Caribbean & Central America - March 2014 (ISSN 1741-4458

*** JAMAICA SAYS DEBT REDUCTION ON TARGET.  Jamaica’s finance minister, Peter Phillips, gave an update on the country’s economic reform programme (ERP) to stakeholders on 28 February in which he said that Jamaica’s debt-to-GDP ratio would be brought down to 139% of GDP by the year end from 147% last year.

Reporting improved growth prospects, Phillips said: “Our growth in the June quarter of last year was flat; in the September quarter…growth was around 0.5%; and for the December quarter, IMF numbers had it at 1.4%.  We expect that momentum to continue through the March quarter and we should end the fiscal year with growth somewhere between 0.7% and 1%.”

This improved outlook has been reflected in an upgrade from Fitch Ratings, which at the end of February upgraded Jamaica’s long-term foreign currency and local currency Issuer Default Ratings to B- from CCC.  The short-term foreign-currency rating was upgraded from C to B, and the Country Ceiling from B- to B.  The outlook was upgraded to ‘Stable’.

Fitch gave as its reasons for the upgrade reduced financial risk due to fiscal consolidation and the lengthening of domestic debt repayments.

*** POLITICAL DEADLOCK IN GUYANA.  Back in December we reported on the political deadlock that had prevented Guyana from passing an amended Anti-Money Laundering (AML) law that would have corrected deficiencies identified in the 2009 act by the Caribbean Financial Action Task Force (CFATF).  As a result, the CFATF issued a statement saying that Guyana had not made “sufficient progress” or complied with the Action Plan developed with CFATF.  Alarmingly for Guyana, the CFATF called upon member states “to consider implementing counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana”.

Some might have considered this sufficient to galvanize the Guyanese political classes into action.  But the December 2011 general election produced a more or less tied result, and the animosity between the government and the opposition has been too great to produce the necessary compromise.  The problem is that the electorate awarded the presidency (and thus the power to govern) to the Peoples Progressive Party/Civic (PPP/C), but the two main opposition parties – A Partnership for Unity (APNU), which is itself a coalition led by the Peoples’ National Congress (PNC), and the Alliance for Change (AFC) – have a one-seat majority in parliament.  The opposition have used this one-seat majority to prevent the passing of the Anti-Money Laundering and Countering the Financing of Terrorism (AMLCFT) Amendment Bill.

The problem now is that another deadline has passed with potentially serious consequences.  The CFATF had given 28 February as the deadline for the required changes to be implemented, after which it would recommend that Guyana’s case be submitted to the Financial Action Task Force International Corporation Review Group.  CFATF will consider this action at their May plenary session.

• Complaints of opposition tactics - The Guyanese government’s complaint against the opposition is that it dallied for the 10 months that the Anti-Money Laundering and Countering the Financing of Terrorism (AMLCFT) Amendment Bill was in parliament and then at the last moment instead of proposing changes to the amendment bill, they made proposals to amend the original 2009 act.  President Donald Ramotar summed up his view of the opposition’s tactics by saying: “What they are doing is not right; it violates parliamentary democracy because what they want to amend is not the bill that is before them but the Act that was passed unanimously in parliament in 2009.”  He added that the opposition was behaving in an “unpatriotic manner”.