Caribbean & Central America - July 2015 (ISSN 1741-4458)

*** JAMAICAN PUBLIC SECTOR WORKERS TOLD NO EASING UP. In mid-June, the International Monetary Fund (IMF) announced a successful outcome to its eighth review of Jamaica’s economic performance under the May 2013 Extended Fund Facility (EEF). The successful completion of the review enables the IMF to release a further sum of about US$40m to Jamaica.

The IMF reported that all performance criteria for end-March 2015 had been met with the exception of the central government primary balance criteria, which was narrowly missed.

The IMF reported: “Half-way into the authorities’ four-year reform program, investment and growth prospects are gradually improving. Growth is projected to approach 2% in 2015/16, as the full impact of lower oil import costs and the recovery from last year’s drought materialise, and as the improved business climate and confidence feed economic activity.” It added that inflation is at its lowest point for 50 years.

But the good report did not produce any softening from Finance Minister Peter Phillips on the subject of public-sector pay. On 16 June, he told public-sector workers that their push for a 7% pay increase could not be entertained. Phillips said: “Faced with the choices before us, it might appear to some to be far easier to listen to the voices of political expediency and make commitments to wage increases which the present level of available resources could not support. To proceed on that path, however, would only end up reversing the progress we have made and betray the trust we have built up locally and internationally.”

He added: “Jamaica is still at a fragile point, halfway through the program, and we still have a long way to go. We must maintain the momentum and do nothing to reverse or derail the substantive gains that already have been made.”

*** GUYANA FINDS CARIBBEAN SUPPORT AGAINST VENEZUELA. On 27 May, Venezuela’s President Nicolás Maduro issued a decree purporting to establish four “operational integral defence maritime and insular defence zones”. The imposition of this decree would impinge upon Guyana’s exclusive economic zone, in particular the area where ExxonMobil announced on 20 May that it had discovered a “significant” amount of oil.

Guyana has, of course, rejected this move as illegal and “a flagrant violation of international law”, and it ensured that it was high on the agenda of the Caribbean Community (Caricom) summit held at the end of the first week of July in Barbados. Guyana’s new president, David Granger, was not disappointed. Prime Minister Persad-Bissessar of Trinidad and Tobago was among the first to pledge her support.

The Trinidadian prime minister said: “Trinidad and Tobago fully supports Guyana with respect to the border dispute. We have gone a step further, we have always had discussions with Guyana and we offered to assist in any way that we can by having dialogue at the bilateral or multilateral level.” She called the decree “a violation of the rule of law”.

Maduro, who was scheduled to attend the Caricom summit, pulled out at the last moment and sent his vice president, Jorge Arreza, in his place.

*** THREAT TO BAHAMAS RATING. On 2 July the ratings agency Standard & Poor’s warned that it could lower its ratings on The Bahamas by one or more ‘notches’ as a result of the Baha Mar resort filing for bankruptcy, which could lead to a prolonged delay in the opening of the US$3.5bn resort. In an unrelated, but equally unwelcome piece of bad news for the government, murders in the Bahamas were up by 16% between 1 January and 22 June, with 72 killings this year compared with 62 in the same period last year.