Home' Trinidad and Tobago Guardian : May 18th 2017 Contents BG6 | NEWS
BUSINESS GUARDIAN guardian.co.tt MAY 18 • 2017
Paul Scott, president of the Pri-
vate Sector Organisation of Ja-
maica, is proud of the country's
economic performance over
the past five years and says
that public private partner-
ships (PPPs) have been partially responsible
for this success.
"A lot of the discipline has developed in Ja-
maica's economy from a fiscal perspective,
which has allowed the improvements to occur
and has allowed the Government to borrow
less. That has stopped crowding out the private
sector and for it to get the liquidity to do what
it needs, this has come from PPPs," he said.
He said PPPs exist in different forms in
"There are committees that exist for stake-
holders from different parts of society such as
labour unions, the private sector, public sector
and they look at different problems. A lot of
issues that now exist in Jamaica get delegated
to these types of partnerships."
For PPPs to exist, he said, there needs to be
a willingness among the private sector, labour
unions and public sector to dialogue and come
up with concrete solutions.
Speaking about Jamaica's interest rates, he
said the country had a "misguided" monetary
policy in the 1990s.
"In defending our exchange rate, we raised
our interest rates in excess of 60 per cent. We
basically bankrupted a whole generation of
entrepreneurs and financial institutions at
the same time.
"In 2009, we faced a situation: if we took a
unilateral haircut to the debt, we would have
created a wipeout of the equity of the financial
system. Our debt we have today is down to
the monetary decisions as well as the actions
of saving the banking system in the 1990s."
He said the debt holders in Jamaica did a
"In exchange for that, the creditors told
the government they would not be taking a
reduction in the value of their bonds in ex-
change for the government not adhering to the
medicine that it needed to take from a fiscal
point of view. Out of that developed a unique
PPP," he said.
The stand-off over the island's debt ex-
change led to the development of the economic
partnership oversight committee (EPOC).
"This was a partnership between the private
sector and the government and is co-chaired
by the Governor of the Bank of Jamaica (cen-
tral bank). It was made up of unions, the pri-
vate sector, the financial institutions and the
government. Its job was to ensure the fiscal
discipline that the Jamaican government com-
mitted to in the International Monetary Fund
(IMF) agreement was kept. They report to the
public quarterly. They deliver the results we
have in terms of fiscal discipline," he said.
He said this approach created a great deal
of confidence in the economy.
"For the first time, you had the bond holders
and the government holding hands going over
expenditure, revenue and other economic de-
tails on the same committee. This has changed
Jamaica's fiscal culture."
Scott said they have applied the PPP model
to the areas of Jamaica's economic and polit-
"An example is tax reforms. We also bring
PPPs to divestment. Every privatisation is set
up through one of these teams. We have PPPs
in delivering services. We see PPPs as a way
that can deliver capital to projects but it can
also deliver clear outcomes."
Scott spoke at the American Chamber of
T&T's Annual General Meeting last Thursday
at the Hilton Trinidad Hotel and Conference
Centre, St Ann's.
He was invited to speak about the turna-
round of the Jamaican economy.
According to the IMF report at the end of
2016, Jamaica has made good progress in its
IMF-supported programme which expired
Another loan of US$1.64 billion was ap-
proved from the IMF to tackle poverty, improve
living standards and create jobs.
Difficult economic history
Scott painted the picture of Jamaica being
one of the poster boys for economic failure
in the non-industrial, developing world over
the last 40 years.
He said since 1971 the Jamaican economy
grew on average 0.8 per cent and Jamaica
has lagged behind many countries and also
regional ones like Guatemala and Nicaragua.
He said Jamaica does not have oil or gas like
T&T and the bauxite Jamaica has, it has not
made best use of it.
"The Jamaican economy for my entire life
time has been just a complete and utter mess.
We have failed to deliver any development and
economic growth for our people since 1971.
I am not just exaggerating as the facts speak
"In 1971, Jamaica had 12 per cent growth.
That was super big. In the 1960s there was
huge growth. We have fallen behind many
countries in the globe with the exception of
those that have been war torn since then."
He said the one positive in Jamaica has been
the tourist industry but, despite this, past gov-
ernments have not been able to deliver growth
for its people.
"We have made considerably poor economic
choices over the last 40 years. Most of these
choices have been made in trying to fix social
inequalities that have existed but choosing
the wrong routes."
He blamed socialist policies in Jamaica since
the 1970s for some of Jamaica's problems.
"Unfortunately, I do not think we in Jamaica
got the memo in the 1990s that we should
have put socialism away and try to focus on
delivering economic growth by allowing the
private sector to do what it needs to do."
He said the role of the government is to
provide the environment for capital to feel
comfortable investing in.
"The government's role is not to be the
driver of economic growth but simply the
person that ensures that all the components
that are required for economic growth are
He said in Jamaica there are 400 posts in
state companies that are political appointees
and this must change.
"People get appointed to these boards not
for what they know, but really for who they
know. The types of boards include National
Investment Funds, airports, and other infra-
structure. So if people are appointed to these
boards based on who they know only, it is not
surprising that the outcomes are sub standard.
As a region we have to change how we deliver
services that are owned by the Government.
We cannot continue with political appoin-
tees," he said.
Jamaica's recent successes
According to the data Scott provided, Jamai-
ca's inflation rate now stands at two per cent.
"Never in my life did I think I would see
that. We have single-digit borrowing rates.
Now we have robust job creation. Three years
ago our BPO sector employed 14,000 people,
now it employs 22,000 people. We also have
enough construction contracts in Jamaica over
the next two years that will employ another
20,000 people in that sector."
He said job creation is so strong that the
worry of the Jamaican private sector is how
they will provide training for all these future
jobs that will be created.
Despite Jamaica's bright future, he warned
people about being over optimistic and think-
ing that Jamaica is now on the next side of
"We are definitely on the right road and
there is no doubt about that. But, at the end
of the day, our debt to GSP is still 118 per cent
which is way too high. Our unemployment
is still 13 per cent. And within that is 30 per
cent youth unemployment.
"We have to make sure our management of
the economy ensures that youth unemploy-
ment gets absorbs into the development of
"Although it is not as bad as before, we still
have significant crime issues in certain areas.
Our electricity cost is still very high at US$0.
20 per kilowatt per hour but it better that what
it was three years ago when it was US$0.40
per kilowatt per hour," he said.
He said Jamaica has a bright future.
"The possibilities are beyond what most
people can conceive in their minds. We are
close to the United States, we have natural
harbours, we have good port infrastructure.
We are also near to the Panama Canal. Jamaica
speaks English and has a good labour force.
Now we have something we did not have be-
fore which is confidence. Jamaica is getting
its mojo back."
He concluded by saying he cannot advise
T&T what to do as he is a foreigner but T&T
can look at PPPs as a possible way of different
stakeholders working together for solutions.
"Jamaica is in a good place today because of
the co-operation between the private sector
and the government that has led to sustainable
policies which will lead to future economic
President of the Private Sector Organisation of Jamaica.
How PPPs contributed
to Jamaica's recovery
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