. In 2014, a total of 199.2 tonnes of the fruit valued at US$179,217 was exported compared with US$61,703 in 2013. The significant increase in exports may be attributed to the Ministry of Agriculture Banana Export Expansion Programme (BEEP) developed in 2014. This program seeks to facilitate greater production to meet the demands of the export markets. The program also seeks to create proper market linkages by engaging all stakeholders.

The Government divested the remaining three publicly owned sugar factories in 2010 and continued the implementation in 2013 of the Jamaica Country Strategy for the “Adaptation of the Sugar Industry: 2006-2015.” The key objective of this policy is the development of a sustainable private-sector led sugar cane industry by 2015. In support of the implementation of the Sugar Adaptation Strategy, the European Union agreed to provide financial assistance to the Government over the 2006 to 2013 period, under the Accompanying Measures for Sugar Protocol Countries. In 2009, the European Union disbursed €6.1 million to the Government and the amounts disbursed in 2010 and 2011 were €11.6 million and €8.1 million respectively. While, there was no disbursement in 2012, disbursements in 2013 totaled €24.5 million.

The Government is committed to partnering with the private sector for the establishment of nine Agro Parks to stabilize the agricultural supply chain, deepen inter-industry links, increase competitive import substitution and activate unutilized rural land and labor. The primary objective of this project, which began in 2012, is to facilitate the expansion of the productive capacity of the agricultural sector. This is to be achieved through the building of infrastructure to support investments in the production of selected crops directed towards import substitution and replacement as well as the provision of raw materials for agro-processing and non-traditional exports. The parks, funded partly by the European Union in the amount of J$285 million, are to be complemented by improved inputs, including irrigation, transport infrastructure and technical services. A total of nine Agro Parks had been established at the end of 2014, with agricultural production of a wide range of domestic crops, including vegetables, condiments, fruits and tubers. They are located at Plantain Garden River, St. Thomas; Yallahs, St. Thomas; Amity Hall, St. Catherine; Hill Run, St. Catherine; Ebony Park, Clarendon, New Forest/Duff House; St. Elizabeth/Manchester; Meylersfield, Westmoreland; and Sweet River Multispecies Abattoir, Westmoreland.

 

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The following table shows the production of selected agricultural products for the five years ended December 31, 2014:

Production of Selected Agriculture Products

 

     2010      2011      2012      2013      2014  
     (in tonnes)  

Sugar cane

     1,390,084         1,518,339         1,475,225         1,402,564         1,779,258   

Yams

     136,785         134,619         145,059         138,834         135,303   

Bananas

     53,649         46,660         47,473         37,211         51,581   

Potatoes

     45,734         57,424         57,561         61,645         58,988   

Citrus

     117,440         106,992         97,072         83,758         71,194   

Coffee

     9,121         8,099         6,687         6,984         5,298   

Cocoa

     1,368         498         1,393         997         1,154   

 

 

Source: Planning Institute of Jamaica.

Construction

Real GDP for the construction sector increased by 1.4% in 2014, influenced by the performance in building construction due to increased activities in residential construction projects and an expansion in hotels. Civil engineering benefited from continued work on the North-South leg of Highway 2000.

Transportation, storage and communication

Real GDP of the transport, storage and communication sector increased by 1.1% in 2014, primarily due to improved performances in all sub-industries. The post and telecommunications sub-industry was positively impacted by competition within the telecommunications market. The supporting and auxiliary transport activities sub-industry benefitted from increased volume of cargo and air passenger movement. Increased activities at the ports of Kingston and Montego Bay resulted in a 2.3% increase in the overall volume of cargo handled at the ports. Producers of government services fell by 0.2%, primarily as a result of measures undertaken by government to reduce its wage bill as a percentage of GDP.

Privatization

Jamaica’s privatization program commenced in the early 1980s with the divestment of public services. Larger sales have included interests in the hotel sector, the National Commercial Bank, Telecommunications of Jamaica Limited, Air Jamaica Limited, Petrojam-Belize and the Caribbean Cement Company Limited. Jamaica has continued its program of privatization by divesting 80% of its interest in the power and energy company, Jamaica Public Service Company Limited, in 2001.

The Government granted a concession for the management of the transshipment terminal of the Kingston seaport to APM Terminals and Amalgamated Stevedoring Co. Ltd., a consortium of foreign and local entities, in October 2001. The consortium assumed management of the terminal in February 2002. The contract expired in February 2009 and the terminal is now being managed by the Port Authority of Jamaica. Given the plans to further expand the facility, the Port Authority of Jamaica in April 2015, executed a concession agreement with Kingston Freeport Terminal Limited (KFTL), a special purpose vehicle formed to accept the Kingston Container Terminal (KCT). The KFTL is jointly owned by members of the consortium, Terminal Link (TL) and CMA CGM with equity interests of 40% and 60% respectively. The Agreement will give KFTL a 30-year concession term with the right to finance, expand, operate, maintain and transfer the facility at the end of the agreement. Financial close of the transaction is expected within 6-8 months of signing the Agreement.

In connection with the privatization of Air Jamaica Limited in 1994, the Government retained ownership for its own account of 25.0% of the airline’s ordinary shares and ownership of an additional 5.0% of its ordinary shares, which the Government was contractually obligated to contribute to an employee share ownership plan. During the period of privatization, the Government provided US$169.0 million in loans and assistance to the airline. In December 2004, Jamaica purchased the remaining 75% of the ordinary shares for US$1.00 and converted approximately US$395 million, the total liabilities of Air Jamaica owed to the Government, into ordinary shares.

 

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In the fiscal year 2007/2008, the decision was made to re-privatize the national carrier Air Jamaica Limited. To this end, the Government sought a divestment that achieved certain strategic objectives. On May 1, 2010, the Government entered into an agreement with Caribbean Airlines pursuant to which Caribbean Airlines obtained the routes of Air Jamaica and agreed to provide sustainable airlift to Jamaica. In return the Government acquired a 16% equity interest in Caribbean Airlines valued at US$28.5 million. The Government remains the owner of the remaining assets and liabilities of Air Jamaica. Under an agreement, Caribbean Airlines will lease some of these assets from Air Jamaica. The Government is liquidating the remaining assets of Air Jamaica as appropriate and will continue to service the liabilities.

Jamaica re-privatized the government-owned assets of the sugar cane industry in August 2011. A “Sugar Cane Negotiating Team” was appointed to oversee the divestment process by the Ministry of Agriculture and Cabinet. In July 2009, the team concluded the divestment of three of the six sugar estates—St. Thomas/Duckenfield, Long Pond and Hampden—for an aggregate sale price (for the factories) of US$2 million. The associated sugar cane lands were divested through 50-year leases. In July 2010, the Government signed an agreement with Complant International Sugar Industry Co. Limited, a Chinese firm, for the sale of the Monymusk, Frome and Bernard Lodge sugar factories and associated farmlands of the Sugar Company of Jamaica (SCJ) Holdings for US$9 million. Under the agreement, the firm is committed to invest US$127 million, approximately, from 2011 to 2013, on modernizing the factories. The firm is also investigating the feasibility of constructing a sugar refinery and ethanol plant. At present there are post-divestment matters outstanding as it relates to contractual obligations between the purchasers and the Sugar Company of Jamaica Holding, on the sale of the six sugar estates. Post-closing issues remaining outstanding to be addressed by the Government at September 2012 included remedy of environmental breaches, land transfer, and the facilitation of the approval of all regulatory licenses. These matters are being pursued by the respective parties (the Government and Complant International Sugar Industry Co. Limited).

During FY 2010/2011, Jamaica privatized lands at Montpelier, St. James, and land and buildings at Ariguanabo. In January 2010, the sale of 525 acres of the Montpelier Citrus Company Limited lands was approved by the Cabinet. The land was sold for J$52 million to Ramble Enterprises Limited, a local company engaged in dairy farming. In February and December 2010, a total of 24.2 acres of the Cotton Polyester Factory Complex were sold to the Urban Development Corporation for J$150.0 million.

In March 2010, the Cabinet approved the sale of 14 acres of land (with buildings) of the Ariguanabo property to the existing lessee, New Era Homes Limited for an aggregate sale price of J$163.9 million.

In December 2010, the Government finalized the sale of the National Hotel and Properties interest in the Jamaica Pegasus Hotel Limited. The shares were sold for US$11 million.

In October 2011, the Government finalized the sale of the assets of the Mavis Bank Coffee Factory to Jamaica Producers Group Limited and Pan Jamaican Investment Trust Limited for US$4 million.

The Urban Development Corporation (UDC) completed the sale of its 50% stake in Bloody Bay Hotel Development Limited (BBHDL) to Village Resorts Limited (VRL) in 2013. The Cabinet approved the sale of the shares to VRL in January 2013, and UDC and VRL signed the agreement finalizing the sale on March 27, 2013. Aggregate proceeds from the sale were US$11.2 million, which included US$9.5 million for the real estate and related fixed assets and US$1.7 million representing UDC’s share of cash and other liquid assets of BBHDL at the time of the sale.

Following the decision to divest the Wallenford Coffee Company (WCC), the Cabinet decided on March 18, 2013, to approve the WCC Memorandum of Understanding (MoU). The MoU was executed by all parties as at August 29, 2013. The sale price was US$16 million and the purchaser assumed possession of WCC on September 11, 2013.

 

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In May 2014, the Government, through the Jamaica Bauxite Mining Limited (JBM), executed a Debt Settlement & Asset Purchase Agreement with UC Rusal Alumina Jamaica Limited, owner of 93% interest in the West Indies Alumina Company (Windalco), for the sale of JBM’s 7% interest in Windalco for US$11 million.

In 2014, Oceana Hotel and Forum Hotel were sold for J$385.0 million and J$350 million, respectively.

In January 2015, the Government executed an agreement for the sale of the former Farm Machinery Centre property to RYCO Jamaica Ltd for J$40 million.

The following table shows a summary of certain major entities privatized and the proceeds received by Jamaica since 2000 in relinquishing its majority or residual interest:

Summary of Certain Major Jamaican Entities Privatized (By Sale) (1)(2)

 

Entity

   Year(s) of
Privatization
     Type of Sale    Payment
Received in
J$ Million
     Payment
Received in
US$ Million
     Sector

Ashtrom Jamaica Limited

     2000       Shares      22.00         N/A       Housing

Jamaica Public Service Co. Ltd

     2001       Shares      N/A         201.0       Energy

Aqualapia Limited

     2002       Shares      32.35         N/A       Agri-Business

Sangster International Airport

     2003       Lease      7.00         N/A       Transportation

Land – Ariguanabo (13.76 hectares)

     2003       Sale      23.48         N/A       Housing

Building (Lot 5A) – 60,000 square feet

     2003       Lease      7.68         N/A       Warehousing

Building (Lot 5B) – 60,000 square feet

     2003       Lease      7.68         N/A       Manufacturing

Cotton Polyester Textile Company Ltd.

     2004       Lease      7.55         N/A       Manufacturing

Land – Salt River (51 hectares)

     2005       Sale      6.93         N/A       Tourism

Farm Machinery Center

     2006       Lease      N/A         0.18       Manufacturing

Hampden & Long Pond Estate

     2009       Sale/Lease      N/A         1.5       Agriculture

Duckenfield Estate

     2009       Sale/Lease      N/A         0.5       Agriculture

Land – Montpelier Citrus Company Limited – 525 acres

     2010       Sale      52.00         N/A       Agriculture

Cotton Polyester Factory Complex

     2010       Sale      150.00         N/A       Manufacturing

Land and Buildings - Ariguanabo

     2010       Lease/Sale      163.90         N/A       Manufacturing

Jamaica Pegasus Hotel of Jamaica Limited(3)

     2010       Sale      N/A         11.0       Tourism

Bernard Lodge, Frome & Monymusk

     2010       Sale/Lease      N/A         9.0       Agriculture

Mavisbank Coffee Factory

     2011       Sale of Assets      N/A         4.0       Agro-Processing

Bloody Bay Hotel Development Limited (BBHDL)

     2013       Sale      N/A         11.2       Tourism

Wallenford Coffee Company Limited

     2013       Sale of Assets      N/A         16.0       Agriculture

West Indies Alumina Company (Windalco)

     2014       Shares      N/A         11.0       Mining

Oceana Hotel

     2014       Sale of Asset      385.0         N/A       Tourism

Forum Hotel

     2014       Sale of Asset      350.0         N/A       Residential

Farm Machinery Center property

     2015       Sale      40         N/A       Agri-business

 

(1) Where payment is received in both JA dollars and US dollars for certain sales, the amounts listed are not equivalencies, but represent the portion of the payment received in each currency. This table does not include entities divested by FINSAC.
(2) This table does not reflect the privatization of Air Jamaica. For information about such privatization please refer to Section “—Privatization”.
(3) The sale of the Government’s 59.81% holding in the hotel was completed in December 2010.

Source: National Investment Bank of Jamaica Limited/Development Bank of Jamaica Limited, Ministry of Finance and Planning.

 

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Significant Government-Owned Companies

The Government of Jamaica owns and controls certain companies and enterprises, the most significant of which include the National Housing Trust (NHT), the Heart Trust, the Airports Authority of Jamaica (AAJ), the Port Authority of Jamaica, or the Port Authority, and the National Insurance Fund (NIF).

The Government of Jamaica established the NHT to lend money at low interest rates to contributors who intend to purchase, build, repair, or improve their homes. Furthermore, the NHT develops housing schemes for the sale of homes to contributors. The NHT also offers low-cost financing to private developers.

The Heart Trust is an organization that attempts to strengthen the workforce in Jamaica via the development, support, and maintenance of technical and vocational, education and training institutions within the country. The Heart Trust is active in the development of vocational and technical skills training programs, career guidance, job placement, assessment and certifications, policy analysis, and technical assistance to institutions, among other functions and activities.

The Government of Jamaica established the AAJ in 1974 through the Airports Authority Act. The AAJ is an independent statutory body with the principal responsibility, through ownership and management, of Jamaica’s two international airports, the Norman Manley International Airport and the Sangster International Airport. As of 1990, the AAJ assumed additional responsibility for Jamaica’s four domestic aerodromes. The AAJ is involved in the long-term planning and development of the airport system within Jamaica.

The Port Authority is a statutory corporation within Jamaica that the Government of Jamaica established through the Port Authority Act of 1972. The Port Authority constitutes the principal maritime agency that has broad responsibility for both the development and the regulation of Jamaica’s port and shipping industries. Furthermore, the Port Authority has the general mandate of, and responsibility for, ensuring the safety of all vessels that navigate through Jamaica’s ports of entry. The Port Authority also exercises general responsibility for regulating tariffs on goods that enter into and exit from Jamaica’s public ports.

The National Insurance Fund (NIF) was established under Section 39 of the National Insurance Act. It is responsible for managing the investment portfolio created from contributions to the National Insurance Scheme (NIS). NIF seeks to optimise returns and provide for the disbursement of pensions and other benefits pursuant to the NIS.

The following table provides the respective assets, revenue, and expenses for the significant government-owned companies listed below as at March 31, 2015:

 

     Assets      Revenue      Expenses  
     (in millions of J$)  

National Housing Trust

     220,920.87         26,542.04         7,049.64   

Heart Trust

     8,467.40         9,223.09         7,812.48   

Airports Authority of Jamaica

     21,003.45         5,493.77         3,025.03   

Port Authority of Jamaica

     54,033.66         17,510         16,012.15   

National Insurance Fund

     73,654.05         22,627.86         19,599.08   

Inflation

The macroeconomic stabilization program introduced in 1991, which has focused on lowering inflation through tight fiscal and monetary policies and stability in the foreign exchange market, has contributed to a consistent reduction in the rate of inflation. Macroeconomic stability continues to be a primary focus of Jamaica under the Economic Reform Programme, as Jamaica regards consistent low levels of inflation as the cornerstone of sustained long-term economic growth.

 

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The Consumer Price Index number series, which measures the rate of inflation, has 12 divisions that are based on the United Nations Statistical Division—Classification of Individual Consumption According to Purpose (COICOP). The “basket” of consumer goods and services has approximately 482 commodities.

Inflation was 6.4% in 2014, a decrease from 9.5% in 2013 and from 8.0% in 2012. The decrease in inflation in 2014 as compared to 2013 was primarily due to the 2.0% downward movement in the index for the division ‘Housing, Water, Electricity, Gas and Other Fuels’. This decline was however contained by increases in the index for the divisions ‘Food and Non-Alcoholic Beverages’ of 10.1% and ‘Transport’ of 4.6%.

The outturn for 2014, which was the lowest since 2011, was largely influenced by lower energy and transportation costs due to the decline in crude oil prices. The major inflationary impulses stemmed from increases in the price of domestic agriculture commodities in the context of drought conditions which prevailed during the September quarter.

The All Jamaica ‘All Divisions’ Consumer Price Index for March 2015 was 222.7, indicating an increase of 0.5% compared to the February 2015 index of 221.5. The movement in the March 2015 index resulted in the calendar year-to-date inflation rate of -0.6% and the fiscal year 2014-15 inflation of 4.0%. The period March 2014 to March 2015 recorded a positive movement of 4.0%.

The following table shows the changes in the Consumer Price Index for the five years ended December 31, 2014, and for the interim period of 2015:

 

Year/Period

   Consumer Price Index Increase
Over Previous Year
 
     (%)  

2010

     11.7   

2011

     6.0   

2012

     8.0   

2013

     9.5   

2014

     6.4   

Jan – Mar 2015

     -0.6   

 

Source: Statistical Institute of Jamaica.

Employment and Labor

In 2014, the total labor force in Jamaica was 1,307,725 persons, a 0.1% decrease compared to 1,308,475 persons in 2013. The service sector employed 67.4% of the employed labor force in 2014, while the goods-producing sector accounted for 32.6% of the employed labor force in the same period. The agriculture and manufacturing sub-sectors accounted for 18.4% and 6.5% of the employed labor force, respectively.

Average employment in 2014 was 1,128,100, compared to 1,108,900 in 2013. The average unemployment rate was 13.7% in 2014, a decrease from 15.2% in 2013.

The calendar year ending 2014 recorded 332 industrial disputes and 5 work stoppages. While the 2013 period accounted for 389 industrial disputes and 9 work stoppages. There were 1,991 man hours lost for 2014 while 7,652 man hours were lost for the 2013 period. This showed a significant decrease of 73.9% when compared to the 2013 period.

 

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The following table shows certain labor force and employment data for the five years ended December 31, 2014:

Labor Force and Employment(1)

 

     2010      2011      2012      2013      2014  
     (in thousands of persons, except percentages)  

Total Population

     2,701.3         2,707.4         2,706.9         2,713.9         2,720.4   

Labor Force

     1,249.7         1,251.3         1,281.9         1,308.5         1,307.7   

Employed Labor Force

     1,094.9         1,093.0         1,103.4         1,108.9         1,128.1   

Unemployed Labor Force

     154.7         158.3         178.6         199.6         179.7   

Unemployment Rate (%)

     12.4         12.6         13.9         15.2         13.7   

Job-Seeking Rate (%)

     7.6         8.0         8.9         9.8         9.0   

Labor Force Participation Rate (%)

     62.4         62.3         61.9         63.0         62.8   

Male (%)

     90.8         90.7         89.5         88.8         89.9   

Female (%)

     83.8         83.3         81.9         79.9         81.9   

Age Breakdown

              

14 – 19 Years

     52.7         57.3         52.3         50.2         55.6   

20 – 24 Years

     73.0         73.1         69.6         65.0         67.9   

25 – 34 Years

     86.2         86.0         84.3         83.2         84.0   

35 – 44 Years

     90.1         90.6         89.6         89.2         90.1   

45 – 54 Years

     93.3         92.1         92.7         91.6         92.8   

55 – 64 Years

     94.9         95.0         94.4         94.7         95.2   

65 Years and Over

     97.6         97.0         96.2         96.0         97.5   

 

(1) The data above represent the derived annual average, updated to reflect 2011 based population estimates.

Source: Statistical Institute of Jamaica, Labour Force Survey.

Legal Processes

In 2015, the Government is continuing its program to modernize the country’s law enforcement infrastructure, transforming the culture of the Jamaican Constabulary Forces (JCF) into a modern policing service and restore public confidence by:

 

    actively targeting corruption within the JCF;

 

    improving the professionalism of police officers through intense leadership and management training and development;

 

    implementation of a performance management system with targets and verifiable indicators for the executive leadership of the JCF;

 

    revising the JCF Use of Force policy with emphasis on ethical policing and protecting the rights of citizens;

 

    enhancing the use of technology for management and intelligence gathering;

 

    enacting a major program of legislative reform including restructuring the accountability framework of the JCF; and

 

    implementing community policing in all policing divisions.

The current policing strategy is working in tandem with the Ministry of National Security’s emphasis on crime and violence prevention strategies and improved community safety through the development of a Crime Prevention and Community Safety Strategy. The strategy is based on the following:

 

    creating community-based partnerships to enhance local governance structures;

 

    diversion and reintegration of ex-offenders and deported persons in order to reduce re-offending; and

 

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    establishment of prevention programs that focus on young people at risk of involvement in crime and violence.

 

    the Ministry’s crime prevention efforts are duly supported by the following international partners:

 

    the United Nations Development Program, Jamaica Violence Prevention, Peace & Sustainable Development Program (JSPD);

 

    the United States Agency of International Development;

 

    the European Union’s Poverty Reduction Program II—Capacity Building and Training for Communities Component;

 

    the Canadian Improved Governance and Citizen Security and Participation Program/Community Empowerment and Transformation;

 

    the United Kingdom Department for International Development (DFID) Rehabilitation and Reintegration of Local Offenders and Deported Persons Programme;

 

    DFID, which is also supporting policy development and social intervention through the Community Security Initiative; and

 

    the Citizen Security and Justice Program funded by the IADB which is set to continue for an additional four years in vulnerable communities.

Measures taken by the Government in 1993 to enhance security, particularly in the major resort areas of the north coast where special tourist security personnel were assigned, have been successful in reducing crimes against tourists. The economy and foreign direct investment can be negatively affected by a material increase in violent crimes and drug trafficking. If the recent decreases in crime were not to continue and there were a material increase in violent crimes and drug trafficking, this could have a material negative impact on the Jamaican economy by reducing tourism and the sectors of the economy that benefit from tourism as well as foreign direct investment.

The Government is working to strengthen the legislative tools available to the criminal justice system. The law enforcement apparatus has been enhanced with the promulgation of critical amendments to six pieces of legislation that will assist the police and prosecutors in their crime-fighting efforts. Additionally, the Ministry of National Security has proposed and gained approval for the development of Anti-Gang Legislation, targeting criminal organizations which have been at the heart of the criminal threat facing the country. Most recently, the Criminal Justice (Suppression of Criminal Organisations) Act of 2014, a law created to disrupt and suppress criminal gangs, was enacted.

Crime Statistics

Crime prevention measures, particularly those implemented under the Citizen Security and Justice Programme (CSJP), have been successful in tackling individual risk factors for crime and violence. Importantly, the 2012–13 National Crime Victimization Survey (NCVS) found that, consistent with program objectives, respondents who reside in CSJP communities are more likely to report that crime in their local community has declined over the last five years (44.1%) than respondents who reside in non-CSJP communities (27.5%).

As reported by the JCF Statistics Unit, crime statistics for 2014 showed improvement compared to the previous year. Serious violent crimes, which include murders and shootings, showed a 14% decrease during the period from January 1 to December 31, 2014, with 2,100 cases in 2014 as compared to 2,441 cases in the same period in 2013. When compared to the corresponding period of 2013, crime statistics for the period from January 1 to December 31, 2014 revealed that the total number of murders decreased by 16%, from 1,200 cases for the same period in 2013 to 1,005 in 2014. Conversely, the number of reported cases of murder during the period January – April 25, 2015 increased by 12% with 344 cases when compared to the corresponding period in 2014 with 308 cases.

 

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THE EXTERNAL ECONOMY

Balance of Payments

Jamaica’s balance of payments is dependent on international economic developments as well as domestic economic policies and programs. For 2014, the current account deficit improved by US$168.8 million to US$1,150.8 million, or 8.3% of GDP, as compared to a deficit of US$1,319.6 million, or 9.3% of GDP in 2013. The reduction in the current account deficit for 2014 resulted primarily from improvements in all sub-accounts, with the exception of the income sub-account. In particular, the current account largely reflected an improvement in the trade balance, due to a decline in imports. The current account measures the trade balance plus the balance on services, income and current transfers.

For the purpose of this section, exports include free-zone exports and goods procured in ports, while imports include free-zone imports and goods procured in ports. Further, imports are recorded at their market value at the customs frontier of the economy from which they are exported.

In 2014, the merchandise trade deficit improved by 3.9% or US$151.0 million to US$3,730.5 million as compared to US$3 881.5 million in 2013, primarily due to a contraction in the value of imports, which was itself partly offset by a reduction in earnings from exports. In 2014, the value of exports decreased by 8.1% or US$127.5 million to US$1, 453.0 million compared to US$1 580.5 million in 2013, mainly due to lower earnings from non-traditional exports and sugar. The value of imports declined by 5.1% or US$278.4 million to US$5,183.6 million in 2014 compared to US$5 462.0 million in 2013, mainly due to a reduction of 17.6% in spending on chemicals. Please note that these values are presented in the balance of payments, under “Free on Board” (“f.o.b.”) standards.

For 2014, the surplus on the services sub-account increased by 9.0% to US$674.2 million from US$618.3 million in 2013. The increase in the surplus on services was primarily the result of an improvement in the balance on transportation as well as an increase in the surplus for travel, partly offset by a worsening in the deficit for other services. The deterioration of the other services balance was mainly influenced by larger outflows from construction services, financial services and insurance & pension services.

The deficit on the net income sub-account was US$386.3 million for 2014, which represented an increase of 39.5%, relative to the deficit of US$276.9 million in 2013. The outturn for 2014 was mainly a result of an increase in interest income outflows and profit repatriation by FDI related companies.

In 2014, net current transfers increased by 3.2% to US$2,291.8 million from US$2,220.5 million in 2013, primarily due to increases in personal (private) transfers.

The balance of payments results for 2014 were influenced by net capital inflows from official and private sources, which were sufficient to finance the current account deficit. As a result, the net international reserves increased by US$953.3 million to US$2,001.09 million as at December 31, 2014.

 

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The following table shows Jamaica’s balance of payments for the five years ended December 31, 2014:

Balance of Payments (f.o.b.)

 

     2010     2011     2012     2013     2014  
     (in millions of US$)  

Current Account

     (934.9     (1,913.8     (1,378.6     (1,319.6     (1,150.8

Goods Balance

     (3,269.5     (4,111.7     (3,903.9     (3,881.5     (3,730.5

Exports(2)

     1,330.9        1,623.7        1,728.5        1,580.5        (1,453.0   

Imports(3)

     4,600.4        5,735.3        5,632.4        5,462.0        5,183.6   

Services Balance

     811.0        667.5        536.1        618.3        674.2   

Transportation

     (424.8     (559.7     (726.2     (689.5     (671.0

Travel

     1,804.6        1,830.8        1,889.6        1,902.7        2,067.3   

Other Services

     (568.8     (603.7     (627.4     (594.9     (722.1

Goods and Services Balance

     (2,458.5     (3,444.2     (3,367.8     (3,263.2     (3,056.3

Income

     (486.4     (459.4     (122.1     (276.9     (386.3

Compensation of Employees

     89.1        46.3        49.7        29.9        33.2   

Investment Income

     (575.5     (505.7     (171.7     (306.8     (419.5

Current Transfers

     2,010.0        1,989.8        2,111.3        2,220.5        2,291.8   

General Government

     194.3        141.3        192.7        259.3        220.6   

Other Sectors

     1,815.7        1,848.4        1,918.5        1,961.2        2,071.1   

Capital and Financial Account

     934.9        1,913.8        1,378.6        1,319.6        1,150.8   

Capital Account

     (22.1     (9.1     (26.2     (12.8     (27.5

Official

     4.2        29.0        5.9        18.9        4.2   

Private

     (26.3     (38.2     (32.1     (31.7     (31.7

Financial Account

     957.0        1,923.0        1,404.9        1,332.4        1,178.3   

Other Official Investment

     967.7        488.7        356.4        496.6        939.9   

Other Private Investments (including errors and omissions)

     431.3        1,229.0        208.0        758.1        1,191.7   

(Increase)/Decrease in reserves(4)

     (442.0     205.2        840.5        77.8        (953.3

 

 

(1) Preliminary.
(2) Based on recommendations contained in the IMF’s Balance of Payments Manual, exported goods include free-zone exports and goods procured in ports.
(3) Based on recommendations contained in the IMF’s Balance of Payments Manual, imported goods are recorded at their market value at the customs frontier of the economy from which they are exported and include free-zone imports and goods procured in ports.
(4) Official International Reserves held by the Bank of Jamaica.

Source: Bank of Jamaica.

Foreign Trade

Total merchandise trade (exports plus imports) between Jamaica and its foreign trade partners in 2014, decreased by 5.4% to US$7,290.2 million, as compared to US$7,710.3 million in 2013. The merchandise trade deficit decreased by 3.6% in 2014, to US$4,386.2 million, compared to US$4,549.5 million in 2013. The decrease in the trade deficit in 2014 was primarily a result of lower imports of minerals, fuels, chemicals and food. The value of exports decreased by 8.1% due, primarily, to lower earnings from chemical exports and food. Please note that these import values are values presented under “c.i.f.” standards, which include cost, insurance and freight costs and exports are presented at free on board (“f.o.b.”) standards.

 

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The following table shows the performance of merchandise trade for the five years ended December 31, 2014:

Merchandise Trade (c.i.f)

 

     Imports(1)      % Change      Exports(2)      % Change      Balance     % Change  
     (in millions of US$, except percentages)  

2010

     5,326.4         5.3         1,335.7         1.2         (3,990.8     6.8   

2011

     6,364.8         19.5         1,732.5         29.7         (4,632.3     16.1   

2012

     6,298.3         1.0         1,742.8         0.6         (4,555.5     -1.7   

2013

     6,129.9         -2.7         1,580.4         -9.3         (4,549.5     -0.1   

2014

     5,838.2         -4.8         1,452.0         -8.1         (4,386.2     -3.6   

 

(1) Merchandise imports are cost, insurance and freight values, which differ in presentation from the import values presented in the balance of payments.
(2) Exports as listed in this table include free-zone exports and exclude goods procured in ports.

Source: Statistical Institute of Jamaica.

Exports

Total exports, including the Jamaica Free Zone, in 2014, decreased by 8.1% to US$1,452.0 million, compared to US$1,580.4 million earned in 2013, primarily due to decreases in domestic exports of mineral fuels, food and chemicals.

Traditional exports, including the Jamaica Free Zone, increased by 0.4% in 2014 to US$782.3 million from US$779.6 million in 2013, primarily due to increased earnings from alumina, bauxite and sugar. The value of sugar exported in 2014 increased by 4.9% to US$55.8 million from US$53.2 million in 2013, which was mainly due to higher export volumes, as a result of increased production; this despite drought conditions. Rum exports decreased by 7.2% to US$44.7 million from US$48.2 million in 2013, primarily due to increased competition from rum produced by other countries where rum production is subsidized. Alumina exports totaled US$529.4 million in 2014, an increase of 1.1% from US$523.7 million in 2013. Bauxite exports, which are primarily exported to the United States increased to US$131.2 million in 2014, compared to US$128.0 million in 2013. Manufacturing decreased by 1.0% to US$104.7 million in 2014 compared to US$105.7 million in 2013, primarily due to significantly lower earnings from rum, citrus products and coffee products. Sugar however increased by 4.9 % to US$55.8 million, from US$53.2 million in 2013.

Non-traditional exports, including the Jamaica Free Zone, decreased by 15.8% to US$606.1 million in 2014 from US$719.6 million in 2013, primarily due to decreased earnings from chemicals, mineral fuels. Receipts from mineral fuels and related products decreased to US$307.3 million in 2014 from US$351.2 million in 2013. Ethanol exports decreased by 99.9% to US$0.1 million in 2014, as compared to US$88.8 million in 2013, primarily due to unfavorable market conditions. Exports of non-traditional food, also decreased marginally; this by 0.2% to US$152.4 million in 2014, as compared to US$152.7 million in 2013. See “Jamaica—International Relationships—The Trade and Development Act of 2000.”

 

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The following table shows Jamaica’s exports by sector for the five years ended December 31, 2014:

Exports

 

     2010(1)      2011(1)      2012(1)      2013(1)      2014(1)  
     (in millions of US$)  

Traditional Exports

              

Agriculture

              

Banana

     0.0         0.1         0.1         0.1         0.2   

Citrus

     1.8         2.2         1.9         3.3         1.7   

Coffee

     19.2         18.3         13.8         16.3         13.5   

Cocoa

     1.0         1.1         1.9         0.5         1.0   

Pimento

     2.9         1.8         2.3         1.9         0.6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  24.9      23.5      20.0      22.1      17.0   

Mining and Quarrying

Bauxite

  128.7      141.9      130.1      128.0      131.2   

Alumina

  402.8      580.7      508.3      523.7      529.4   

Gypsum

  0.5      0.1      0.4      0.0      0.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  532.0      722.7      638.8      651.7      660.7   

Manufacturing

Sugar

  44.2      62.2      94.1      53.2      55.8   

Rum

  47.2      42.9      55.7      48.2      44.7   

Citrus Products

  2.1      0.3      0.6      0.4      0.2   

Coffee Products

  3.1      2.3      4.1      3.2      2.8   

Cocoa Products

  0.8      0.8      1.0      0.9      1.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  97.4      108.1      155.5      105.7      104.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Traditional Exports

  654.3      854.3      814.3      779.5      782.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-Traditional Exports

Food and Beverage

Pumpkins

  0.4      0.5      0.5      0.7      0.5   

Dasheens

  1.6      1.7      1.7      1.6      1.4   

Sweet Potatoes

  3.1      2.6      2.8      3.6      2.6   

Yams

  18.8      19.6      19.6      22.2      22.0   

Papayas

  2.8      2.5      4.5      3.4      3.9   

Ackee

  12.8      12.4      13.9      15.5      12.1   

Other Fruits & Fruit Preparations

  6.1      5.1      7.0      5.7      5.7   

Meat & Meat Preparations

  2.6      3.6      3.9      5.0      5.1   

Dairy Products & Birds’ Eggs

  6.0      7.4      6.9      6.2      6.9   

Fish, Crustaceans & Mollusks

  8.0      8.0      8.9      11.0      12.6   

Other Food Exports

  62.9      72.4      74.4      77.9      79.8   

Beverages and Tobacco (excluding rum)

  56.3      69.3      48.2      35.0      35.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  181.3      205.8      192.2      187.7      187.5   

Inedible Materials

Limestone

  0.9      2.1      1.5      2.5      2.9   

Waste & Scrap

  17.6      39.7      22.0      26.7      33.8   

Other

  4.4      2.9      3.0      4.5      2.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  22.9      44.9      26.5      33.7      39.4   

Mineral Fuels and related products

  291.2      371.8      387.7      351.2      307.3   

Ethanol

  48.1      117.1      194.8      88.8      0.1   

Apparel

  1.6      1.5      1.4      1.4      1.4   

Furniture

  1.4      1.1      1.0      0.5      0.5   

Other Exports

  52.6      49.2      56.9      36.2      69.9   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  394.9      540.6      641.9      498.2      379.2   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Non-Traditional Exports

  599.1      790.6      860.5      719.6      606.1   

Re-Exports

  82.3      87.2      67.8      81.2      63.6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Exports

  1,335.7      1,732.5      1,742.8      1,580.4      1,452.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Revised.

Source: Statistical Institute of Jamaica.

 

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In the past, the Jamaican sugar and banana industries and, less significantly, traditional rum and rice suppliers, enjoyed preferential trade arrangements with respect to exports to the European Union pursuant to the Cotonou Partnership Agreement. The CARIFORUM-EU Economic Partnership Agreement, which replaces the trade provisions of the Cotonou Partnership Agreement, was signed in October 2008. This free trade agreement provides for duty-free, quota-free access to the EU market for most goods, as at January 1, 2009. The CARIFORUM-EU Economic Partnership Agreement is currently being applied provisionally, and Jamaica is in the process of implementing this agreement. This agreement has a strong development component. Under the 10th European Development Fund’s (EDF) Caribbean Regional Indicative Programme (CRIP), approximately €72 million were allocated to CARIFORUM States for EPA Implementation. At the national level, Jamaica is in the process of implementing two projects in respect of the EPA (EPA I and II).

The EPA Capacity Building Project (EPA) I, which was signed on May 4, 2012 in the amount of €2.25 million, is designed to enhance Jamaica’s competitiveness goals as outlined in the National Export Strategy (NES) and Vision 2030 Jamaica – National Development Plan. The accreditation of official testing laboratories, which is one aspect of the project, will mostly address ISO 17025 standards since this is the internationally recognized standard under the provisions of the WTO Agreement on Technical Barriers to Trade. Capacity building interventions are being undertaken in food-related laboratories which provide support to the export industry. The project aims to promote export competitiveness and food security.

The EPA Capacity Building Project (EPA) II was formulated through sector wide needs assessment/consultation with business support organizations (BSOs) and public sector food laboratories from November 2012 to February 2013. It is designed to enhance the supply-side micro and medium to small-sized enterprises (MSMEs) and to continue capacity building within public sector laboratories and support accreditation agencies, aligning them with the strategic priorities of the Government of Jamaica. The expectation is that through these interventions, Jamaica’s agricultural health and food quality systems will attain a level of compliance which enhances food security and international competitiveness. Approximately €5.0 million was allocated for the EPA II to build on the initiatives undertaken under the EPA I. EPA II will expand its main focus to include upstream problems from the supply side, broadening the EU action in creating a sustainable and enabling environment for increased market presence of Jamaican exports.

The CARIFORUM-EU Economic Partnership Agreement is reciprocal and asymmetrical in nature, and covers trade in traditional export products, such as sugar, bananas, rum and rice, which will ultimately enter the EU duty-free and quota-free. The EU’s preferential system for bananas ended on January 1, 2006, and the sugar regime that existed under the Cotonou Partnership Agreement ended on September 30, 2009. As at October 1, 2009, ACP sugar exporters have duty-free, quota-free access to the EU market under a managed system lasting until 2015. Thereafter, sugar will enter the EU market duty-free and quota-free under the CARIFORUM-EU Economic Partnership Agreement. See “Jamaica-International Relationships—The CARIFORUM-EU Economic Partnership Agreement.”

The Jamaican banana industry contributed minimally to the export earnings for the years 2010, 2011, 2012, 2013 and 2014. This was due to the exit of the major exporter from the market, as a result of devastating hurricanes in recent years. Jamaica has already commenced initiatives designed to improve the competitiveness of Jamaican bananas. See “The Jamaican Economy—Principal Sectors of the Economy—Agriculture, Forestry and Fishing.”

Imports

Merchandise imports decreased by 4.8% in 2014 to US$5,838.2 million from US$6,129.9 million in 2013. This decrease in the value of imports was primarily due in part to lower spending in most of the commodity groups. Mineral fuels and related products imports decreased by 11.0% to US$1,936.3 million in 2014 compared to US$2,176.7 million in 2013. In 2014, expenditure on food fell by 4.5% to US$919.9 million, while chemicals fell by 17.6% to US$617.2 million. For the purposes of this discussion, imports include cost, insurance and freight values and include free-zone imports and exclude goods procured in ports.

 

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The following table shows Jamaica’s imports for the five years ended December 31, 2014:

Imports (c.i.f.)(1)

 

     2010(2)      2011(2)      2012(2)      2013(2)      2014(2)  
     (in millions of US$)  

Mineral Fuels and related products

     1,688.7         2,287.3         2,178.3         2,176.7         1,936.3   

Machinery

     793.4         906.1         901.4         905.7         967.0   

Food

     812.9         936.3         952.4         963.6         919.9   

Beverages & Tobacco

     76.0         77.3         79.8         77.1         72.7   

Crude Materials (excl. Fuels)

     60.8         62.3         46.7         56.0         64.0   

Animal & Vegetable Oils & Fats

     32.6         58.4         51.4         42.8         38.9   

Chemicals

     696.9         868.6         896.4         749.1         617.2   

Manufactured Goods

     587.1         641.0         617.9         600.6         614.3   

Miscellaneous Manufactured Articles

     483.0         458.8         455.5         444.0         493.9   

Other

     94.9         68.4         118.1         114.3         114.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Imports

  5,326.4      6,364.8      6,298.3      6,129.9      5,838.2   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Merchandise imports are c.i.f. values which differ in presentation from import values presented in the balance of payments.
(2) Revised.

Source: Statistical Institute of Jamaica.

Trading Partners

The United States of America, Canada, the Netherlands, the United Kingdom and the Russian Federation were Jamaica’s main trading partners for exports in 2014. The main trading partners for imports in 2014 were the United States of America, Venezuelan Republic, Trinidad and Tobago, China, and Mexico.

The following tables show the direction of trade the five years ended December 31, 2014:

Exports (f.o.b.) by Destination

 

     2010(1)      2011(1)      2012(1)      2013(1)      2014(1)  
     (in millions of US$)  

NAFTA

     826.6         1,202.3         963.0         991.9         793.8   

of which USA

     659.7         934.5         837.5         767.1         571.6   

of which Canada

     164.9         263.4         122.6         221.8         221.5   

European Union

     173.0         267.7         347.4         290.7         276.5   

of which UK

     83.9         111.4         45.0         81.8         75.9   

CARICOM

     65.5         67.8         83.2         79.7         89.8   

Japan

     15.8         13.7         10.7         12.4         9.2   

Other countries

     254.8         181.0         338.3         205.7         282.8   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  1,335.7      1,732.5      1,742.8      1,580.4      1,452.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Revised.

Source: Statistical Institute of Jamaica.

 

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Imports (c.i.f.) by Origin(1)

 

     2010(2)      2011(2)      2012(2)      2013(2)      2014(2)  
     (in millions of US$)  

NAFTA

     2,002.9         2,458.8         2,522.6         2,426.5         2,548.7   

of which USA

     1,831.0         2,099.2         2,153.6         2,051.1         2,248.4   

of which Canada

     91.7         117.0         100.7         101.0         106.1   

European Union

     354.8         399.1         377.5         366.9         428.2   

of which UK

     82.4         85.0         85.0         68.9         62.7   

CARICOM

     868.4         973.3         893.7         926.9         763.9   

Japan

     121.0         148.5         205.8         184.0         156.4   

Other countries

     1,979.3         2,385.1         2,298.7         2,225.6         1,941.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  5,326.4      6,364.8      6,298.3      6,129.9      5,838.2   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Merchandise imports are c.i.f. values which differ in presentation from import values presented in the balance of payments.
(2) Revised.

Source: Statistical Institute of Jamaica.

Foreign Direct Investment

Foreign direct investment (FDI) inflows peaked in 2008 at US$1,436.6 million, or 10.5% of GDP, before decreasing by 62.3% in 2009 as a result of global economic conditions. In 2011, FDI reached a twelve-year low of US$218.2 million. FDI inflows increased in 2012 by US$195.1 million or 89.4% and further expanded in 2013 by US$179.6 million or 43.4% to US$592.9 million or 4.2% of GDP for 2013. For 2014, FDI inflows declined by US$42.2 million or 7.1% to US$550.8 million, relative to 2013. This decline was primarily due to relatively lower investment flows in the infrastructure and information, communication and technology (ICT) sector by over US$250.0 million, which were partially offset by expansions in the tourism sector by about US$230.0 million. The following countries each provided FDI to Jamaica in 2014 in the following percentages: China (47.6%), United States (17.1%), Mexico (11.8%), Barbados (11.7%) and Spain (8.9%).

In 2014, Asia was the largest source for direct investment to Jamaica, based on geographical region, mainly through infrastructure projects. Latin America and the Caribbean was the second largest source of direct investment, followed by the United States, which invested predominantly both in information and communication in tourism.

 

LOGO

For 2014, there was net incurrence of portfolio investment liabilities (inflows) of US$248.1 million relative to net acquisition of portfolio investment assets (outflows) of US$284.0 million for 2013. The results for 2014 largely resulted from portfolio liabilities (inflows) of US$720.0 million (US$678.4 million of which were bonds and US$41.5 million of which were equity) which was partially offset by an increase in portfolio assets (outflows) of US$471.9 million in this period. The net acquisition of portfolio assets (outflows) was largely a result of residents’ acquisition of bonds issued by non-residents. The increased portfolio liabilities (inflows) for 2014 was mainly attributable to inflows via foreign investors’ subscription to the US$800.0 million Eurobond floated on the international capital markets on July 9, 2014 and secondary market acquisition of previously floated sovereign and corporate bonds.

 

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Similarly, the results for 2013 reflected an acquisition of portfolio assets (outflows) of US$254.3 million (of which US$215.5 million were debt securities and US$38.9 million were increased equity holdings on non-resident portfolio instruments). Net repayment of US$29.7 million portfolio liabilities primarily reflected the reduction of US$152.2 million in non-resident holdings on equity which were partially offset by bond inflows of US$122.6 million.

Portfolio Investments

 

     2013(1)      2014(1)  
     (in millions of US$)  

A. Net Acquisition of Portfolio Assets (outflows)/inflows

     254.3         471.9   

Equity

     38.9         30.7   

Bonds

     215.5         441.2   

B. Net Incurrence of Portfolio Liabilities inflows/(outflows)

     (29.7      720.0   

Equity

     (152.2      41.5   

Bonds

     122.6         678.4   

C. Net Portfolio Investments Balance (inflows)/outflows

     284.0         (248.1

 

(1) Revised.

International Reserves

Net international reserves of the Bank of Jamaica increased to US$2,001.09 million as at December 31, 2014, from US$1,047.83 million as at December 31, 2013. Gross international reserves as at December 31, 2014 were US$2,473.0 million, or approximately 18.4 weeks of goods and services imports.

As of March 31, 2015, net international reserves of the Bank of Jamaica were US$2,293.68 million, with gross international reserves at US$2,689.74 million or approximately 20.0 weeks of goods and services imports.

The following table shows the Bank of Jamaica’s international reserves for the period December 31, 2010 to December 31, 2014 and as to March 31, 2015.

International Reserves

 

     2010      2011      2012      2013      2014      March 31,
2015
 
     (in millions of US$)  

Supplementary Fund

     154.1         155.3         157.5         137.7         463.2         449.4   

Special Drawing Rights

     332.2         330.4         290.9         295.3         269.2         293.6   

Other Reserves

     2,492.9         2,334.7         1,532.4         1,384.6         1,740.6         1,946.8   

Gross International Reserves

     2,979.2         2,820.4         1,980.8         1,817.6         2,473.0         2,689.7   

Total Foreign Liabilities

     807.8         854.3         855.2         769.7         471.9         396.0   

Net International Reserves

     2,171.4         1,966.1         1,125.6         1,047.8         2,001.1         2,293.7   

Gross Reserves in Weeks of Merchandise Imports

     32.3         25.5         17.8         17.3         26.3         28.6   

Gross Reserves in Weeks of Goods & Services Imports

     23.5         19.2         13.3         12.8         18.4         20.0   

 

Source: Bank of Jamaica.

Exchange Rates

As part of its economic liberalization program, Jamaica began gradually dismantling exchange controls in 1990 and formally abolished all remaining exchange controls with the repeal in 1992 of the Exchange Control Act. The movement of foreign exchange into and out of Jamaica is unrestricted. All Jamaican residents are permitted to hold, invest and borrow foreign currency. Non-residents are also permitted to invest and borrow both local and foreign currency in Jamaica. However, only an authorized dealer may carry on the business of trading in foreign currency or foreign currency instruments. In addition, an authorized dealer must be party to any transaction involving the buying or selling of foreign currency or foreign currency instruments in return for Jamaica dollars and the lending or borrowing of foreign currency. Cambios and bureaux de change are authorized specifically to buy and sell foreign currency.

 

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Since the repeal of the Exchange Control Act in 1992, the exchange rate has been determined by market conditions and Jamaica has not set any trading band or target.

During 2014, the Jamaica dollar gradually depreciated against the US dollar, with the JA/US dollar exchange rate rising from J$106.38 per US$1.00 at December 31, 2013, to J$114.66 per US$1.00 at December 31, 2014, a depreciation of 7.2%. Total purchases and sales reported by authorized foreign currency traders increased to US$9,256.9 million and US$9,015.2 million respectively in 2014, from US$8,512.6 million and US$8,628.7 million, respectively, in 2013. During 2014, the Bank of Jamaica’s intervention in the market resulted in net foreign currency purchases of US$103.1 million, compared to net foreign currency purchases of US$407.5 million for 2013.

The official exchange rate as at March 31, 2015 was J$115.04 per US$1.00, representing a depreciation of 0.3% for the first three months of 2015. The decelerated pace of depreciation, relative to the calendar year ended December 31, 2014, largely reflected the impact of heightened demand for Jamaica Dollar liquidity which prompted entities to sell foreign currency to meet Jamaica Dollar tax obligations. In addition, the Bank of Jamaica provided liquidity support via intervention sales of US$141.1 million in January 2015 amidst low earner supply. The Bank of Jamaica also effected pre-payments of US dollar CD’s amounting to US$176.35 million during the quarter as part of the Bank of Jamaica’s regular reserve management and liquidity policy implementation strategy.

The Federal Reserve Bank of New York does not report a noon buying rate for the JA Dollar. The official exchange rate published by the Bank of Jamaica for US dollars on March 31, 2015 was J$115.04 per US$1.00. See “Exchange Rates.”

 

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PUBLIC FINANCE

The Central Government Budget

The Government of Jamaica includes all ministries, departments and agencies whose activities form part of the budgetary operation of the central administration. The operations of Central Government and state-owned enterprises are now referred to as the Overall public sector.

Jamaica’s fiscal year runs from April 1 of each year to March 31 of the following year. Pursuant to the Constitution and the Fiscal Responsibility Framework, the Minister of Finance and Planning is responsible for preparing estimates of revenue and expenditure and submitting those estimates to Parliament for approval before the beginning of the fiscal year to which they relate. In addition, the Minister of Finance and Planning must present a Fiscal Policy Paper, detailing multi-year budgets and targets and the fiscal strategy being pursued to achieve these targets. The Ministry of Finance and Planning, in conjunction with other ministries, departments, and agencies, prepares multi-year draft budgets, which must be approved by the Cabinet prior to its submission to Parliament. Under the aegis of the enhanced fiscal rules which were legislated in March 2014, Parliament is required to approve the budget prior to the start of the fiscal year to which the budget relates, that is, no later than March 31, beginning with the FY 2015/16 Budget.

The budget distinguishes between recurrent and capital expenditure. Recurrent expenditure refers to operating expenditure of the Central Government, while capital expenditure refers to the Central Government’s planned investment for the fiscal year. The major criteria used in determining allocation levels for recurrent expenditure are expenditure ceilings based on Jamaica’s economic policy, Jamaica’s priorities for the fiscal year, and commitments arising from the continuation of programs, projects and policies previously authorized by the Cabinet. Such commitments include interest on public debt, a statutory obligation that is paid first, as well as salaries, rent and public utilities. The major criteria used in deciding allocation levels for capital expenditure are current year projections for public investment, multilateral/bilateral programs and the implementation status of projects.

Jamaica’s significant indebtedness has impacted the ability of the Government to increase its spending in education, healthcare, and infrastructure and the Government has supplemented that spending and utilized bilateral (project) funding flows to meet the demands of these sectors. Fiscal space has been limited as debt payments must be made before funds are available to Jamaica for other policies and programs. To alleviate the possible adverse impact of fiscal adjustment on the most vulnerable, the EFF includes a floor on social spending for the most vulnerable in the population. The allocations from revenues to education, healthcare, and national security have been mainly to cover the operating costs of these ministries/sectors. The capital budgets of these ministries, however, have been supplemented by bilateral and multilateral (project) funding. These funds are used to build and maintain schools, maintain hospital equipment and buildings in the health sector, and make infrastructural improvements. For example, the Major Infrastructure Development Program (MIDP), is being implemented to improve the road network throughout the island.

 

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The following table shows Jamaica’s fiscal results for FY 2011/12 through FY 2015/16:

Government Revenue and Expenditure

 

     2011/12     2012/13     2013/2014     2014/15     2015/16(7)  

Revenue and Grants

     322,149.8        344,677.7        396,979.5        411,716.1        458,101.1   

Tax Revenue

     289,882.2        319,764.9        343,836.0        370,877.7        411,882.3   

Income and Profits

     106,422.8        115,877.1        112,647.9        120,854.2        129,866.6   

Production and Consumption

     84,628.9        96,459.9        115,212.1        120,421.4        139,389.9   

Of which GCT (local)

     47,973.2        50,897.1        61,264.9        63,994.6        70,551.4   

International Trade

     96,511.6        105,305.7        113,891.8        127,237.7        139,514.0   

Non-Tax Revenue(1)

     16,709.2        18,765.1        41,047.1        34,311.5        30,961.3   

Bauxite Levy

     1,524.5        1,163.7        1,009.5        0.0        4,779.7   

Capital Revenue(2)

     10,585.1        1,015.8        658.3        1,509.1        938.8   

Grants

     3,448.8        3,968.3        10,428.6        5,017.8        9,539.0   

Expenditure

     403,122.2        399,278.9        395,241.7        418,986.4        462,988.1   

Recurrent Expenditure(3)

     349,891.3        361,521.0        358,252.8        395,967.3        432,579.1   

Programs

     89,699.4        87,201.5        91,971.7        112,696.6        135,735.3   

Wages and Salaries

     139,556.9        147,381.8        156,361.6        158,758.5        165,229.4   

Back pay(4)

     3,524.3        9,602.9        12,516.2        7,434.4        5,619.6   

Interest

     120,635.0        126,937.7        109,919.5        124,512.1        131,614.4   

Domestic

     81,547.9        87,729.1        68,728.9        76,052.1        75,234.3   

Foreign

     39,087.1        39,208.6        41,190.6        48,460.5        56,380.1   

Capital Expenditure(5)

     53,230.9        37,757.9        36,988.9        23,019.1        30,409.0   

IMF

     0.0        0.0        0.0        0.0        0.0   

Unallocated

     0.0        0.0        0.0        0.0        0.0   

Fiscal Surplus (Deficit)

     (80,972.4     (54,601.1     1,737.7        (7,270.8     (4,886.9

Loan Receipts

     163,520.5        144,347.1        93,527.4        168,705.9        128,930.1   

External

     20,768.1        10,276.9        53,407.7        129,458.0        72,592.2   

Domestic

     142,752.5        134,070.2        40,119.8        39,247.9        56,337.9   

Amortization

     128,373.2        88,329.8        106,640.2        87,635.5        178,579.5   

External

     60,553.0        51,235.0        30,036.0        57,883.9        95,136.3   

Domestic

     67,820.2        37,094.8        76,604.2        29,751.6        83,443.3   

Primary Surplus (Deficit)

     39,662.6        72,336.5        111,657.2        117,241.8        126,727.5   

Overall Surplus (Deficit)

     (45,825.0     1,416.2        (11,375.0     73,799.6        (54,536.3

GDP(6)

     1,261,500.0        1,340,300.0        1,459,500.0        1,570,115.0        1,689,700.0   

 

(1) Non-tax revenue includes user fees, dividends from government owned entities and interest revenue.
(2) Capital revenue includes royalties and loan repayments.
(3) Recurrent expenditure refers to the Government’s day-to-day operational expenses.
(4) Back pay represents payments, in any given year, of wages/salaries and allowances due for previous fiscal years.
(5) Capital expenditure refers to Jamaica’s investment for the fiscal year.
(6) GDP is calculated on a calendar year basis. Therefore, the number presented represents an estimate of GDP for the fiscal year. The gross domestic product series was revised in 2003 and subsequently revised again in 2008. This revision was made in order to capture the changing structure of industries in the manufacturing, financial and insurance services, business services and the miscellaneous services sectors. In addition the base year has been changed from 1986 to 1996.
(7) The figures provided in this column represent the 2015/16 Budget.

Source: Ministry of Finance and Planning and the Planning Institute of Jamaica.

Revenue and Expenditure for FY 2014/15

Jamaica posted a fiscal deficit in FY 2014/15 of J$7.3 billion or 0.5% of GDP. This followed a fiscal surplus in FY 2013/14 of J$1.7 billion or 0.1% of GDP, and deficits in FY 2012/2013 of J$54.6 billion or 4.1% of GDP and $81.0 billion or 6.4% of GDP in FY 2011/12. Deficits in previous years were due mainly to higher capital spending, as well as wages and salaries and interest costs. The improved fiscal position since FY 2013/14 is influenced largely by reductions in expenditure, including lower interest payments arising from the National Debt Exchange (NDX), the wage restraint agreements signed with the unions representing public sector workers and lower spending on capital programs. Recent revenue enhancement measures also contributed to the reduction in the fiscal deficit. The 0.5% of GDP deficit recorded in FY 2014/15 was better than the 0.7% deficit originally targeted. This improvement in the fiscal balance in FY 2014/15 was mainly due to the lower than budgeted interest and capital expenditure that outweighed the shortfall in revenue and grants. Jamaica has maintained relatively high primary surpluses over the last five years. The fiscal operations recorded primary surpluses of 7.5% of GDP in FY 2014/15, 7.6% of GDP in FY 2013/14, and 5.3% of GDP in FY2012/13.

 

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The primary surplus for FY 2014/15 amounted to J$117.2 billion, compared to the target of J$121.3 billion. This performance relative to the target was largely influenced by the reduction in expenditures in response to revenue shortfalls. Overall, revenue and grants were J$411.7 billion, or 3.8% below target for FY 2014/15. Compared to FY 2013/14, revenue and grants increased by J$14.7 billion or 3.7%.

The operations of the overall public sector recorded a surplus of 0.4% of GDP in FY 2014/15 and 0.1% of GDP in FY 2013/14 following a deficit of 4.2% in FY 2012/13. The budgeted overall public sector deficit for FY 2015/16 is 0.2% of GDP.

Revenue and Grants

Total revenue and grants for the Central Government for FY 2014/15 were J$411.7 billion, or 26.2% of GDP. This represented an increase of 3.7% over total revenue and grants collected in FY 2013/14. Collections in FY 2014/15, however, were 3.8% below budgeted levels. This below-target performance of revenue and grants was impacted mainly by: lower than programmed real economic growth and inflation, which largely impacted largely corporate taxes, GCT and SCT; faster than expected decline in imports, which negatively affected international trade taxes; significantly lower than expected collections from administrative and compliance activities; and lower grant receipts. Tax revenue for FY 2014/15 increased by 7.9% however non-tax revenue, decreased by 16.4% when compared to FY 2013/14. The grants received in FY 2014/15 totaled J$5.0 billion, 42% below budget, due mainly to delays in the receipt of programmed budget support inflows from the European Union and slower rate of implementation of capital projects.

Expenditure

Total expenditure (excluding amortization) for FY 2014/15 was J$419.0 billion, or 26.7% of GDP. This represented a 6.0% increase over FY 2013/14 and was a reduction of J$20.3 billion, or 4.6% below budget. Recurrent expenditure totaled J$395.9 billion in FY 2014/15, representing 95.0% of total expenditure, with capital expenditure representing 5.0% of total expenditure. Recurrent expenditure was J$8.7 billion, or 2.1%, lower than budgeted, mainly as a result of lower interest payments, particularly on the domestic debt stock.

The largest component of recurrent expenditure was wages and salaries, which represented 37.9% of total expenditure (less amortization) in FY 2014/15 compared to 39.60% of total expenditure in FY 2013/14. Interest costs represented 29.70% of total expenditure in FY 2014/15, 27.8% of total expenditure in FY 2013/14, and 31.8% of total expenditure in FY2012/13. Interest expenditure consumed 30.2% of total revenue and grants in FY 2014/15, compared to 27.7% in FY 2013/14 and 36.8%, in FY 2012/13.

Expenditure on wages and salaries in FY 2014/15 increased to J$158.8 billion, or 1.5%, compared to J$156.5 billion in FY 2013/14, due primarily to: the implementation of the second phase of a health sector reclassification exercise; the payment of performance increments; and the payment of new rates and arrears for previous outstanding settlements to certain government employed workers. Wages and salaries costs in FY 2014/15 were contained by the March 2013 wage restraint agreement signed with unions representing public sector workers, as well as the fact that back-pay in FY 2014/15 were considerably less (by $5.1 billion) than in FY 2013/14.

Interest costs of J$124.5 billion were J$8.2 billion below budget, and included domestic interest costs of J$76.1 billion and foreign interest payments of J$48.5 billion, which were J$5.2 billion and J$3.0 billion, or 6.44% and 5.8%, below budget, respectively.

There has been a declining trend in interest costs, which has contributed to a reduction in the fiscal deficit and containment in the rate of growth of the public debt stock. However, in FY 2014/2015, interest payments accounted for 30.8% of total revenues and estimated at 7.9% of GDP, which represents an increase over FY 2013/2014, when interest payments accounted for 28.4% of total revenues and 7.5% of GDP. Interest cost as a percentage of total revenues has averaged 32.2% over the last three years. Interest payments for FY 2015/16 are projected to account for 29.3% of total revenues and 7.8% of GDP. See “—Public Sector Indebtedness.”

 

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FY 2015/16 Budget

The Government’s target for FY 2015/16 is a primary surplus of 7.5% of GDP, equivalent to J$126.7 billion, and a fiscal deficit of 0.3% of GDP, equivalent to J$4.9 billion. Revenue and grant inflows are projected at J$458.1 billion with expenditure at J$463.0 billion.

The FY 2015/16 budget remains consistent with Jamaica’s overall economic program, which seeks to promote sustainable economic growth and fiscal and debt sustainability while protecting the most vulnerable social groups.

Revenue and Grants

The revenue and grants projection for FY 2015/16 represents 27.1% of the projected GDP, an increase of 0.9 percentage points above the 26.2% in FY 2014/15. Tax revenue of J$411.9 billion is estimated to account for 89.9% of total revenue and grants, about the same as in FY 2014/15.

Tax revenue is budgeted to increase by 11.1% or J$41.0 billion, over collections in FY 2014/15, due mainly to: the programmed increase in nominal income; increased efforts to improve tax payment compliance and the introduction of new tax measures.

Grant receipts are budgeted to increase by $4.5 billion or 90.1% over collections in FY 2014/15, due largely to the expected increase in budget support flows from the European Union.

Expenditure

Expenditure (less amortization) is budgeted to increase by 10.5% over FY 2014/15 due to higher recurrent and capital expenditure. The FY 2015/16 expenditure budget is projected to be J$463.0 billion, comprised of J$432.6 billion for recurrent expenditure and J$30.4 billion for spending on capital projects. Of the recurrent budget, J$135.7 billion is allocated to recurrent programs, J$165.2 billion is allocated to wages and salaries and J$131.6 billion is allocated to interest payments.

In the medium-term, the Government is targeting a primary surplus of 7.5% of GDP as well as fiscal surplus of 0.9% of GDP projected in FY 2016/17. The contribution of expenditure towards the achievement of these targets is embodied in the FY 2015/16 expenditure profile, with total expenditure, net of appropriations-in-aid, of J$641.6 billion. This is comprised of expenditure of J$463 billion and debt amortization payments of J$178.6 billion. Consistent with previous years, debt-servicing is projected to be J$310.2 billion and accounts for the largest portion of the overall budget at 48.4%, followed by education services at J$81.3 billion or 12.7%, national security services at J$51.8 billion or 8.1%, and health services at J$50.3 billion or 7.8%.

Total debt servicing for FY 2015/16 is projected at J$310.2 billion, or 48.4% of the net budget. This compares to FY 2014/15 outturn of J$212.1 billion, or 42.9% of the net budget.

As tabled in Parliament on February 19, 2015, projected debt service for FY 2015/16 shows an increase of J$98.0 billion, or 46.2% of the net budget, when compared to the FY 2014/15 outturn which is mainly due to the increased nominal value of maturities, the effects of depreciation in the value of the Jamaica dollar, provision for liability management and increased provision on guaranteed loans. See “Public Sector Indebtedness—Comprehensive Debt Management—National Debt Exchange.”

The Government’s borrowing requirement for FY 2015/16 amounts to J$128.9 billion. This amount is required to finance the deficit of J$4.9 billion and cover amortization payments of J$178.6 billion, leaving an overall deficit of J$54.5 billion. The overall deficit will be financed by the use of cash balances from the previous fiscal year.

 

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The expenditure on wages and salaries is budgeted to increase by 4.1% in FY 2015/16. This increase is due primarily to the: proposed 3% salary adjustment to public sector workers that is currently being negotiated with labor unions; 2.5% performance incentive payment; implementation of the third and final phase of the health sector reclassification; and, commencement of new rates for correctional officers.

Wage Developments

Due to the economic conditions prevalent at the time, the scheduled 7% pay increase for public sector workers due April 2009 was not implemented. The Government recognized and implemented the 7% wage increase effective as of April 2011 and payment commenced in September 2011. The balance of the increased payment not recognized in 2009 (from May 2009 to August 2009) was paid in December 2011. A one-off payment equivalent to two years of the 7% increase (FY 2009/10 and FY 2010/11) was discharged over the medium-term, with two payments having been made in FY 2012/13 and FY 2013/14 respectively, and the final payment made in FY 2014/15.

In March 2013, the Government concluded and signed agreements with unions representing 82% of public sector workers. The parties to the agreement committed to, among other things, no increase in wage rates for the period 2012–2015. However, the agreements include a one-off payment of J$25,000.00 per worker, to be paid in August 2013, 2014 and 2015, to all employees in the central and local government and public bodies. The Government is currently negotiating a new wage agreement with unions to cover the period 2015-2017. The wage restraint policy and associated agreements being negotiated with unions will contribute toward the Government achieving a wage/GDP ratio of 9.8% by March 2016 and meeting the 9% of GDP wage ceiling by the revised date of March 2017.

Taxes and Tax Reform

History

Since independence, the Jamaican tax system has been dependent on a multiplicity of indirect taxes including on international trade and an income tax system with different marginal tax rates and several deductible allowances. Jamaica has engaged in major tax reform in the mid 1980’s as well as the 1990’s. In 2004, a comprehensive study of Jamaica’s tax system by a university found that the system, while it had a sound basic structure, had major problems. Since 2004, the Government has sought to address some of the issues identified in the study, including improving receipts from indirect taxes through increasing the general consumption tax (GCT) and enhancing the effectiveness of tax administration.

During 2009, 2010 and 2011, the Government introduced additional tax measures aimed at increasing revenue as a percentage of GDP. Following a Green Paper on Tax Reform issued by the Ministry of Finance in May 2011, a White Paper on Tax Reform 2012 was issued on November 15, 2012. The Green Paper and White Paper on Tax Reform focused on several areas to be reformed over a three-year period. These reforms included, among others, the following: removing basic food from the tax system; reducing the statutory corporate income tax rate to be competitive with regional and international competitors; imposing withholding tax on dividends; overhauling capital allowances regime; preventing tax delinquents from benefiting from tax incentives and tax credits for research and development; limiting capital gains tax in lieu of a reduced transfer tax; and enhancing tax administration to increase compliance.

As part of the Economic Reform Programme (ERP), the Government committed itself to tax reforms that strengthen tax administration and significantly cut back the granting of tax incentives, exemptions and zero rates. The tax reform is meant to be targeted to significantly broaden the tax base, simplify the tax system, reduce economic distortions in the system and pave the way for a phased reduction in tax rates to a competitive level.

A number of tax measures consistent with the reform process were implemented between FY 2012/13 and FY 2013/14, including;

 

    Reducing the standard rate of General Consumption Tax (GCT) from 17.5% to 16.5%;

 

    Partially widening the GCT base; and

 

    Amending the GCT regime as it relates to electricity.

 

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The reduction in the GCT standard rate was consistent with the Government’s commitment to tax reform and reducing the rate applicable to taxable goods and services. The GCT based was partially widened in an effort to broaden the tax base and reduce administrative issues. This was accomplished by reducing the list of items for exempt and 0% GCT. A small number of basic foods and other critical items were retained because of their social sensitivity or significance to consumption by the most vulnerable. For electricity, GCT payable by residential customers was removed and the standard rate of 16.5% was levied on commercial entities and businesses.

Additionally, the Government reduced the statutory Corporate Income Tax (CIT) rate to be consistent with the standard Personal Income Tax Rate, so as to match international benchmarks. The CIT was modified as follows:

 

    The 33.33% rate was retained for the regulated companies, including those regulated by the Financial Services Commission (FSC), Office of Utilities Regulation (OUR), Bank of Jamaica and the Ministry of Finance and Planning; and

 

    The rate was reduced to 25% from 33.33% for unregulated companies.

There was no adjustment to rates applicable to building societies or life assurance companies. The reduction of the statutory CIT rate occurred in the context of the partial widening of the GCT base and an anticipation of enhanced compliance in the payment of CIT and other business taxes.

The asset tax for financial institutions and security dealers regulated by the FSC and Bank of Jamaica was modified to tax 0.14% of total assets of these financial institutions. The tax regime for non-financial institutions was also modified. An annual asset tax was implemented based on the asset value of these companies.

In keeping with equity and to ensure compliance with Jamaica’s trading partners, an adjustment was made to the termination fee structure that relates to mobile-to-mobile and mobile-to-land termination. OUR implemented the following fee structure:

 

    J$0.05 per minute on all calls originating and terminating on a fixed network in Jamaica;

 

    J$0.40 per minute on all other calls (domestic and international) originating in Jamaica; and

 

    US$0.075 per minute on all international calls for termination to the mobile network.

Calls to emergency and special services are among a number of limited exceptions.

The tax free expenses of transportation and commissions were removed from the computation of output tax, which prevents operators in the tourism industry from claiming transportation and commission as a tax free expense when computing the output tax. The 10% GCT rate for the sector was retained. A Hotel Occupancy Room Rate Tax was also implemented, which ranges from US$2.00 to US$12.00 per night based on the number of rooms and size of the hotel.

On November 15, 2013, the Government adopted the Fiscal Incentives (Miscellaneous Provisions) Act 2013and the Income Tax Relief (Large Scale Projects and Pioneer Industries Act) Act 2013:

 

    The Fiscal Incentives (Miscellaneous Provisions) Bill (FIB), and the tax law amendments arising out of it, eliminate existing sector-based incentive programs, provide generalized incentives for employment and capital investments, introduce a rule-based and non-discretionary tax system and encourage tax compliance. This included the repeal of a number of incentive legislations. The FIB also includes the simplification of the capital allowance regime under the Income Tax Act and the introduction of an employment tax credit for unregulated companies based on the statutory contributions paid onetime of up to 30% of the income tax payable from trading income. Furthermore, net loss carry forwards have been restricted to 50% of chargeable income for any year of assessment, except for the first 5 years of a new businesses and entities with gross income of J$3 million or less.

 

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    The Income Tax Relief (Large-Scale Projects & Pioneer Industries) Bill provides a mechanism through which additional income tax incentives can be offered if the Minister of Finance designates a project as a large-scale project or an economic activity in a pioneer industry.

On December 6, 2013, the Government enacted the Customs Tariff (Revision) (Amendment) Resolution and the Stamp Duty (Amendment of Schedule) Order, amending the Customs and Stamp Duty Act, respectively. The new regime reduces customs duty for many higher rate categories, such as jewelry and auto parts and provides a non-discretionary “productive inputs reliefs” for customs duty on items that are part of local production. There is a similar arrangement for some relief from additional stamp duty. These reforms are aimed at reducing the cost of doing business in Jamaica.

FY 2014/15

Revenue measures for the 2014/15 include, among others, the following:

 

    A withholding tax of 15% on insurance premiums paid by Jamaican residents to non-residents.

 

    The Asset Tax rate applicable to regulated companies, excluding Life Insurance companies, was increased from 0.14% to 0.25% of the value of the assets.

 

    The age for which the imposition of General Consumption Tax would be applicable on the second sale of motor vehicles, was increased from 8 to 10 years.

 

    The modified Asset Tax rate for life insurance companies was increased from 0.14% to 1.0% for a period not exceeding one year.

 

    Standardization of Special Consumption Tax (SCT) rate on alcohol of J$1,120 per liter of pure alcohol for all categories, including the tourism sector.

 

    Introduction of a Minimum Business Tax of J$60,000.0 annually, payable in equal amounts in June and September of each year

 

    Increase in the Personal Income Tax threshold (PIT) as at January 1, 2015.

 

    Elimination of zero-rating under the GCT for government purchases, with the exception of public schools and the Jamaica Defense Force.

FY 2015/16

Revenue measures consistent with the reform process to provide for revenue adequacy, base broadening and increased compliance efforts in order to ensure equitable distribution of the tax burden, which are being implemented in FY 2015/16 include the following:

 

    Increase the specific SCT rates on petrol by $7 per liter;

 

    Replacement of the 1% petroleum levy with a specific SCT of $2 per liter;

 

    Re-introduction of GCT on electricity for residential customers (with an increased threshold of 350 kw/h) at the standard rate;

 

    Rationalization of the Environmental Levy with the introduction of the 0.5% on domestic sales (excluding the services sector), as well as on imports from CARICOM;

 

    Increase in the SCT on cigarettes;

 

    Increase in the PIT threshold as at January 1, 2016;

 

    Rationalization of outdated fees for trade and business licenses;

 

    Introduction of withholding tax on specified services at a rate of 3%, designed to improved compliance; and

 

    Other measures to boost compliance such as the introduction of transfer pricing and thin capitalization rules.

 

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PUBLIC SECTOR INDEBTEDNESS

General

Under Section 116 of the Jamaican Constitution, all loans charged on Jamaica’s Consolidated Fund, including all external debt payments such as those under the debt securities, represent a statutory charge on the revenue and assets of Jamaica. See “Public Finance— The Central Government Budget.” These statutory charges are paid without any requirement of Parliamentary approval, directly from revenue and assets, before funds are available to Jamaica for other policies and programs.

The Constitution and the Financial Administration and Audit Act give the Ministry of Finance and Planning overall responsibility for the management of Jamaica’s public debt. The Loan Act limits the amount of funds that may be borrowed. In 2009, the Jamaican Parliament passed legislation increasing the amount of funds that Jamaica may borrow. In November 2012, the House of Parliament approved the Public Debt Management Act, 2012, to make provision for the better management of the public debt. The legislation repealed the Loan Act of 1964 and several enactments related to the incurrence of debt by the Government and other connected matters. The Public Debt Management Act provides for the circumstances under which the Minister of Finance may borrow money, including to finance fiscal deficits, refinance any maturing or outstanding public debt and finance prepayments. The borrowing limits under the Public Debt Management Act are subject to the Financial Administration and Audit Act, as amended, which provides that the Minister of Finance may take any measure to, among others, reduce the fiscal balance to nil and reduce the total debt of Jamaica to 60% of GDP by the end of the financial year ended March 31, 2026. The above-mentioned targets may be exceeded under limited circumstances including parliamentary approval allowing suspension of the fiscal rules for a specified period during the occurrence of major adverse shocks such as natural disasters or a severe economic contraction.

Jamaica has never defaulted on any of its external or domestic debt obligations.

Domestic Debt

At March 31, 2015, Jamaica’s domestic debt was approximately J$1,054.9 billion, which excludes government-guaranteed securities. At December 31, 2014, Jamaica’s domestic debt, which excludes government-guaranteed securities, was J$1,046.9 billion, a decrease of 0.70% when compared to the domestic debt level at December 31, 2013. Jamaica has incurred domestic debt primarily to provide budgetary financing.

In addition to this level of domestic debt, Jamaica has guaranteed certain financial obligations of public sector entities, which carry out major infrastructure projects from time to time. At March 31, 2015, the extent of these internal guarantees was approximately J$38.1 billion.

Currently, Jamaica’s domestic debt consists mainly of Benchmark Investment Notes, following the Jamaica Debt Exchange and National Debt Exchange Initiatives (see below), which saw an exchange of some of the previously issued debt instruments (Local Registered Stocks and Debentures). At December 31, 2014, 0.8% of the outstanding domestic debt was scheduled to mature within one year, 40.8% between one and five years and the remaining 58.4% after five years. The interest rate composition of the domestic debt at December 31, 2014, was 67.7% contracted on a fixed rate basis, while 32.2% was contracted on a floating interest rate basis and 0.1% was non-interest bearing.

At March 31, 2015, 6.9% of Jamaica’s domestic debt was scheduled to mature in one year, 34.5% in five years and the remaining 58.6% after five years. At March 31, 2015, approximately 32.0% of the domestic debt was on a floating rate basis and 67.0% on a fixed rate basis. Of the total debt at March 31, 2015, 24.3% was denominated in foreign currency (US$) and 75.7% was J$-denominated.

At December 31, 2014, Jamaica had J$870.4 billion of domestic bonds and securities outstanding, representing 84.0% of total domestic debt. This represented a J$46.8 billion, or 0.6% decrease over the level outstanding at December 31, 2013. The remaining J$176.5 billion, or 16.0%, is comprised of loans and Treasury bills.

 

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The outstanding stock of Treasury bills at December 31, 2014, was J$4.0 billion, representing 0.4% of total domestic debt. Treasury bills are auctioned on a multiple-price basis.

Jamaica issues both local and foreign currency-denominated bonds in the domestic market. Foreign currency-denominated bonds that are issued in Jamaica are classified as domestic debt. Of the total domestic debt at December 31, 2014, 23.3% was denominated in foreign currency (US$ and Euro). A total of J$243.4 billion, or 23.3%, of the domestic debt was US dollar-denominated, while the remaining J$803.5 billion, or 76.7%, was J$-denominated.

The following table shows domestic debt by instrument type for the five years as at December 31, 2014, and as at March 31, 2015:

Domestic Debt by Instrument Type

 

     December 31,      March 31,
2015
 
     2010      2011      2012      2013      2014     
     (in millions of J$)  

Securities

                 

Treasury Bills

     4,000.0         4,000.0         4,000.0         4,000.0         4,000.0         4,000.0   

Local Registered Stocks

     —           —           —           —           —           —     

J$ Benchmark Notes(1)

     659,066.8         741,015.6         773,786.3         761,731.2         753,374.79         749,361.41   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  663,066.8      745,015.6      777,786.3      765,731.2      757,374.79      753,361.41   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Bonds

Land

  331.1      200.1      —        —        —        —     

US$ Denominated

  108,813.2      108,116.4      186,469.3      244,943.4      243,361.65      256,193.67   

US$ Indexed

  —        —        —        —        —        —     

CPI Indexed Bonds (1)

  23,191.2      24,921.7      26,734.7      39,884. 6      42,954.86      42,338.61   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  132,335.5      133,238.2      213,203.941      284,827.9      286,316.51      298.532.28   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Loans

Commercial Banks

  4,456.2      3,870.6      3,304.00      2,793.00      2,450.00      2,362.50   

Other (including Public Sector)

  105.7      1,048.2      936.6      821.9      709.02      654.91   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  4,561.9      5,134.8      4,240.6      3,614.9      3,159.02      3,017.41   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  799,964.2      883,388.6      995,230.9      1,054,174.044      1,046,850.33      1,054,911.11   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) These instruments were issued as part of JDX. See “—The Jamaica Debt Exchange.”

Source: Ministry of Finance and Planning.

The following table shows the amortization schedule for domestic debt outstanding as at March 31, 2015:

Domestic Debt Amortization Schedule

as at March 31, 2015

 

     2015      2016      2017      2018      2019  
     (in millions of J$)  
  

Bonds(2)

     723.02         68,216.59         74,857.29         61,929.16         49,062.22   

Loans

     4,169.25         9,255.44         14,091.56         15,839.37         12,610.93   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  4,892.27      77,472.03      88,948.85      77,768.53      61,673.15   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Includes securities.

Source: Ministry of Finance and Planning.

 

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The following table shows the interest schedule for domestic debt outstanding as at March 31, 2015:

Central Government Domestic Debt Interest Schedule

as at March 31, 2015

 

     2015(1)      2016      2017      2018      2019  
     (in millions of J$)  

Bonds(1)

     44,539.59         66,937.32         59,349.74         58,913.02         53,319.89   

Loans

     3,397.62         4,477.88         7,102.71         4,400.47         4,397.81   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  47,937.21      71,415.20      66,452.45      63,313.49      57,717.70   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Includes securities.

Source: Ministry of Finance and Planning.

The following table shows the maturity structure of domestic debt outstanding as at March 31, 2015:

Domestic Debt Maturity Structure

as at March 31, 2015

 

     Less than
1 year
     1–5 years(1)      5–10 years(1)      10 years
& over (2)
     Total  
     (in millions of J$)  

J$ Benchmark Notes

     62,649.09         279,347.79         187,341.78         262,361.22         791,699.88   

US$-Denominated Notes & Loans

     6,270.33         82,620.55         67,676.56         99,626.23         256,193.67   

Treasury Bills

     4,000.00         —           —           —           4,000.00   

Commercial Bank & Public Sector Entity Loans

     —           2,414.92         602.50         —           3,017.42   

Other

     —           —           —           0.15         0.15   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  72,919.42      364,383.26      255,620.84      361,987.59      1,054,911.11   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Medium-Term debt.
(2) Long-Term debt.

Source: Ministry of Finance and Planning.

The following table shows the interest rate composition of domestic debt outstanding as at March 31, 2015:

Domestic Debt Interest Rate Composition

as at March 31, 2015

 

     Principal Amount
Outstanding
     Share of Outstanding
Debt
 
     (in millions of J$)      (%)  

Variable Rate Debt

     337,228.99         31.97   

Fixed Rate Debt

     717,079.62         67.97   

Non Interest-Bearing Debt

     602.50         0.06   
  

 

 

    

 

 

 

Total Debt

  1,054,911.11      100.00   
  

 

 

    

 

 

 

 

Source: Ministry of Finance and Planning.

Comprehensive Debt Management

The Jamaica Debt Exchange

On January 14, 2010, the Government of Jamaica launched its strategic and comprehensive domestic liability management program, marketed as the JDX. The main characteristics were a par-for-par exchange offer with “no haircuts,” voluntary exchange of approximately J$701.5 billion in market-issued domestic debt, voluntary exchange of short-dated, high-yielding interest bearing securities for longer-dated securities with significantly lower yields, the introduction of new benchmark securities, an extension of the maturity profile of the domestic debt portfolio in order to lower refinancing risks, achievement of substantial cost savings, the issue of an appropriate mix of fixed, variable and US$ securities and the introduction of new CPI-Indexed Investment Bonds.

 

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The results of the JDX revealed an overall participation rate of approximately 99.2% with a 100% participation rate from financial institutions. This level of success represented an exchange of approximately J$695.6 billion in eligible bonds.

The immediate benefits of the JDX were the realignment of the domestic debt portfolio, which saw a significant reduction in maturities over the next three years; substantial cost savings through the reduction in the projected interest cost for FY 2010/11 of J$17.1 billion (i.e., US$190.7 million or 15.2% of interest cost); extension of amortization equal to J$148.6 billion (or US$1.7 billion) in FY 2010/11; the creation of 25 new benchmark bonds in exchange for over 350 smaller and illiquid bonds; the removal of US Dollar Indexed Bonds and the introduction of new CPI-Indexed Bonds into the domestic portfolio; and an increase in the fixed rate component of the domestic debt portfolio. Occurring simultaneously with the JDX was the passing into law of the Government Securities Dematerialization Act, which allows domestic securities to be issued in a dematerialized format in the Central Securities Depository operated by the Bank of Jamaica.

The National Debt Exchange

Three years after the historic Jamaica Debt Exchange in February 2010, the Government of Jamaica executed a second domestic debt exchange to further realign the portfolio through the extension of maturities and reduction of interest rates. The debt exchange became necessary to address the growing refinancing risk in the one- to three-year period that had again become inherent in the domestic portfolio. It was also one of the actions needed in order for Jamaica to secure an EFF with the IMF.

The Exchange, which was marketed as the NDX, was launched on February 12, 2013, and settled on February 22, 2013. The main features were a voluntary par-for-par exchange for all bonds except the new Fixed Rate Accreting Note (FRAN) offer, which had an exchange ratio of 0.8:1. The new FRAN offer is one where investors are issued principal value of J$80.00 in new notes for every J$100.00 of principal value of Old Notes exchanged. The principal accretes from J$80.00, beginning August 15, 2015, to J$100.00 by the maturity date on August 15, 2028. The introduction of the FRAN was specifically targeted at public bodies and long term investors, such as pension funds.

In addition, the NDX replaced 25 eligible JA and US dollar-denominated benchmark bonds with a nominal value of J$852.5 billion with 22 new benchmark bonds with extended maturities and significantly reduced yields. The NDX had a participation rate of just under 99.0%, translating to a nominal amount of J$841.5 billion tendered for exchange.

The main benefits of the NDX were (1) a reduction in weighted average costs through reduced margins on CPI and variable rate bonds on average by 0.975%, a reduced coupon on locally-issued US$-denominated notes by, on average, 1.792%; reduced coupon on J$-denominated notes by, on average, 3.206%; (2) a reduction in risk associated with variable rate reset rates (tied to treasury rates plus a margin) for variable rate debt reduced by over J$113.0 billion; (3) substantial cost savings averaging J$17 billion per annum through an annualized reduction by an average rate of 2.0%; and (4) a reduction in refinancing risk through an extension of the maturity profile of the domestic debt portfolio by an average of 5 years, and a reduction in redemptions by approximately J$375.0 billion for the period up to 2016.

To increase the aggregate savings of the NDX ahead of the board meeting of the IMF, on March 22, 2013, Jamaica performed, on a private basis, an additional exchange offer with eight leading local holders of various bonds involving approximately J$20 billion and US$51 million, which created four further new local instruments in addition to those created in the NDX transaction.

 

D-59


External Debt

At March 31, 2015, the total of external debt was US$8,577.5 million, of which 94.5% was denominated in US dollars, 2.5% was denominated in Euro, 0.7% was denominated in Yen, and 1.8% was denominated in Chinese Yuan.

At December 31, 2014, public sector external debt was US8,658.6 million, an increase of 4.2% from December 31, 2013, of which 94.5% was denominated in US dollars, 2.7% was denominated in Euro, 0.5% denominated in Yen and 1.7% was denominated in Chinese Yuan. Bilateral and multilateral obligations of US$4,171.4 million accounted for 48.2% of total public sector external debt, representing the largest creditor category of Jamaica’s public sector external debt. Bond issuances of US$4,121.8 million represented 47.6% of total public sector external debt at December 31, 2014. Multilateral indebtedness was US$3,345.0 million, an decrease of 1.9% over December 31, 2013.

Bilateral and multilateral obligations accounted for 48.2% of total public sector external debt at March 31, 2015 and represented the largest creditor category of Jamaica’s public sector external debt. Bond issues of US$4,107.5 million accounted for 47.9% of total public sector external debt at March 31, 2015. Multilateral indebtedness was US$3,322.5 million, an decrease of 0.7% over December 31, 2014.

The IADB, for the period 2006–2009, approved a new country strategy for Jamaica in which the bank links its loans to budget support rather than investment loans. Traditional investment loans may also be used if joint agreement is reached between the bank and the Government. The IADB now provides funding for budgetary support, which is accessed through its policy-based loans.

In September 2008, the Inter-American Development Bank (IDB) provided a US$300 million credit facility to help eligible Jamaican financial institutions maintain credit flows. All seven commercial banks currently operating in Jamaica were eligible to participate in the facility. As at June 2010, US$96.3 million of the IDB credit facility had been disbursed. The remaining amount under the credit facility was cancelled because it was not disbursed.

In December 2001, Jamaica issued US$250 million 11.625% fixed rate notes due 2022. In June 2002, Jamaica registered a US$700 million shelf registration statement with the US Securities and Exchange Commission and subsequently in June 2002, issued US$300 million 10.625% notes due 2017 off that shelf. In April 2004, US$125 million was raised through the re-opening of the existing US$300 million 10.625% bonds due 2017. In October 2004, Jamaica issued €150 million 10.5% bonds due 2014, with both issuances placed primarily with investors in Europe. In June 2005, Jamaica raised US$300 million through an offering of 9.0% fixed rate notes due 2015. In October 2005, Jamaica made further issuances of 9.25% US$250 million notes due 2025 and in February 2006, 8.50% US$250 million notes due 2036. In March 2007, Jamaica issued US$350 million 8.0% fixed rate amortizing notes due 2039. In October 2007, Jamaica issued an additional US$150 million 8.0% fixed rate amortizing notes due 2039. In June 2008, Jamaica issued US$350 million 8.0% fixed rate amortizing notes due 2019. In February 2011, Jamaica reopened the US$350 million 8.0% fixed rate bond due 2019, raising an additional US$400 million 8.0% due 2019. In July 2014, Jamaica issued an additional US$800 million 7.625% fixed rate notes due 2025.

In July 2005, Jamaica issued US$325 million in guarantees with respect to bonds to facilitate the financial restructuring of Air Jamaica Limited, the national airline. In December 2006, Jamaica issued US$200 million in guarantees with respect to bonds to facilitate the restructuring of certain indebtedness of CAP. These bonds were exchanged for bonds of the Government in September 2013. In June 2007, Jamaica issued US$125 million in guarantees with respect to bonds issued by Air Jamaica. In 2009, Jamaica issued a US$60 million guarantee with respect to the expansion of the Norman Manley International Airport in Kingston. In September 2009, Jamaica issued a guarantee for US$121.65 million to HSBC Bank plc for the financing of the Falmouth Cruise Ship Terminal. Additionally, in December 2009 the Government of Jamaica issued a guarantee to NWC for three loans in respect of The Jamaica Water Supply Improvement Project. The loans were in the amounts of J$1,513.6 million, US$19.3 million and €43.3 million. In October 2010, the Government guaranteed a bond issued by the NWC in the amount of US$275 million.

 

D-60


In February 2010 the Government guaranteed a loan of US$340 million to the Road Maintenance Fund from China through the Export-Import Bank of China under its global Preferential Buyer’s Credit (PBC). The purposes of the loan are to finance (a) the rehabilitation of roads damaged by hurricanes and (b) an upgrade in infrastructure to certain roads and drainage. A loan of US$20 million between the Caribbean Development Bank and the Student Loan Bureau was also guaranteed in November 2010. This loan is to facilitate the provision of affordable and adequate financing to students from poor and vulnerable households to complete tertiary level programs in approved institutions in Jamaica and the Caribbean. In November 2011, the Government guaranteed a bond issued by the NROCC in the amount of US$294.2 million. The bond carries a coupon of 9.375% and is due to mature in 2024.

In September 2011, the World Bank provided the Government with a US$100 million Programmatic Fiscal Sustainability Development Policy Loan. The objective of the loan is to enhance fiscal and debt sustainability, increase the efficiency of financial management and budget processes, and reduce distortions and enhance efficiency in the tax system. On December 9, 2011, the Government guaranteed a loan, issued by IDB to the National Water Commission, the purpose of which was to improve the water supply in the Kingston metropolitan area. On the same day, the IDB also issued a US$65 million loan intended to support a sustainable fiscal position by strengthening the Ministry of Finance and Planning’s institutional capacity. On December 13, 2012, the IDB issued a U$30 million loan that intended to support the Government’s efforts to improve human capital and labor market outcomes of the poor by enhancing the efficiency and effectiveness of key social protection programs. In October 2013, the IDB provided the Government with a US$60 million Public Financial and Performance Management Loan. In December 2013, the World Bank issued a US$130 million Economic and Stabilization and Foundation for Growth Development Policy Loan. In February 2014, the IDB provided a US$80 million Fiscal Structural Programme for Economic Growth Loan and a US$60 million Competitive Enhancement Programme Loan.

In September 2013, the Government completed an exchange offer, in which Jamaica exchanged all of the 8.50% amortizing notes due 2021 issued by Clarendon Alumina Production (CAP) Limited (and guaranteed by the Government) for 8.50% amortizing notes due 2021 issued by the Government. There was no increase in the Government’s debt as a result of the exchange offer.

The Government, as a part of its debt management strategy, executed a liability management exercise through the buyback of high cost near term maturities. On September 2, 2014, the Government repurchased US$37.88 million nominal amount of the US$300 million 9% notes due to mature in 2015. Similarly, in December 2014 the Government repurchased US$14 million nominal amount of the US$425 million 10.625% notes due 2017 and US$9 million nominal amount of US$161.9 million 8.5% amortizing note due 2021.

Upon the IMF approval of the EFF, certain funds from multilateral and development agencies, such as the World Bank, IDB and the EU, were made available to the Government.

 

D-61


The following table shows medium and long-term public sector external debt by creditor category for the five years ended December 31, 2013 and other periods as indicated:

External Debt by Creditor

 

     2010      2011      2012      2013      2014      March 31,
2015
 
     (in millions of US$)  

Bilateral

                 

OECD

     464.8         404.0         299.4         235.2         163.6         155.4   

Non-OECD

     540.1         385.4         501.8         620.3         663.0         654.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  1,004.9      789.4      801.2      855.5      826.6      810.1   

Multilateral

IADB(1)

  1,235.8      1,291.5      1,249.4      1,281.1      1,413.9      1,419.6   

IMF(2)

  800.0      850.0      850.0      836.7      665.2      583.3   

IBRD(3)

  571.5      660.1      661.6      779.1      753.8      823.9   

Other(4)

  464.3      505.2      503.7      513.1      511.9      495.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  3,071.6      3,306.7      3,264.7      3,410.0      3,344.8      3,322.5   

Commercial Banks

  484.0      465.8      436.6      386.8      351.1      323.9   

Other Commercial(5)

  41.6      36.0      28.9      21.0      14.3      13.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  525.6      501.7      465.5      407.8      365.4      337.4   

Bonds

  3,787.4      4,028.3      3,724.1      3,636.8      4,121.8      4,107.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

$ 8,389.5    $ 8,626.1      8,255.5      8,310.0      8,658.6      8,577.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Inter-American Development Bank.
(2) International Monetary Fund.
(3) International Bank for Reconstruction and Development.
(4) Caribbean Development Bank, OPEC Fund for International Development, European Development Bank, European Economic Commission Community and Nordic Development Fund.
(5) Loans from suppliers.

Source: Ministry of Finance and Planning.

The following table shows Jamaica’s external debt by debtor for the five years ended December 31, 2014 and other periods as indicated:

External Debt by Debtor

 

     2010      2011      2012      2013      2014      March 31,
2015
 
     (in millions of US$)  

Government Direct

   $ 6,287.1       $ 6,376.6         5,985.8         6,291.7         6,952.8         6,967.2   

Government-Guaranteed

     1,302.5         1,399.5         1,419.7         1,269.5         1,257.3         1,234.8   

Bank of Jamaica

     800.0         850.0         850.0         478.8         448.5         375.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

$ 8,389.5    $ 8,626.1      8,255.5      8,310.0      8,658.6      8,577.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Source: Ministry of Finance and Planning.

 

D-62


The following table shows the amortization schedule for external debt outstanding as at March 31, 2015:

External Debt Principal Amortization Schedule

as at March 31, 2015

 

     2015      2016      2017      2018      2019      2020  
     (in millions of US$)  

Multilateral

                 

IADB

     63.9         91.5         102.2         99.7         106.8         112.0   

IBRD

     40.8         46.2         46.5         40.2         24.3         33.9   

Other

     180.6         85.8         138.6         187.8         194.9         186.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  285.3      223.5      287.3      327.7      326.0      331.9   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial Banks

  76.9      84.8      81.2      61.0      49.9      27.6   

Other Commercial

  4.0      2.1      2.1      2.1      2.1      0.0   

Bonds

  434.7      19.0      706.0      281.0      281.0      29.9   

Bilateral

  52.9      82.8      78.5      104.9      97.2      93.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  853.8      412.2      1,155.1      776.7      756.2      482.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Source: Ministry of Finance and Planning.

The following table shows the interest schedule for external debt outstanding as at March 31, 2015:

External Debt Interest Schedule

as of March 31, 2015

 

     2015      2016      2017      2018      2019      2020  
     (in millions of US$)  

Multilateral

                 

IADB

     21.9         21.3         19.8         18.1         16.4         15.5   

IBRD

     8.3         7.5         6.8         6.2         5.7         6.8   

Other

     19.2         17.9         16.1         14.9         13.2         12.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  49.4      46.7      42.7      39.2      35.3      34.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial Banks

  17.2      14.7      11.4      8.4      6.0      2.9   

Other Commercial

  1.9      1.7      1.5      1.4      1.2      0.0   

Bonds

  347.4      326.6      292.6      247.0      224.4      211.7   

Bilateral

  19.8      21.0      21.6      21.9      19.9      17.4   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  435.7      410.7      369.8      317.9      286.8      266.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Source: Ministry of Finance and Planning.

 

D-63


The following table shows the maturity structure for external debt outstanding as at March 31, 2015:

Total External Debt Maturity Structure

as of March 31, 2015

 

     Less than
1 year
     1-5
years
     5-10
years
     10 years
& over
     Total  
     (in millions of US$)  

Bilateral

     59.5         44.1         89.9         616.6         810.1   

Multilateral

     186.6         299.6         598.0         2,238.2         3,322.5   

IADB

     64.6         26.1         120.3         1,208.6         1,419.6   

IBRD

     38.3         77.5         27.8         680.3         823.9   

IMF

     45.6         178.8         358.8         —           583.2   

Other

     38.1         17.2         91.1         349.3         495.7   

Commercial Bank

     64.7         83.7         132.2         43.3         323.9   

Other Commercial

     1.7         11.8         —           —           13.5   

Bonds

     410.0         499.5         1,533.3         1,664.7         4,107.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  722.5      938.7      2,353.4      4,562.9      8,577.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Percentage

  8.4      10.9      27.4      53.3      100.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Source: Ministry of Finance and Planning.

The following table shows interest rate composition for external debt as at March 31, 2015:

External Debt Interest Rate Composition as at March 31, 2015

 

     Principal Amount
Outstanding
     Share of
Outstanding Debt
 
     (in millions of US$)      (%)  

Variable Rate Debt

     3,057.9         35.7   

Fixed Rate Debt

     5,519.6         64.3   
  

 

 

    

 

 

 

Total Debt

  8,577.5      100.0   
  

 

 

    

 

 

 

 

Source: Ministry of Finance and Planning.

 

D-64


The following table shows external public and publicly guaranteed debt (including Bank of Jamaica debt) as at December 31, 2014 and at March 31, 2015.

External Public and Publicly Guaranteed Debt (including Bank of Jamaica debt) (1)

 

    Interest     Issue Date   Final
Maturity
  Currencies   Principal
Amount
Outstanding at
December 31, 2014
    Principal Amount
Outstanding at
March 31, 2015
 
    %                 (in US$)     (in US$)  

Multilateral Organizations

           

World Bank

    Various      Various   Various   USD, JPK, GBP,
CAD, EUR
    753,813,331.0        823,909,180.0   

Inter-American Dev. Bank

    Various      Various   Various   USD, JPK, GBP,
CAD, EUR
    1,413,930,300.0        1,419,636,021.0   

Others

    Various      Various   Various   USD, JPK, GBP,
CAD, EUR, SDR
    511,913,686.0        495,734,480.0   

IMF(2)

            665,176,308.0        583,191,720.0   
         

 

 

   

 

 

 

Total Multilateral Organizations

  3,344,833,625.0      3,322,471,401.0   
         

 

 

   

 

 

 

Foreign Governments (including Original Loans and Paris Club)

  Various    Various Various USD, JPK, GBP,
CAD, EUR
  826,595,048.0      810,054,512.0   
         

 

 

   

 

 

 

Bonds (Global) USD

USD250 mn 2022

  11.625 Dec. 19,
2001
Jan. 15, 2022 USD   250,000,000.0      250,000,000.0   

USD300 mn 2017

  10.625 June 20,
2002
June 20, 2017 USD   286,000,000.0      286,000,000.0   

USD125 mn 2017

  10.625 April 27,
2004
June 20, 2017 USD   125,000,000.0      125,000,000.0   

USD300 mn 2015

  9.0 June 2, 2005 June 2, 2015 USD   262,118,100.0      262,118,100.0   

USD250 mn 2025

  9.25 October 18,
2005
October 18, 2025 USD   250,000,000.0      250,000,000.0   

USD250 mn 2036

  8.50 February 28,
2006
February 28, 2036 USD   250,000,000.0      250,000,000.0   

USD125 mn 2015

  Variable    July 2005 July 2015 USD   125,000,000.0      125,000,000.0   

USD200 mn 2015

  9.375 July 2005 July 2015 USD   19,171,858.0      4,886,144.0   

USD200 mn 2021

  8.5 Nov. 16,
2006
Nov. 16, 2021 USD   106,453,347.0      106,453,347.0   

USD125 mn 2027

  8.125 June 2007 July 2027 USD   103,887,000.0      103,887,000.0   

USD150 mn 2039

  8.0 October 11,
2007
March 15, 2039 USD   150,000,000.0      150,000,000.0   

USD350 mn 2039

  8.0 March 15,
2007
March 15, 2039 USD   350,000,000.0      350,000,000.0   

USD350 mn 2019

  8.0 June 24,
2008
June 24, 2019 USD   350,000,000.0      350,000,000.0   

USD400 mn 2019

  8.0 February 14,
2011
June 24, 2019 USD   400,000,000.0      400,000,000.0   

USD294.18mn 2024

  9.375    Nov 3, 2011 Nov 10, 2024 USD   294,180,000.0      294,180,000.0   

USD$800mn 2025

  7.625 July 9, 2014 July 9, 2023 USD   800,000,000.0      800,000,000.0   
         

 

 

   

 

 

 

Total (Global) USD

  4,121,810,305.0      4,107,524,591.0   
         

 

 

   

 

 

 

Commercial Banks

  Various    Various Various USD   351,007,175.0      323,915,716.0   
         

 

 

   

 

 

 

 

D-65


    Interest     Issue
Date
    Final
Maturity
    Currencies   Principal
Amount
Outstanding at
December 31, 2014
    Principal
Amount
Outstanding at
March 31, 2015
 
    %                     (in US$)     (in US$)  

Other Commercial (Export Credit)

    Various        Various        Various      USD, JPK, GBP,
CAD, EUR
    14,348,007.0        13,507,893.0   
         

 

 

   

 

 

 

Total

  8,658,594,160.0      8,577,474,113.0   

 

(1) LEGEND: USD = United States Dollar; CAD = Canadian Dollar; JPK = Japanese Yen; EUR = Euro; SDR = Special Drawing Rights.
(2) These are amounts disbursed under the SBA.

 

D-66


The following table shows external public direct debt as at December 31, 2014 and at March 31, 2015.

External Public Direct Debt(1)

 

     Interest     Issue Date    Final Maturity    Currencies    Principal
Amount
Outstanding at
December 31, 2014
     Principal
Amount
Outstanding at
March 31, 2015
 
     %                    (in US$)      (in US$)  

Multilateral Organizations World Bank

     Various      Various    Various    USD, JPK,
GBP, CAD,
EUR
     753,813,331.0         823,909,180.0   

Inter-American Dev. Bank

     Various      Various    Various    USD, JPK,
GBP, CAD,
EUR, UOA
     1,346,926,726.0         1,345,632,421.0   

Others

     Various      Various    Various    USD, JPK,
GBP, CAD,
EUR, SDR
     373,470,085.0         365,072,565.0   
             

 

 

    

 

 

 

Total Multilateral Organizations

  2,690,922,567.0      2,742,412,974.0   
             

 

 

    

 

 

 

Foreign Governments (including Original Loans and Paris Club)

  Various    Various Various USD, JPK,
GBP, CAD,
EUR
  485,178,071.0      468,259,137.0   
             

 

 

    

 

 

 

Bonds (Global) USD

USD300 mn 2017

  10.63 June 20,
2002
June 20, 2017 USD   286,000,000.0      286,000,000.0   

US$125 mn 2017

  10.63 April 30,
2004
June 20,2017 USD   125,000,000.0      125,000,000.0   

USD250 mn 2022

  11.63 Dec. 19,
2001
Jan. 15, 2022 USD   250,000,000.0      250,000,000.0   

USD300 mn 2015

  9.0 June 2, 2005 June 2, 2015 USD   262,118,100.0      262,118,100.0   

USD250 mn 2025

  9.25 October 18,
2005
October 17,
2025
USD   250,000,000.0      250,000,000.0   

USD250 mn 2036

  8.50 February 28,
2006
February 28,
2036
USD   250,000,000.0      250,000,000.0   

USD150 mn 2039

  8.0 October 11,
2007
March 15,
2039
USD   150,000,000.0      150,000,000.0   

USD350 mn 2039

  8.0 March 15,
2007
March 15,
2039
USD   350,000,000.0      350,000,000.0   

USD350 mn 2019

  8.0 June 24,
2008
June 24, 2019 USD   350,000,000.0      350,000,000.0   

USD400 mn 2019

  8.0 February 14,
2011
June 24, 2019 USD   400,000,000.0      400,000,000.0   

USD200 mn 2021

  8.50 September 5,
2013
November 16,
2021
USD   106,453,347.0      106,453,347.0   

USD 800 mn 2025

  7.625 July 9, 2014 July 9, 2025 USD   800,000,000.0      800,000,000.0   

Total (Global) USD

  3,579,571,447.0      3,579,571,447.0   
             

 

 

    

 

 

 

Commercial Banks

  Various    Various Various USD   195,302,518.0      176,024,515.0   
             

 

 

    

 

 

 

Other Commercial (Export Credit)

  Various    Various Various USD   1,810,431.0      970,317.0   

Total

  6,952,785,034.0      6,967,238,390.0   

 

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(1) LEGEND: USD = United States Dollar; CAD = Canadian Dollar; JPK = Japanese Yen; EUR = Euro; SDR = Special Drawing Rights, which are units of measure derived from a group of currencies which constitute the International Monetary Fund loan portfolio; UOA = Units of Accounts, which are units of measure derived from a group of currencies which constitute the Inter-American Development Bank loan portfolio; GBP = British Pound Sterling.

The following table shows external guaranteed debt as at December 31, 2014 and at March 31, 2015.

External Guaranteed Debt(1)

 

     Interest     Issue Date    Final
Maturity
   Currencies    Principal
Amount
Outstanding at
December 31, 2014
     Principal
Amount
Outstanding at
March 31, 2015
 
     %                    (in US$)  

Multilateral Organizations

                

Inter-American Dev. Bank

     Various      Various    Various    USD      67,003,574.0         74,003,600.0   

Others

     Various      Various    Various    USD,
EUR
     138,443,601.0         130,661,915.0   
             

 

 

    

 

 

 

Total Multilateral Organizations

  205,447,175.0      204,132,146.0   
             

 

 

    

 

 

 

Foreign Governments (including Original Loans)

  Various    Various Various USD   341,416,977.0      341,795,375.0   

Commercial Banks

  Various    Various Various USD   155,704,657.0      147,891,201.0   

Other Commercial (Export Credit)

  Various    Various Various USD,
CAD
  12,537,576.0      12,537,576.0   

Bonds

US$ 125 million due 2015

  Variable    July 2005 July 2015 USD   125,000,000.0      125,000,000.0   
             

 

 

    

 

 

 

US$ 200 million due 2015

  9.375 July 2005 July 2015 USD   19,171,858.0      4,886,144.0   
             

 

 

    

 

 

 

US$125 million due 2027

  8.125 June 2007 June 2027 USD   103,887,000.0      103,887,000.0   
             

 

 

    

 

 

 

US$ 294.18 million due 2024

  9.375 November
2011
November
2024
USD   294,180,000.0      294,180,000.0   
             

 

 

    

 

 

 

Total

  1,257,345,243.0      1,234,842,811.0   
             

 

 

    

 

 

 

 

(1) LEGEND: USD = United States Dollar; CAD = Canadian Dollar; EUR = Euro.

The following table shows Bank of Jamaica debt as at December 31, 2014 and at March 31, 2015.

Bank of Jamaica Debt(1)

 

     Interest      Issue Date      Final Maturity      Currencies      Principal
Amount
Outstanding at
December 31, 2014
     Principal
Amount
Outstanding at
March 31, 2015
 
     %                           (in US$)  

IMF(2)

                 448,463,883.0         375,392,912.0   

Total

     Various         Various         Various         Various         448,463,883.0         375,392,912.0   
              

 

 

    

 

 

 

 

(1) LEGEND: USD = United States Dollar; SDR = Special Drawing Rights.

 

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Debt Service Indicators

Public sector external debt as a percentage of nominal GDP increased to 64.9% as at December 31, 2014 from 59.0% on December 31, 2013. External debt as a percentage of exports of goods and services increased to 131.8% on December 31, 2014 from 129.5% on December 31, 2013. External debt service payments as a percentage of exports of goods and services increased to 19.4% during 2014 from 15.1% during 2013.

The following table shows public sector external debt indicators as at and for the five years ended December 31, 2014.

Debt Indicators

 

     2010      2011      2012      2013      2014  
     (in millions of US$, except percentages)  

External Debt Service Principal

     265.9         677.9         565.5         584.9         927.8   

Interest

     476.7         484.4         446.4         406.5         349.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

  742.6      1,162.3      1011.9      991.3      1277.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Exports of Goods and Services(1)

  6,294.9      6,826.9      6,491.6      6,418.0      6,570.5   

External Debt Service Ratio (%)

  11.7      17.0      15.6      15.1      19.4   

Interest on External Debt/Exports of Goods and Services (%)(1)

  7.6      7.1      6.9      6.4      5.3   

External Debt Outstanding/Exports of Goods and Services (%)(1)

  133.3      126.4      113.7      129.5      131.8   

External Debt/Nominal GDP (%)(2)

  62.5      58.9      56.0