Caribbean & Central America - November 2013 (ISSN 1741-4458)
POINTERS
*** JAMAICAN BUSINESS CONFIDENCE AT LOW POINT. In recent months we have been relatively upbeat about Jamaica, at least to the extent of opposing the view that Jamaica is on its way to becoming a failed state. The good news last month was that the International Monetary Fund (IMF) had successfully completed its first quarterly review of Jamaica’s performance under its 4-year US$944m Extended Fund Facility (EFF) arrangement. The good news from the IMF came on 30 September, and in anticipation of this, on 26 September Standard & Poor’s had raised Jamaica’s long-term foreign and local currency credit ratings to ‘B-‘ and marked the outlook as stable. The news this month, however, is that none of this has much impressed Jamaica’s business sector. On 15 October, the Jamaica Chamber of Commerce Conference Board released its 3rd Quarter 2013 Business & Consumer Confidence Indices, and this showed business confidence to be at its lowest ebb since 2009. Only twice has business confidence been lower since 2001. Headline expectations included 62% of firms saying that the economy will worsen during the year ahead, which is up from 44% in the 2nd quarter survey and more negative than at any time since the 3rd quarter of 2005. Consumer confidence was also down, with the expectations index at a decade low of 87.9.
*** IMF HAPPY WITH SURINAME. Following the conclusion of its Article IV consultation with Suriname, the IMF “welcomed Suriname’s strong growth supported by sound policies and buoyant commodity prices”. 2012 GDP growth of 4.75% was among the highest in the region. However, the lender warned that “the country’s heavy reliance on commodity exports has exposed fiscal and external vulnerabilities”. The IMF warned about the need to “build up buffers, promote fiscal sustainability, strengthen the financial sector, and enhance competitiveness”. The overall fiscal balance fell by five percentage points to a deficit of 4% of GDP in 2012, largely due to an increase in subsidies. The overall deficit for 2013 is expected to be around 3% of GDP. Public debt, however, remains low at 22% of GDP. The current account surplus declined by 1.5 percentage points in 2012 to around 4.25% of GDP in 2012 and in the first quarter of 2013 there was a deficit on the current account.
***MISICK TO BE EXTRADITED. On 29 October Turks & Caicos (TCI) Attorney General Huw Shepheard announced that Brazil’s supreme court had authorised the extradition of TCI former premier, Michael Misick (2006-2009), to face charges of corruption and mismanagement in the British Overseas Territory. Misick, who has an outstanding Interpol arrest warrant issued to his name, was arrested in Brazil in December last but was released on bail in February pending the outcome of an appeal against a refusal of his application for political asylum. When that appeal was denied in April, he was re-arrested pending extradition proceedings. In a statement Shepheard described the Brazilian court’s decision as “welcome as it is in the best interests of the TCI that allegations of wrongdoing are thoroughly investigated”. The TCI was put under direct rule from London for three years because of misgovernment and corruption with home rule restored with the November 2012 general election The day after his announcement however, Shepheard resigned, just a couple of months after the governor had extended his term to September 2016. Shepheard had been involved in an acrimonious dispute with Prime Minister Rufus Ewing of the Progressive National Party (PNP). Shepheard says that he intends to bring legal action against Ewing for damage to his reputation and other charges. Many will agree with Sharlene Cartwright-Robinson, leader of the opposition People’s Democratic Movement, who commented: “This is not a positive step for the country at this time. The Turks and Caicos is going through a very difficult time already. To add this to it…it costs us not just our reputation, it costs us financially”.
- OECS economies in need of restructuring
For some time the Inter-American Development Bank (IDB) has been flagging up the need to reduce the informal economy throughout Latin America and the Caribbean. The governor of the Eastern Caribbean Central Bank (ECCB), Sir Dwight Venner, has been adding his weight to the problem with regard to the Organization of Eastern Caribbean States (OECS). On 23 October, he was reported as saying that as much as two-thirds of the private sector in the OECS is informal and only one-third formal. He said the private sector in the OECS needs to be reconstituted so that it is “two-thirds formal”. Venner also recently criticized the OECS economies as having “overstretched governments, an underperforming private sector, and a dependent civil society”.