Senator Ruel Reid – Information Minister
Please see Cabinet decisions since the last briefing.
Cabinet has approved the following legislation for tabling in Parliament:
- The Bauxite Alumina Industries Encouragement (Amendment Act) 2019
This bill seeks to:
- Grant the bauxite sector duty concession on oil from July 1, 2018 to June 30, 2023;
- Authorise the Minister to grant, by order, a new relevant concession period subject to affirmative resolution in the House of Representatives, where the period for so doing had expired and
- Give retrospective effect to an order made under section 7 (2) of the Act.
- The Law Reform (Amendment of Penalties ) Act 2019
- The bill seeks to introduce provisions to amend several acts under the portfolio of the Minister of Justice in order to increase outdated penalties and empower the Minister to amend penalties where necessary by order, subject to affirmative resolution.
3: Signature of Sponsorship Agreement between the Government of Jamaica and Blue Minerals Ltd
Cabinet has agreed for Jamaica to act as sponsoring state for a locally incorporated subsidiary of Blue Minerals Ltd. This is in relation to its application to the International Seabed Authority (ISA) for a contract to explore polymetallic nodules in the deep seabed and subsoil, beyond national jurisdiction and the terms set out in the draft sponsorship agreement between the Government of Jamaica (GOJ) and Blue Minerals. Cabinet was advised of Jamaica’s prominent role in the development of the regime to govern the exploitation of mineral resources in the deep seabed – a decision in 1981 by the UN General Assembly to host the headquarters of the ISA in Jamaica, which was established under part XI of the UN Convention of the Law of the Sea (UNCLOS) and aimed at regulating and managing deep seabed mining on behalf of all humankind.
Cabinet also took note of the following:
- The rationale for deep-seabed mining which included the demand for global electrification, and the expected growth in electric vehicles and infrastructure to be able to meet future demand.
- With agreement for sponsorship, Blue Minerals would acquire 75,000Km2 Reserved License Area in international waters in the Pacific Ocean; conduct exploration in the Area for achieving proof of Resources nodules; acquire deep sea bed mining equipment, build an organisation and start mining activities(Nodules Collections); and generate revenue and taxable profits for Jamaica;
- The rationale for Jamaica being involved in deep seabed mining;
- Blue Minerals was a 100% Jamaican company that would own all mineral rights, all geological data and all revenue;
- Blue Mineral was regulated by ISA Regulation, the Companies Act, Blue Minerals Jamaica and the sponsorship agreement;
- The cost and benefits of Jamaica being involved in deep seabed mining;
- The World Economic Forum Meeting of January 22-25-2019
- Globally deep seabed mining was attracting enormous attention sand Jamaica as a sponsoring state would join other countries such as France Japan and Germany;
- Jamaicans would be provided with the opportunity to attend seminars and workshops overseas to be educated in the protection and preservation of the marine environment;
- The exercise would be of no cost to the government of Jamaica and investors would absorb all the costs;
- The contract with Blue Minerals would give Jamaica a means through which direct benefits could be derived;
- Once becoming a sponsoring state Jamaica would have an exclusive area in the open seas.
Cabinet approved the tabling of the following reports in House of representatives
- Broadcasting Commission 2017/18
- Rural Water Supply 2016/17
Award of Contracts
Port Royal Cruise Ship Terminal Development
Cabinet has approved the award of a contract to Orion Marine Construction for award of a direct contract in the sum of seven million, five hundred and thirty-six thousand, nine hundred and ninety US dollars (USD 7,536,990.00) to undertake the following:
Construction of Seawalk Foundation, the Storage Pile, Shore Mooring Dolphin and Timber Deck access Trestle for the Port Royal Cruise ship terminal development.
Closed User Group Solution
Cabinet approved the award of a contract to Cable and Wireless Ltd in the sum of sixty nine million, six hundred and eighty eight thousand, two hundred and one dollars and eight cents ($69, 688,201.08) for the delivery of CUG services to the Ministry of Finance and the Public Service and some of its affiliated agencies: Planning Institute of Jamaica, Tax Administration of Jamaica, Accountant General’s Dept. and Office of the Services Commission.
Greater Black River Water Supply -Luana Well Station to Middle Quarters Square Mains Replacement
Surrey Paving and Aggregate Company Ltd has been approved for the award of a contract in the sum of sixty-five million, five hundred and twenty-seven thousand, six hundred and sixty-five dollars ($65,527 665.00) from the NWC for the Luana Well Station to Middle Quarters Main replacement in St Elizabeth.
Manufacture and Delivery of Boots and Shoes to Members of the JCF
Broncho Boot Factory in Greendale St Catherine has been approved for award of a contract in the sum of seventy-five million, five hundred and ninety-one thousand, and twenty-five dollars ($75,591,025.00) for delivery and manufacture of 8,400 pairs of duty boots and shoes to be issued to members of the JCF.
Closed Harbour Beach Park Development
Cabinet approved the award of a contract by the UDC for the implementation of a Closed Harbour Beach Park Development Project in keeping with the endorsement of the NCC to M&M Construction Ltd in the sum of one billion, two hundred and ninety six million, one hundred and fifty eight thousand, eight hundred and seventy dollars and sixty four cents ( $1,296,158,870.64)
Senator Ruel Reid
Minister of Information
Hon Fayval Williams – Minister without Portfolio
Ministry of Finance and the Public Service.
Real GDP growth for the July-Sept quarter of 2018 was 1.8% when compared to the similar period in 2017. This is not a new number. Statin published it on December. What I want to draw your attention to is that this current Jamaica Labour Party administration is the only administration that has delivered 11 consecutive quarters of positive GDP growth if you look at all the administrations for the last 21 years, going back to 1997, which was the available data that could be downloaded from Statin. Additionally, the average quarterly GDP growth of 1.28% that this JLP administration has delivered is three times (3x) that of the average of the quarterly GDP of all the administrations over the same period.
Unemployment at 8.7% at October 2018 is the second lowest figure we have seen in seven (7) years. It is also approximately half the unemployment rate of 16.3% that we saw in April of 2013.
Women are experiencing the lowest unemployment rate in seven (7) years at 11.2%. This is down from a high of 21.3% in April 2013.
Men are experiencing the second lowest unemployment rate of 6.4%, down from a high of 12%, also in April 2013.
JCC’s Business and Consumer Confidence for the December 2018 quarter
Consumer confidence was at a record 175.5. This compares to 148 in the similar period in 2017. Business confidence was at 147.5 compared to a reading of 142.5 for the comparable quarter in 2017. What are these figures telling us? For businesses, the figures are saying that the companies’ willingness to invest in new plant and equipment is at the highest in the history of the survey. Companies are also expecting to increase their sales and profits in 2019. For consumers, their higher confidence is reflected both in the current economic conditions and in their expectation of more jobs being created. All this confidence is manifesting itself in credit from deposit taking institutions or banks. We are seeing strong credit growth to the business sector. We are also seeing companies access the corporate bond market through the FSC’s exempt distribution category. The latest BOJ figures showed funds raised by corporate bond through exempt distribution increased 40%. Individuals are also getting more credit from banks. Year on year, Nov 2018 versus Nov 2017, credit to individuals grew 14.6% versus 12.7%
We have seen the moves in the foreign exchange market. We would prefer you to direct all questions regarding movements to the Bank of Jamaica. As we transition the Bank of Jamaica to be an independent central bank in law and in practice, it is important that we shift questions of inflation and foreign exchange to the institution that has the authority and responsibility. This is so that the messages from the Bank of Jamaica comes to Jamaicans unfiltered by us politicians and the people of Jamaica can begin to hear the Bank of Jamaica’s voice and begin to understand that the BOJ is their central bank to whom they have access to in terms of questions of these matters.
KINGSTON, Jamaica — The Bank of Jamaica (BOJ) has announced the appointment of Natalie Haynes and E George Roper as deputy governors of the institution.
Haynes will have oversight of two newly-defined portfolios – banking, depository and currency operations and financial markets infrastructure- while Roper will manage the finance, technology and administration and the records management portfolios.
The appointments are for a five-year period commencing February 18.
Haynes, who possesses postgraduate qualifications in economics, has served the bank for more than 31 years. She has held several leadership positions and currently serves as a member of the bank’s senior management team, holding the position of division chief, banking and market operations division, said BOJ.
Meanwhile, the bank outlined that Roper, who is a Fellow of the Association of Chartered Certified Accountants, United Kingdom (FCCA) and a Fellow of the Institute of Chartered Accountants of Jamaica (FCA), is currently employed to the Bank in the capacity of Supervision Evaluation Expert with specific responsibilities for leading the National Risk Assessment (NRA) Programme being coordinated by the bank.
Before joining the bank, Mr Roper held several executive-level positions including vice president of compliance at Scotiabank Group, deputy executive director of the Financial Services Commission and president and chief executive officer of Mayo Holdings an audit, accounting and business advisory services firm.
Corruption Perception Index (CPI)
Jamaica slipped two places from 68 to 70 out of 180 countries in the latest rankings of Transparency International’s Corruption Perception Index (CPI). Jamaica ranked 70 of 180 countries with a score of 44, the same as in 2017. 100 means very clean, 0 means highly corrupt. Generally speaking, Denmark has a well-established system to deter, detect and sanction corruption. However, there are some gaps in the legislative framework, particularly in the areas of supervision of asset declaration of members of parliament, conflict of interest and lobbying, limited investigation of foreign bribery, non-transparent political financing and limited whistleblower protection, all of which cast a shadow on what is otherwise seen to be a beacon of integrity on the world stage.
Student Loan Bureau
The Students’ Loan Bureau is Jamaica’s premier student loan financing organization committed to ensuring that qualified, needy Jamaican students have equal access to financial assistance to pursue tertiary education. The SLB has been around for 48 years having begun operation in 1970, was made a statutory body in 1971 and empowered to issue loans covering a percentage of tuition fees to Jamaican students pursuing higher education at tertiary institutions.
The Bureau is able to lend because of its revolving loan scheme. Students borrow today to repay at the end of their course of study to ensure that succeeding generations of students benefit from the fund. Consequently, repayment of all loans is vital to the viability of the scheme.
More than 10,000 students apply for loans annually, and on average 99% of these are successful in accessing an SLB loan. This means that more than 9 out of every 10 students who apply for financing from the SLB are successful.
Having said all of that, you can imagine that all persons at SLB from the Board to the security personnel who are stationed at the front door or in the lobby area must be focused on the one goal, to ensure that student has access to financing for their education in a timely manner, using technology to its fullest, thus enhancing the customer experience.
So when board members wrote a letter to the Minister of Finance about governance and management issues in November 2018, that has to be taken seriously. In the end the Minister of Finance and the Public Services decided that reconstituting the board was in the best interest of good governance and published this on the MOFPS website in December 2018.
Dr. The Honourable Nigel Clarke, Minister of Finance and the Public Service has announced that a new Board of Directors for the Students’ Loan Bureau (SLB) was appointed in December, 2018.
The members of the Board are as follows:
- Mr. Nicholas Scott (Chairman)
- Mrs. Sandra Glasgow (Deputy Chairman)
- Dr. Andre Haughton
- Ms. Roxanne Miller
- Mrs. Julie Thompson-James
- Mr. Andrew Simpson
- Cllr. Andrew Harris
- Dr. Karelle Samuda
- Ms. Terise Kettle
- Mr. Timothy Wilson
- Mrs. Veronica Warmington
Minister Clarke stated that “On assuming office as Minister of Finance, all boards appointed by my predecessor were asked to remain in place.” Some members of the former board of the SLB raised concerns regarding governance and management issues within the by letter to the attention of the Minister in November 2018. On enquiry, it was evident that there was a difference of opinion on these issues within the Board. In discussions with board members, Minister Clarke decided that a reconstitution of the Board was best. Minister Clarke wishes to place on record his gratitude to the Board members who fulfilled their duty by bringing to his attention matters of concern.
The new board was appointed in December 2018 and will be charged with resolving the issues raised while ensuring that the SLB continues to fulfill its mandate in assisting Jamaicans to access quality education.
We will be meeting with the new board members this week. Reducing balance
The Reducing Balance Method is mainly used to calculate the total interest for a loan based on the outstanding loan amount after periodic repayments.
Flat Interest Rate Method a.k.a Simple Interest
This method is mainly used to calculate the interest payable for personal loans and car / hire purchase loans. You pay interest on the entire loan balance throughout the duration of the loan. Flat interest rate calculation formula can be represented like this:
Interest Payable per Installment = (Original Loan Amount * No. of Years * Interest Rate p.a. ) / Number of Installments
This is less desirable for the borrower, because even as you pay down the loan, the interest payable does not decrease.
Min of MFAFT has been quite clear and detailed in the many interviews on radio, tv and in the press conferences about exactly where we are. We have always indicated that we remain open during this period prior to tabling the legislation in Parliament to an amicable settlement.
Peter Phillips has said a range rather than a point estimate because we have not been able to meet the 9% wage/GDP target.
Dr. the Hon. Nigel Clarke, Minister of Finance and the Public Service announces the commencement of the search for a new governor of the Bank of Jamaica (“BOJ”) who would be expected to succeed Governor Brian Wynter on the completion of his term of appointment in November 2019.
Minister Clarke stated the following:
“As announced in 2017, Governor Wynter was asked to extend his appointment as Governor for a further two years, to a total tenure of ten years, in order to advance specific reforms and to play a central role in the formulation and consideration of the reform of the Bank of Jamaica Act.
He has successfully achieved the goals agreed at that time. With these achievements and the expectation of timely parliamentary approval of the legislative amendments to modernise the Bank of Jamaica Act, it is time to shift to the next phase in the leadership and governance of the BOJ.
As such, the process of identifying the new Governor, who will lead the BOJ into the next phase, has commenced. The process will take place in keeping with the principles of transparency and good governance.
To this end, Mr. David Marston, an eminent Jamaican who worked at the Bank of Jamaica prior to having a long and distinguished career at the IMF has agreed to lead a search committee comprising: Mr. David Marston (Chairman), Mr. Tony Lewars, Ms. Helene Davis-Whyte and Mr. Gary “Butch” Hendrickson that will assist me in identifying a shortlist of suitable candidates for the position from which I will make a submission to Cabinet concerning the individual to be recommended to the Governor General for appointment in accordance with the Bank of Jamaica Act.
The process will seek to identify the best-suited candidate to lead the newly modernised Bank of Jamaica in achieving its mandate to serve the interests of the people of Jamaica.”