Jamaica Tomorrow

Report

National Planning Summit 2007

Government of Jamaica The Private Sector Organisation of Jamaica PricewaterhouseCoopers

Dear Summit Participants

Our National Planning Summit 2007 has come to an end. From all indications and discussions, the Summit was a resounding success. Based on our own interactions in specific sessions, we have successfully identified and arrived at consensus on the priority strategies for each of the seven planning themes that formed the basis of the discussions to deliver the vision of Jamaica Tomorrow. We firmly believe that through our interactive Summit, we have arrived at the end of the beginning of a broader process that will see the active management and implementation of the various plans and initiatives developed. The enclosed report summarises the outputs over the two days and will form the key input to the Chief Execution Officer in the Office of the Prime Minister to drive the implementation of the various initiatives. Invariably, a number of the goals, objectives and strategies, have been defined at a relatively high level and will require some refinement in moving forward. We look forward to continued collaboration between the Government of Jamaica and the private sector as we embark on our process of implementation and national dialogue to achieve our shared vision of Jamaica Tomorrow.

Bruce Golding Prime Minister

Christopher Zacca President, PSOJ

Table of Contents
INTRODUCTION ..............................................................................................1
Background to the National Planning Summit 2007..................................................... 1 Approach ..................................................................................................................... 1

PLANNING RESULTS ......................................................................................4

Planning Framework.................................................................................................... 4 Planning Results Overview.......................................................................................... 6

PROGRAMME PERFECTION AND F ORWARD LOOKING ACTIVITIES ......................14

Monitoring Framework............................................................................................... 14 Chief Execution Officer Roles and responsibilities.................................................. 15 Next steps and timelines............................................................................................ 16

APPENDIX 1 DETAILS OF P LANNING THEMES ...............................................17

Job Creation & Investment Promotion ....................................................................... 18 Balancing the budget / Debt reduction....................................................................... 25 Tax reform ................................................................................................................. 30 Land titling reform...................................................................................................... 35 Crime & Violence / Justice......................................................................................... 40 Education and training............................................................................................... 46 Governance / Reducing Bureaucracy........................................................................ 52

APPENDIX 2 NATIONAL PLANNING S UMMIT 2007 AGENDA ...........................57 APPENDIX 3 LIST OF ATTENDEES ............................................................... 58

Introduction
Background to the National Planning Summit 2007
The development of a strong, thriving and vibrant economy builds and strengthens investor confidence, thereby stimulating investment, which creates jobs and facilitates the implementation of supporting infrastructure, and related critical social initiatives. A key element of the way forward, was to arrive at a broad consensus between the Government of Jamaica and the private sector on the critical initiatives that will drive economic growth and sustainable development. To this end, the National Planning Summit 2007 was conceptualised and held at the Ritz Carlton Golf and Spa Resort, Montego Bay, 2 November 2007 to 4 November 2007 with a view to bring together a broad coalition of private sector leaders, public sector representatives and NGOs and achieve consensus on: A shared vision for the various planning themes identified High level plans required to bring the vision to life The specific strategies that will ensure the success of the plan.

Approach
The Summit commenced on the evening of Friday, 2 November, with an address by Dr Wesley Hughes on Vision 2030 Jamaica. The Honourable Prime Minister Bruce Golding officially opened the National Planning Summit 2007 on Saturday morning, 3 November. This was followed by an address by Christopher Zacca, President of The Private Sector Organisation of Jamaica outlining the private sectors position on the imperatives to deliver economic growth and development. Appendix 2 provides the detailed Agenda of the Summit.

A collaborative facilitatorled series of sessions were held with a view to: Achieving consensus on all outcomes of the process

Plenary Session 1
Summit opening Consensus on planning themes for discussion Assignment of breakout groups

Breakout Session 1
Review of discussion paper Assessment of current situation Development of goal statement

Breakout session 2
Development of objectives Identification of critical success factors and barriers

Breakout session 3
Definition of strategies Establishment of priorities Documentation of deliverable

Plenary Session 2
Consensus on strategic priorities for related planning themes Summit close

Ensuring full participation by the broadest possible cross section of participants. Master facilitator Michael Wilkinson and lead facilitator Bill Olsen, led the group of over 100 participants in a plenary session to agree on the themes for discussion at the Summit. With an initial starting point of seven themes, the plenary group, through a process of brainstorming and consolidation, arrived at a final suite of planning themes as follows: Job creation/investment promotion Balancing the budget/Debt reduction Tax reform Land titling reform Crime, violence and justice Education and training Governance/reducing bureaucracy. Participants were assigned to breakout groups based on their interest and/or expertise. In breakout groups, participants received a brief presentation from the Subject Matter Expert who had prepared a discussion paper for the purpose. Participants then discussed the issues, and through a facilitated process developed consensus on the following: The issues and challenges underlying the current situation Specific Goal statements, viz the broad, long term aim in the planning theme area Objectives the specific, quantifiable, realistic targets that measure the accomplishment of a goal over a specified period of time Critical success factors, being the key conditions that must be created to achieve one of more of the objectives Barriers the existing or potential challenges that hinder the achievement of one or more objectives
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 Strategies the broad activities required to achieve an objective, control a critical success factor or overcome a barrier. Priorities the strategies of highest importance to be started first (typically due to impact, first-win potential or sequencing). The breakout groups convened in a plenary session where, using a consensus-building process, all participants were allowed to evaluate the strategies and priorities developed by the various groups and provide input to the final selection of priority strategies.

Planning Results
Planning Framework
The National Planning Summit 2007 was executed in a logical planning framework that recognised the larger body of work currently taking place for the development of an overall strategic framework in the creation of Vision 2030 Jamaica as a national development plan. Through a collaborative process, seven key planning themes were identified by The Private Sector Organisation of Jamaica that would form the basis for driving economic growth and development in Jamaica. Within the overall 2030 Vision of Jamaica, the place of choice to live, work, raise families and do business the National Planning Summit was crystallised on the basis of the seven key themes.
Governance Crime & Violence Tax reform Job creation & investment promotion Land titling

Education & Training Balancing the budget/Debt reduction

The planning themes by their nature, support the overall 2030 vision on a number of bases: Direct themes that directly fuel economic growth and development Indirect themes that provide an enabling environment to deliver economic growth, such as legislative reform, human and social capital issues.

The graphic below identifies the relationship between the various planning themes and the elements of the Vision 2030 which they support:

Supporting element of Vision 2030 Planning themes Environmental Management & Planning

Social Development

Economic Development

Governance

Job creation & investment promotion Debt reduction

Tax reform

Land reform / titling

Crime & Violence / Justice

Education & Training

Governance

Planning Results Overview

For each of the seven planning theme areas, the planning diagrams on the following pages provide the: Goal Specific objectives1 Critical success factors and barriers Strategic initiatives Priorities. Appendix 1 provides additional details of the seven themes.

In some instances, the objectives do not include specific targets and timeframes. It is anticipated that these will be developed in the course of implementation. 6

Planning Theme Job Creation & Investment Promotion

Critical Success Factors

Investor friendly environment Project Development (Execution) Expertise Wide awareness of Jamaica s value in the targeted market places as an investment destination Perception of safety and peace High awareness of local providers Access to capital

Objectives Goal
To create a stable environment which provides opportunities for investments, both local and foreign, thereby providing meaningful employment & wealth creation for all citizens Increase the number of net start up businesses by X% by 20XX Reduce unemployment by X% per year Increase Jamaica s share of targeted global market to X% by 20XX Increase absorption rate into local economy to X% by 20XX Increase foreign and local direct investment by X% Increase GDP per capita by X% in 2 years Reduce the number of people below poverty line to X% by 20XX

Strategies / Initiatives
1. Aggressively target specified local & international investors 2. Create a one-stop agency of government for all government approvals 3. Create a venture capital fund 4. Develop a Business to Business (B-B) marketing campaign 5. Create incentives for targeted sectors 6. Create tax incentives to attract both local and foreign investments 7. Create a central directory of all goods and service providers 8. Implement legislative framework for Jamaica as an Off Shore financial centre

Barriers
High energy costs Perception of unavailability of qualified workers and acceptable goods and services Poorly configured financial structures (taxes etc)

Priorities
Create a one-stop agency of government for all government approvals Implement legislative framework that will facilitate Jamaica becoming an Off Shore financial centre

Planning Theme Balancing the Budget/Debt Reduction

Critical Success Factors

Timely and accurate information Political will Expenditure management Accountability Tax reform (bring in informal sector) GDP growth Relatively stable exchange rate vs. CPI Public sector reform Reducing cost of corruption Budget process Divestment of public enterprise

Objectives Goal
To achieve a sustainable, balanced budget allowing the fiscal flexibility for growth-generating public and private capital and social investment Reduce budget deficit as a % of GDP to . Reduce total debt to GDP ratio to 92% in 5 years and 64% in 10 years Reduce ratio of debt service to total expenditure to 45% in 5 years and 34% in 10 years Reduce recurrent expenditure as a % of revenue to 80% in 5 years and 70% in 10 years Reduce debt in non-going concern public sectors bodies to . Increase REAL per capita GDP to US$5,000 in 5 yeas and US$X,XXX in 10 years 1. 2. 3.

Strategies / Initiatives
Get low cost multilateral financing Simplify and enforce tax act(s) to increase revenue Divest non-core assets and outsource non-core activities to reduce expenditure 4. Pass and enforce fiscal responsibility Act 5. Reduce exposure to variable rate debt 6. Enforce modernised procurement regulations strictly 7. Communicate with stakeholders to build political will and accountability 8. Rationalise public service and introduce performance based evaluations to increase efficiency and reduce expenditure 9. Improve budgetary process and implement accrual accounting 10. Prioritise capital investment to growth -inducing infrastructure

Barriers
Social dislocation Corruption W aste Infrastructure needs Labour laws W orld economic conditions Natural disasters

Priorities
Simplify and enforce tax Act(s ) to increase revenue Rationalise public service and introduce performance based evaluations to increase efficiency and reduce expenditure

Planning Theme Tax Reform

Critical Success Factors

Achieve cross- party political consensus Ensure sufficient political and administrative capacity Engage in public education programme to achieve buy-in Request amendment of Common External Tariff/W orld Trade Organisation regime Independent incentive study

Goal
A tax system which: Promotes economic growth and acts as a catalyst for development Is characterised by simplicity, equity and competitive rates Is administered in an efficient and effective manner

Objectives
Increase compliance rate by 10% per annum to a targeted rate of 85% Generate tax revenues from new investment relative to GDP from 20% to regional benchmark standard in 5 years Increase regional competitiveness as measured by tax rates no higher than 70 th percentile of main Caricom partners in 5 years Reduce and maintain ratio of tax administration cost to tax revenue at or below international benchmark Reduce dollar value of non-threshold exemptions annually

Strategies / Initiatives
1.Develop a road map with a view to achieving national consensus on tax policy through public consultation 2.Develop and implement amnesty and voluntary tax compliance to raise revenues 3.Determine technical and administrative resources required to achieve objectives and negotiate bilateral agreements to allow change in tax policy 4.Update data and models from 2004 analysis to develop new tax policy for implementation

Barriers
Failure to negotiate bilateral agreements Failure to eliminate corruption Inability to satisfy special interests Risk of social instability Absence of political will Inability to obtain data to model forecasts Cost of implementing change process

Priorities
Update data and models from 2004 analysis to develop new tax policy for implementation Develop a road map with a view to achieving national consensus on tax policy through public consultation

Planning Theme Land Titling Reform

Critical Success Factors

A vailability of surveyors to develop cadastral maps Enhanced institutional capacity Stakeholder buy-in Public education Rationalisation of state functions Rationalisation of subsidies

Objectives G oal
T o establish a national land use plan and formalisation of land ownership to promote social and economic development Inventory of all lands in 2 years Development of land use database in 2 yrs 90% of all parcels registered in 10 years Containment of squatting imm ediately and regularisation of informal settlements in 10 yrs Development of a national housing policy in 18 months Creation of a dynamic and efficient land market in 5 years 1. 2. 3. 4. 5. 6. 7. 8. 9.

Strategies / Initiatives
Enhance institutional capacity Rationalise state functions to achieve efficiency Reform legs., regs. and tax regimes to expedite processing Consult stakeholders in policy development to achieve buy-in Implement transparency and accountability in all programmes Communicate programmes to the public Develop cadastral maps to facilitate planning Rationalise subsidies to benefit the maximum # of persons Create community -based tribunals to establish land ownership

Barriers
Cost and complexity of land transactions Lack of funding for programmes D isputed land tenure Lack of transparency Lack of stakeholder buy -in

Priorities
Achieve stakeholder buy in through consultation in policy development and development & implementation of effective public education. Enhance institutional capacity to facilitate development of land use database and inventory of land.

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Planning Theme Crime & Violence / Justice

Critical Success Factors

Political will Effective & accountable police force Accessible, efficient & responsive justice system

Strategies / Initiatives Objectives

Reduce murder by at least 10% per year over 5 years 1. Implement appropriate recommendations of the M cM illan report with emphasis on: Raising of standards for recruitment and training, professional development & remuneration of the police force Introduction of new legislation to establish m echanism for the removal of unprofessional police officers 2. 3. Establish an oversight committee made up of members of civil society that will com municate with the M inistry of National Security and Justice and assist with the im plem entation of the Crime Plan Collaborate with the M inistry of Education and the M inistry of N ational Security youth training and social programs e.g. expansion of Cadet and Scouting in schools and churches, introduction of national parenting programs, monitoring of music, movies and television programs, compulsory military training Expand rehabilitation programs for offenders M ake the court system more efficient through the reduction of of fenses which require court appearances Establish national finger print register

G oal
To restore public confidence in institutions of justice and provide substantially improved security for all

Increase clear up rate by at least 10% per year over 5 years Reduction in time to settlement by 10% Eliminate police extrajudicial killing Reduction by at least 10% per year in crime against person Clear backlog of cases in justice system in three years

4. 5. 6.

Barriers
Lack of political will Bureaucratic impediments Absence of national consensus Competition for limited resources Libel law s M anagement capacity of the police force

Priority
Implem ent appropriate recom mendation of M cM illan report Establish oversight com mittee m ade up of m embers of civil society

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Planning Theme Education & Training

C ritica l S u c cess F a cto rs

Inc rea se d p a re ntal in vo lve m e nt P o litica l c o m m itm e nt, o w n e rship a nd b u y-in, a d eq u a te fund ing Im p ro ve d sta nd ard s in sc ho o ls Im p ro ve d s cho o l in frastructu re A d o p tio n o f ap p ro p riate a nd flex ib le te a c hing m etho d s Inc rea se d a nd im p ro ved te a c h e r train in g Intro d uc e p erfo rm a nc e re la ted p a y fo r te a ch e rs

O b jectiv es G oal
A c hie v e e q uity, q u ality and a cc o unta b ility in the ed uc atio n a nd training syste m , a nd full alig n m e nt w ith n atio n al d e velo p m e nt go als X % o f p rim ary sc ho o l co ho rts a chie vin g gra d e 4 m a stery in lite rac y a nd nu m e ra c y b y 2 0 X X X % o f se co nd a ry s c ho o l co ho rts gra d u atin g w ith X p asse s in se co nd a ry s c h o o l ex a m s includ in g M athe m atics and E n g lish Incre a se % o f Ja m aica n w o rk fo rc e w ith w o rk fo rce tra inin g a nd c ertific atio n

S tra teg ie s / In itia tiv es

P rop e rly d ep lo y ed u c atio n ta x into a na tio n al e d uc atio na l tru st fund , in a d d itio n to ann u al re c urre nt b ud ge t E stab lish a n atio nal p a rentin g p o licy and p ro gra m m e to e nh a nc e ho m e / sc ho o l p artne rship sup p o rt E stab lish le a d ership a nd go v erna n c e p ro gra m m e in vo lvin g the p rivate se cto r E stab lish a n atio nal e d uc a tio n al in sp e cto rate to e stab lish, m o nito r a nd e n fo rc e sta nd ard s, a nd lin k p a y to p e rfo rm a nc e R egister a nd lic e ns e all te a c he rs to m o nito r a nd g u id e o n-go ing p ro fe ssio n a l d ev elo p m e nt D e velo p fo rm al p ub lic / p riv ate p a rtn e rs hip s to p ro vid e fund ing to ed u c atio n and training s yste m In tro d uc e sp e cialise d tea ching m etho d s fo r b o ys a nd girls to im p ro ve the ir su c ce ss rates

B a rriers
G o v ern an c e and in stru ctio nal lea d ers hip H o m e / s cho o l p a rtn e rship sup p o rt S c ho o l culture , en viro n m e nt a nd te a c h er tra inin g L ac k o f fu nd in g

P rio r ity
E sta b lish a n atio na l p are ntin g p o lic y a nd p ro gra m m e to e nh a n c e ho m e / sch o o l p artnership sup p o rt. E sta b lish a n atio na l ed uc atio n al insp e cto rate to esta b lish, m o nito r a nd e n fo rc e stand ard s, and link p a y to p erfo rm a n c e.

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Planning Theme Governance/Reducing Bureaucracy

Critical Success Factors

Cost effective, efficient client-centered public service supported by an integrated ICT framework Coherent policy framework supported by appropriate legislative, regulatory and institutional mechanisms Rigorous and consistent enforcement of the law

Objectives Goal
Public and private collaboration for a citizenfriendly country where there is transparency, accountability, respect for the law and opportunities are available for all. Increase ranking in Doing Business in Jamaica by X% Increase satisfaction levels of citizens through citizen surveys published periodically Reduce crime and violence by X% over X years Improve court case disposal rate by X% per year

Strategies / Initiatives
1. 2. 3. 4. 5. 6. Target strategic high impact and/or potential self-financing public agencies for modernization Rationalise public sector agencies to eliminate duplication Dedicate a team to review existing legislation Develop and pursue a risk-based management approach to public sector governance Employ a zero tolerance approach to enforcement of laws and regulations Report waivers and special favours granted by Ministers to Parliament and publish the report

Barriers
Political ambivalence Vested interests in maintaining the status quo M istrust/lack of trust Lack of resources/domination of debt burden Energy costs Inflexibility of employment conditions

Priority
Target strategic high impact and/or potential self-financing public agencies for modernization Report all waivers and special favours granted by M inisters to Parliament and publish report Develop and pursue a risk based management approach to public sector governance

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Programme Perfection and Forward Looking Activities

Monitoring Framework
In order to ensure that the strategies under the various themes are appropriately managed and delivered, a monitoring framework has been developed which contemplates an overall governance structure and a single point of accountability for the implementation of the projects. The framework includes the following principal elements: Establishment of a Monitoring Board: o o o Appointed by the Honourable Prime Minister in consultation with the private sector and comprised of less than ten members With participation from both the Government of Jamaica and the private sector Charged with the following responsibilities: Monitor the progress of project implementation and serve in an advisory capacity to the Chief Execution Officer Clear roadblocks as necessary Ensure integration of the programme with broader national plan Establishment of a Programme Management Office in the Office of the Prime Minister: o o Headed by the Chief Execution Officer Charged with the following responsibilities: Drive project implementation Report on project progress to the Monitoring Board.
Monitoring Board
Responsible for Monitoring implementation of projects

Programme Management Office headed by Chief Execution Officer

Responsible for Driving project implementation

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Chief Execution Officer Roles and responsibilities

The Chief Execution Officer (CEO) will lead the implementation of the agreed-on projects arising from the National Planning Summit. The CEO will be charged with the responsibility and will be held accountable for the implementation of the various projects. The key roles and responsibilities of the CEO are listed below: Act as the implementing agent for the Office of the Prime Minister Review and rationalise the projects arising from the National Planning Summit Develop detailed project implementation plans with: o o Appropriate timelines Preliminary budgets and resource requirements appropriate to the specific needs of the project (such as establishment of committees and the constitution of same, arrangements for seconded resources from the private sector or Government, use of specialist external resources, etc) Identification of dependencies Measurable and tangible benefits anticipated to be derived from the project

o o

Develop an appropriate and cost effective administrative and other supporting infrastructure to allow the efficient and timely delivery of the suite of identified projects Liaise with the OPM and the Monitoring Board as appropriate to clear existing or emerging roadblocks impeding project implementation Provide routine reports to the Monitoring Board and OPM on the status of project implementation Liaise with the Planning Institute of Jamaica and other planning authorities to ensure integration between the projects scheduled for implementation and the broader national development plan Identify and evaluate appropriate mechanisms and timing for private sector involvement during project execution, such involvement including but not limited to establishment of joint ventures, sale/divestment of Governments interest etc Identify and incorporate with the approval of the Monitoring Board, into the overall execution plan, new projects that may emerge to support the originally identified project suite or as new stand-alone projects
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 Hand over project to appropriate agency of Government or private sector entity to ensure on-going operational control once complete Provide central point for communication, discussion and co-ordination between OPM and key stakeholders to lead the process of a national dialogue around the planning themes and the initiatives identified.

Next steps and timelines

The table below sets out the agreed immediate next steps and the timeline for each:
Activity Document results of the National Planning Summit and distribute to all Summit participants Identify, engage and name the Chief Execution Officer Identify and appoint the Monitoring Board Report to the Government on the rationalization of strategies and priorities Prepare and deliver first 30-day report of the Monitoring Board Primary Responsibility PricewaterhouseCoopers Honourable Prime Minister Honourable Prime Minister Chief Execution Officer Monitoring Board Deliverable date 15 November 2007 30 November 2007 30 November 2007 15 December 2007 30 January 2008

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Appendix 1 Details of Planning Themes

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Job Creation & Investment Promotion

Situational Context2 Recommendations made by the private sector over recent years and which, in the view of the private sector, represent the most attractive and immediate opportunities for generating jobs and economic stimulation in the country were presented. The four opportunities presented are summarised below: Developing Kingston as a major disbribution/logistics/freezone and light manufacturing hub of the Americas. The Americas as a region includes over 40 countries with a population in excess of 770 million people. The region experienced an average GDP growth rate of approximately 3.5% in 2006. In the Caribbean, ports have been expanding and improving their facilities to capitalise on the growing trade, with particular focus on developing cargo hubs for north-south and east-west trade. Establishing a distribution hub in Jamaica will be attractive to companies worldwide for the following reasons: Close proximity to North, South, and Central America; the Caribbean and the Panama Canal Fuel, time and cost savings through enhanced efficiency of routing Stable Government with a very open and democratic track record Port of call for major shipping lines Extensive experience with operation of containerised cargo transhipment port An abundance of English speaking, trainable workers Technologically advanced particularly in communications technology Established direct sea cargo links to ports throughout the World Established direct air links to airports throughout the Caribbean, North America, and Europe Free trade agreements with most countries in the Americas.

Extracted from the Position Paper presented by Mark Myers 18

Assuming that the approximately 100 acre Tinson Pen site is fully developed as a distribution/logistics facility it is estimated that 2500 jobs can be created. Job creation in the freezone could be in excess of 2500 in the early development.

Developing Montego Bay as the business, shopping and entertainment playground of the Americas Montego Bay The complete resort now has the tremendous opportunity to expand into the Business & Entertainment Playground of the Americas provided that the vision is bought into and the necessary components are put in place. Montego Bay is ideally located and does have some of the components already in place. In particular some of the critical pieces of the puzzle include: A modern airport that can act as a Hub for airlines traversing the Americas Five star hotels that have some of the most beautiful sun sea and sand vistas in the world Some duty free shopping outlets already catering to overseas visitors Interesting tours and attractions. Other components now being implemented or planned in preparation for implementation include: The road infrastructure between Falmouth and Montego Bay The Bogue main road entering Montego Bay from the west A stand-alone Convention Centre which will allow Montego Bay to attract the very lucrative meetings and convention business A recreational park which is planned for the Old Hospital Site on the Hip Strip along Gloucester Avenue In order to earn the title of the business and entertainment playground of the Americas however there are some other components which need to be and can be put in place within three to five years. These include: A new town centre which includes Free Zone shopping, a new modern office complex with high end shopping, dining and entertainment venues intermixed with office towers. A link via rail from this area (which is adjacent to the Cruise Ship Pier) to the Appleton Estate as a major attraction would cater to both cruise ship and land based visitors.
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 The establishment of a permanent entertainment venue such as at Catherine Hall would add the necessary icing on the cake. The job generation capacity of this development will be significant both directly and as a catalyst for the expansion of the tourism industry opening up the lucrative South and Central American markets. It is estimated that over 5,000 jobs will be created by this development.

Developing Portmore as the ICT financial back office center of the Caribbean The most significant opportunity is for Portmore to be the ICT centre of the Caribbean. This requires the collaboration of the private and public sector. Portmore has the assets of location, population that is highly educated and the basic infrastructure that is conducive to the development of this industry. The Factories Corporation has the land and the beginnings of a major ICT centre in Naggo Head with one existing 50,000 square foot facility that is fully occupied. Assuming that an additional 200,000 square feet of space is developed in Portmore, it is estimated that 3,000 jobs can be created by this development.

Developing Jamaica as an off-shore financial centre The leading international financial centre (IFC) is London. Much of the business of Cayman, Bahamas and BVI is actually to facilitate Londons business. Caribbean Offshore financial centres (OFC) are thus merely a small piece of the puzzle in the recycling of the worlds money, dependent for their success in the very competitive world environment on getting the balance of regulation right. The typical Caribbean OFC benefits from the marriage of its offshore business viz private banking and high end tourism. Montego Bay would seem ideal for this venture. In the opinion of international consultant Sam Lohman, who was involved in the BVIs success in this area, and who did a study on Jamaicas potential for what was then JAMPRO, in many ways, Jamaica is one of the most ideal locations in the Caribbean for such an industry. The paper presented information on the Irish International Financial Services Centre highlighting the background to its establishment and the critical success factors which include: Market-driven product development Prime Ministerial leadership Private sector driven legislation
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 Target corporations which are international market leaders Importance of being a gateway Clear cost advantage Double taxation agreements As part of the redevelopment of downtown Kingston, a Jamaican International Financial Services Centre (JIFSC) could be situated in downtown Kingston, driving development in general and jobs in particular. This would help satisfy the pressing need in Jamaica to generate employment opportunities, particularly in the financial services field to offset the trend of emigration of our highly educated graduates and financial experts. Within this context the Job Creation and Investment Promotion Team developed the following Goal, Objectives, Critical Success Factors, Barriers and Strategies.

Goal To create a stable environment which provides opportunities for investments, both local and foreign, thereby providing meaningful employment and wealth creation for all citizens.

Objectives Increase the number of net start-up businesses by X% by year 20XX Reduce unemployment by X% per year Increase Jamaicas share of targeted global market to X% by 20XX Increase absorption rate into local economy to X% by 20XX Increase foreign and local direct investment by X% Increase GDP per capita by X% in 2 years Reduce the number of people below the poverty line to X% by 20XX.

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Critical Success Factors and Barriers Critical Success factors Investor friendly environment Project Development (Execution) Expertise Wide awareness of our value in the targeted market places as an investment destination Perception/reality of safety and peace High awareness of local providers Access to capital Barriers High energy costs Perception of unavailability of qualified workers and acceptable goods and services Poorly configured financial structure to support businesses

Strategies The following strategic initiatives were identified towards achievement of the objectives for job creation/investment promotion: Government at highest level to aggressively target specified local & international investors to convince them as to the benefits of investing in Jamaica Create a one-stop agency of government to process all government approvals within 90 days Create an appropriate funding structure (venture capital fund) for financing business start-up Develop a Business to Business (B-B) marketing campaign to target specified targeted sectors and companies Create incentives for targeted sectors (tourism, ITC, International Financial Services, Music, Creative and Cultural Incentives, Free Zones & Port Services, Value Added Agriculture) Create tax incentives to attract both local and foreign investments to achieve agreed national goals Create a central directory of all goods and service providers (providers must be certified by the appropriate authority)

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 Implement legislative framework that will facilitate Jamaica becoming an Off Shore financial centre

Priorities The Job Creation/Investment Promotion team established the following priorities from the list of strategic initiatives in the previous section: 1. Create a one-stop agency of government to process all government approvals within 90 days 2. Implement legislative framework that will facilitate Jamaica becoming an Off Shore financial centre

Job Creation and Investment Promotion Team The Hon. Edmund Bartlett The Hon Dr. Kenneth Baugh The Hon. Clive Mullings The Hon. Mike Henry The Hon. Olivia Babsy Grange The Hon. Michael Stern Omar Azan Edward Chin-Mook Peter Espeut Mrs. Camille Facey Kavan Gayle Robert Gregory David Hall Mark Hart Mrs. Audrey Marks Douglas MacMahon Minister of Tourism Minister of Foreign Affairs and Foreign Trade Minister of Mining and Telecommunications Minister of Transport & Works Minister of Culture, Sports and Information Ministry of Commerce & Technology Jamaica Manufacturers Association Small Business Association of Jamaica C-CAM Cable & Wireless JCTU Jamaica Trade & Invest Digicel Hart Group Paymaster Tavistock Group

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Peter McConnell Clyde McKenzie Roy Miller Mark Myers Milverton Reynolds Mrs. Michelle Rollins Robert Russell Patrick Wong Christopher Zacca

Worthy Park Estates Entertainment Advisory Board Jamaica Tourist Board Jamaica Chamber of Commerce Development Bank of Jamaica Palmyra Tourism Product Development Company KCCIC PSOJ

Facilitators: Clair-Ann Kennedy and Gordon Webster

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Balancing the budget / Debt reduction

Situational Context3 Jamaicas indebtedness is a key and severe limiting factor in our collective desire to achieve developed nation status by 2030. Balancing the countrys fiscal budget is a necessary structural objective required for a credible debt reduction plan that includes measures to improve tax revenues and contain expenditure growth. If we are to achieve developed nation status in just over two decades, it is imperative that the genesis begins in 2008. Since independence, Jamaica has experienced fiscal deficits in 35 of its 44 years. Significant factors influencing this indebtedness include: The financial sector crisis in the 1990s and subsequent bail-out The continuing build-up in our Net International Reserves since the mid-1990s Capital intensive, loss-making entities under government control. At the beginning of 2007, Jamaicas total debt was $926 billion with internal debt of $537 billion and external debt of $389 billion. By the end of this fiscal year, 2007/08, Jamaicas national indebtedness will likely top one trillion dollars J$1,000,000,000,000). The international standard for measuring indebtedness is a countrys debt-to-GDP ratio. Jamaicas debt-to-GDP at the beginning of 2007 was 136%. Accordingly, the success of our debt reduction plan should be measured by the reduction of our debt-to-GDP ratio. Jamaica is not alone in the magnitude and growth of its sovereign debt problems. Research conducted indicates that 14 Caribbean nations are among the 30 most indebted countries, with seven having the undesired distinction of falling in the Top 15 - Belize, Dominica, Grenada, Guyana, Jamaica, Antigua/Barbuda and St. Kitts/Nevis. All these countries reported Debt-toGDP ratios exceeding 90%. Jamaica at 136% currently ranks 4th in the world behind Lebanon, Japan and Seychelles. On the other hand, Trinidad and Barbados, both with investment grade ratings for their debt instruments, have 2006 ratios of approx. 37% and 87% respectively.

Extracted from the Position Paper prepared by Donovan Perkins 25

The negative impact of this growing indebtedness has manifested itself in several ways that have had both short-term and long-term negative effects. The debt represents claims on current and future tax receipts, thereby creating an environment characterised by: Vulnerability to shocks High domestic interest rates and the crowding out effect Competition for scarce resources by GOJ ministries Shift from real investments to financial investments by the private sector Inevitable under-investment by GOJ in capital and social infrastructure leading to lower productivity levels and un-competitive businesses and industries Resource constraints create short-term focus on month-to-month survival and less focus on long term strategies to grow the economy A lack of confidence in the future.

Key factors to achievement of debt reduction/developed nation status are: 1. Eliminate fiscal deficit 2. Grow the economy 3. Expand the tax base 4. Re-focus Government on core functions 5. Treasury management 6. Re-build confidence

Within this context the Debt Reduction team developed the following Goal, Objectives, Critical Success Factors, Barriers and Strategies.

Goal To achieve a sustainable, balanced budget allowing the fiscal flexibility for growth-generating public and private capital and social investment

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Objectives Reduce the budget deficit as a % of GDP to. Reduce total debt to GDP ratio to 92% in 5 years and 64% in 10 years Reduce the ratio of debt service to total expenditure to 45% in 5 years and 34% in 10 years Reduce recurrent expenditure as a % of revenue to 80% in 5 years and 70% in 10 years Reduce debt in non-going concern public sectors bodies to. Increase REAL per capita GDP to US$5,000 in 5 years and US$X,XXX in 10 years

Critical Success Factors and Barriers Critical Success factors Achieve cross- party political consensus Timely and accurate information Political will Expenditure management Accountability Tax reform (bring in informal sector) GDP growth Relatively stable exchange rate vs. CPI Public sector reform Reducing cost of corruption Budget process Barriers Social dislocation Corruption Waste Infrastructure needs Labour laws World economic conditions Natural disasters

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Strategies The following strategic initiatives were identified towards achievement of the objectives for debt reduction: Get low cost multilateral financing Simplify and enforce tax Act(s) to increase revenue Divest non-core assets and outsource non-core activities to reduce expenditure Pass and enforce fiscal responsibility Act Reduce exposure to variable rate debt Enforce modernised procurement regulations strictly Communicate with stakeholders to build political will and accountability Rationalise public service and introduce performance based evaluations to increase efficiency and reduce expenditure Improve budgetary process and implement accrual accounting Prioritise capital investment to growth-inducing infrastructure.

Priorities The Debt Reduction team established the following priorities from the list of strategic initiatives in the previous section: 1. Simplify and enforce tax Act(s) to increase revenue 2. Rationalise public service and introduce performance based evaluations to increase efficiency and reduce expenditure

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Balancing the budget / Debt Reduction Team Senator the Hon. Donald Wehby Colin Bullock Keith Collister Dora Currea Jeffery Hall Patrick Hylton Christopher Levy The Hon. William McConnell OJ Donovan Perkins Richard Powell Joseph Taffe Everton McDonald Minister without Portfolio in the Ministry of Finance and the Public Service Ministry of Finance and the Public Service PSOJ IDB, Washington Jamaica Producers Jamaica Bankers Association Jamaica Broilers PSOJ / Lascelles DeMercado Pan Caribbean Merchant Bank Victoria Mutual Building Society PSOJ / GraceKennedy Financial Services PricewaterhouseCoopers

Facilitator: Alok Jain

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Tax reform
Situational Context4 The present administration has stated that Jamaica needs strong, sustained levels of economic growth to create jobs, reduce poverty, raise living standards and pay down the national debt. In their estimation a critical element in the process to achieve this transformation is tax reform. Among other things they seek to [e]mbark on a comprehensive tax reform programme designed to simplify the tax system, make it more equitable, remove disincentives to investment and job creation and ensure greater compliance. Similarly, the independent Caribbean Policy Research Institute (CaPRI) has stated that until Jamaica reins in its deficit, its economic growth will remain sluggish; simplification of the tax system and unification of rates across commodity categories and tax entities will increase the efficiency of tax collection by eliminating opportunities for avoidance and evasion thus providing a part of the solution to the deficit problem. CaPRI has also expressed the view that the size of the informal economy is not only underestimated but it has the potential to limit the countrys productivity levels any plan [to address the problem of continuous low growth and low productivity levels] must include a properly crafted set of government policies that restructure and formalise the incentive schemes within the informal economy. Fortunately, a comprehensive review of Jamaicas tax system was last undertaken just a few short years ago in the period 2003 to 2004 by a GOJ sponsored committee chaired by businessman Joseph M. Matalon. That committee worked along with a team of technical consultants headed by Professor Roy Bahl of Georgia State University in the USA. Among other things they produced a proposed package of reforms for consideration by Government in their Final Report of the Tax Policy Review Committee to the Government of Jamaica November 30th 2004 (the so-called Matalon Report.)

Extracted from the Position Paper prepared by Richard Chen 30

Unfortunately, despite its acceptance by the previous administration, many of the reforms proposed in the Matalon Report have to date not been implemented even though the Tax Policy Review Committee clearly stated: The reform package presented should not be considered simply as a menu of reform options from which preferred positions may be selected. Rather, the committee wishes to emphasise that in making its recommendations, the impacts in terms of economic effects, burden distribution, equity etc. have been measured based upon the outcome of the recommended package as a whole and given the interaction of all proposed measures. Any changes which government in its wisdom may deem appropriate should therefore be measured in the same light if the hoped-for internal consistency of the tax system is to be preserved. What we advance as a policy position is largely a summary of some of the more salient points in the Final Report of The Tax Policy Review Committee. We have also added a few suggestions which we believe are in keeping with the criteria used by the Tax Policy Review Committee in measuring the efficacy of any proposed reform. Those criteria are: Revenue performance Distribution of tax burden Coverage of the tax base (horizontal equity, fairness) Economic incentives, competitiveness, and growth effects Administrative efficiency and compliance cost. The Government of Jamaica imposes a wide range of taxes on income, consumption, and property. The question of who bears the final burden of a tax? is a fundamental one. Any tax will cause individuals and firms to change their behaviors, and the resulting changes in product and factor prices will affect the incidence, or the distributional effects, of the tax. Although there is wide agreement about the incidence of some taxes, such as excise or individual income taxes, the incidence of other taxes remains controversial. Even so, several basic principles of tax incidence should be kept in mind. Vertical equity is defined by reference to the effective rates of tax on total income paid by individuals at different levels of income. Jamaicas current system of individual income taxation may be described as progressive because effective tax rates increase gradually from 0%, for those individuals whose incomes fall below the income tax threshold, to rates approaching the statutory rate of 25% at the highest income levels.

31

Horizontal equity on the other hand is defined as the extent to which equally situated individuals (individuals of broadly similar total incomes) pay approximately the same amount of tax. The system of non-taxable allowances under the individual income tax is an example of one of the existing features of the tax system which gives rise to horizontal inequity. Individuals earning identical levels of wage income can suffer significantly different rates of tax depending upon their ability to negotiate such allowances with their employers, or depending upon the particular industry in which they happen to work. The report on Taxation and Economic Efficiency in Jamaica presents a quantitative economic model used to determine the macroeconomic impact of tax reforms in Jamaica. The current results suggest that simply increasing rates under the existing tax structure will produce a low tax yield and high efficiency costs. Although taxpayers are impacted in any scenario, the tax burden can be mitigated by improving tax compliance and by eliminating several pre-existing tax distortions. Within this context the Tax Reform team developed the following Goal, Objectives, Critical Success Factors, Barriers and Strategies.

Goal A tax system which: Promotes economic growth and acts as a catalyst for development Is characterised by simplicity, equity and competitive rates Is administered in an efficient and effective manner

Objectives Increase compliance rate by 10% per annum to a targeted rate of 85% Generate tax revenues from new investment relative to GDP from 20% to regional benchmark standard in 5 years Increase regional competitiveness as measured by tax rates no higher than 70th percentile of main Caricom partners in 5 years Reduce and maintain ratio of tax administration cost to tax revenue at or below international benchmark Reduce dollar value of non-threshold exemptions annually.
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Critical Success Factors and Barriers Critical Success factors Achieve cross- party political consensus Ensure sufficient political and administrative capacity Engage in public education programme to achieve buy-in Request amendment of Common External Tariff/World Trade Organisation regime Independent incentive study Barriers Failure to negotiate bilateral agreements Failure to eliminate corruption Inability to satisfy special interests Risk of social instability Absence of political will Inability to obtain data to model forecasts Cost of implementing change process

Strategies The following strategic initiatives were identified towards achievement of the objectives for tax reform: Develop a road map with a view to achieving national consensus on tax policy through public consultation Develop and implement amnesty and voluntary tax compliance to raise revenues Determine technical and administrative resources required to achieve objectives and negotiate bilateral agreements to allow change in tax policy Update data and models from 2004 analysis to develop new tax policy for implementation

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Priorities The Tax Reform team established the following priorities from the list of strategic initiatives in the previous section: 1. Update data and models from 2004 analysis to develop new tax policy for implementation Deliverable Revised models and data from 2004 analysis by 31 January 2008 2. Develop a road map with a view to achieving national consensus on tax policy through public consultation Deliverable Comprehensive road map on revisions to tax policy and indicative schedule of public consultation by 31 January 2008

Tax Reform Team The Hon. Audley Shaw Richard Chen Edward Khoury Brian Denning Paul Lai Joseph Matalon Milton Brady Earl Moore The Hon. Beverley Lopez OJ Wayne Cummings Minister of Finance and the Public Service PSOJ / SuperPlus Jamaica Chamber of Commerce PricewaterhouseCoopers Ministry of Finance and the Public Service ICD First Caribbean International Bank Guardian Life Insurance Peak Bottling Jamaica Hotel and Tourist Association

Facilitator:

Adrian Tait

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Land titling reform

Situational Context5 In Jamaica, citizens without land titles fall into three broad categories: Rural poor on family land Owners through unregistered informal land agreements/transactions Urban poor in informal settlements i.e. squatting The rural land market is made up of 650,000 parcels of land of which 45% have no legal title and many of the remaining 55% hold flawed titles mainly due to unrecorded arrangements.

Family Land In many rural communities parcels of land are passed down within a family, generation to generation, without formal registration of the title for the whole or the parts owned by individual members. Land is jointly inherited by the next generation. Inheritors in turn do not lose their rights through absence and resale is inhibited. In most cases, individual ownership is not in dispute and only lacks formalisation. The wide scale lack of proper registered titles has served as a hindrance to rural development.

Unregistered Transactions There is a significant market where land is subdivided, bought and sold with little regard for the legal formalities. This has been mainly due to the high demand for land coupled with the high costs and slow process associated with formal transfer. Attempts have been made to reduce transaction time and cost and there has been investment in modern technology but successive state initiatives have had very limited success. The 2005 IDB report on LAMP (Land Administration and Management Programme) estimated that the registration and titling of a modest property could amount to J$300,000.

Extracted from the Position Paper prepared by Wayne Chen 35

Informal Settlements/Squatting There are currently 595 squatter settlements of which 75% are on government lands compared to 15% on privately owned land. This suggests that it is within the governments ability to deal with the majority of the problem. Some of the highest concentrations of squatter communities were recorded in St. Andrew (16%), St. Catherine (11.6%), and Clarendon (11%). 82% of all squatter settlement are urban. If Jamaica is to pursue a developmental path that would benefit from giving its citizens greater access to credit that depends on property as collateral, then a less-costly, more efficient transfer mechanism and tax structure plus well-defined, secure, and transferable rights to land will be required. Increased tax revenue under a more formalised land tenure arrangement is often the reason advanced first for formalising land-titling arrangements. It is the excessive focus on this aspect and the high costs and complex process associated with registering titles that have acted as disincentives to formalisation. Any national initiative to implement wide scale land-titling needs to focus on the benefits but should also create a process that is simple and affordable.

Within this context the Land Reform team developed the following Goal, Objectives and Strategies.

Goal To establish a national land use plan and formalization of land ownership to promote social and economic development.

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Objectives Develop an inventory of all lands in 2 years Develop a land use database with special reference to zoning in 2 years Register 90% of all parcels in 10 years Contain squatting immediately and regularise informal settlements in 10 years Develop and implement a national housing and squatter policy in 18 months Create a dynamic and efficient land market in 5 years Establish Jamaica as a country respecting private ownership of landing 10 years.

Critical Success Factors and Barriers Critical Success factors Availability of surveyors to develop cadastral maps Enhanced institutional capacity Stakeholder buy-in Public education Rationalisation of state functions Rationalisation of subsidies Barriers Cost and complexity of land transactions Lack of funding for programmes Disputed land tenure Lack of transparency Lack of stakeholder buy-in

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Strategies The following strategic initiatives were identified towards achievement of the objectives for land titling reform: Enhance institutional capacity to facilitate development of land use database and to develop inventory of all land. This should include increasing the cadre of surveyors using local practitioners and/or through international recruitment. Rationalise state functions to achieve the efficient implementation of programmes. This should facilitate continuous update of parish development plans and development orders. Reform legislation, regulations and tax regimes to expedite processing of land transactions to include consideration of elimination of transfer tax on transactions between family members Consult stakeholders in policy development to achieve buy-in Ensure all programmes are transparent and accountable Develop and implement an effective programme to educate/inform the public of the benefits of the programmes Develop cadastral maps to contribute to a comprehensive database for planning and to support mass titling Rationalise subsidies to the sector to benefit the maximum number of persons and to enhance programme sustainability Implement community-based tribunals to establish land ownership

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Priorities The Land Titling Reform team established the following priorities from the list of strategic initiatives listed in the previous section:

1. Achieve stakeholder buy-in through Consultation in policy development, and Development and implementation of an effective programme to educate/inform the public of the benefits of the programmes Deliverable: Containment of squatting and increase in new applications for titles 2. Enhance institutional capacity to facilitate development of land use database and to develop inventory of all land. Deliverable: Development of land use database and inventory of all land.

Land Titling Reform Team Dr. The Hon. Christopher Tufton Donovan Stanberry Rowan Richards Wayne Chen Earl Jarrett Earl Samuels Mrs Marjorie Campbell Mrs Elizabeth Stair Mark Kerr-Jarrett Senator Norman Grant Gerard Johnson Minister of Agriculture Ministry of Agriculture Ministry of Agriculture SuperPlus PSOJ / Jamaica National Building Society National Housing Trust Urban Development Corporation National Land Agency Barnett Developers Jamaica Agricultural Society IDB

Facilitator:

Gwyneth Moore

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Crime & Violence / Justice

Situational Context6 Research on the relationship between crime and the economy in Jamaica found two key links. One is that crime directly retards economic growth. The second is that the high rate of violent crime, apparently connected to high levels of interpersonal trust and low levels of confidence in the organs of the state - the police and court system - heightens transaction costs and thereby diminishes economic activity. Given the apparent connection between violent crime and the loss of confidence in the state, an effective strategy to tackle crime thereby necessitates a restoration of this confidence. Sixty-two percent of respondents in CaPRIs survey on perceptions of corruption in the public sector (September 2006) believed the public sector to be corrupt. Although such a strategy could pose political challenges, its actual content has now been fairly well established in a substantial body of research. In short, we know what needs to be done. At the heart of the Jamaican crime problem are organised crime and the related high murder rate. Organised crime is the main problem because it has made a business of crime, has professionalised it, made it transnational, generated huge income streams from drug trafficking and extortion, and made the criminal networks powerful players in a number of inner-city communities in the cities and some of the major towns of the island. According to the Economic & Social Survey of Jamaica 2006, 32.5%, almost one-third, of all murders were connected to gang disputes. Moreover, the organised crime networks have formed alliances with selected politicians and have become important players in local and national politics. They use their money and power to corrupt critical institutions of the country, including the very police force that is supposed to repress them. CaPRIs own survey on corruption in the public sector (September 2006) showed that 81% thought the police force was corrupt. In short, organised crime in Jamaica demonstrates that crime pays and is a viable route to social success.

Extracted from a Position Paper prepared by CaPRI and Peter Thwaites 40

Organised crime has some common roots with violent crime. The most rigorous empirical research on the Jamaican homicide problem indicates that the key determinants of the homicide rate are: The high rate of youth unemployment (and underemployment) Inequality, which finds expression in the concentration of social problems in the so-called inner-city areas of Kingston and Montego Bay, that is, the marginalization of the urban poor. Many now lack the basic education and social skills to make them fit for employment. The ineffectiveness of the criminal justice system. The sources of this ineffectiveness vary from institution to institution, but in the case of the police, they include incapacity, incompetence and corruption. One outcome of this ineffectiveness is the low conviction rate for serious crimes, including murder. Another is the low level of confidence in the institutions - which in turn becomes a factor for ineffectiveness. The interactive processes involving the above factors have set in motion the vicious cycles in which we are now locked. Organised crime feeds on these three sources and processes, but in addition, it is facilitated by official corruption - primarily in the political system and the criminal justice system. It must be emphasised that the above are root causes. There are also important proximate causes that must be taken into account in completing ones understanding of the problem and thereby elaborating a response. Among these proximate causes are the attractiveness of the drug trade and access to firearms. Any response to the problem ought therefore to be informed by the above specification of the problem and should therefore include place-specific social violence prevention programmes which are designed to reduce youth unemployment in the high violence areas. This would require skills-training (including social skills) that would make youth more employable. There is an important debate as to how best to pursue this issue of dealing with the high levels of chronic youth unemployment. One line of reasoning is that the first stream of investments should be directed at upgrading the underemployed and those who are already trying to help themselves and who already have the social skills, discipline and general attributes that are required for success. They would then become models for the others. The logic is clear and this may be the most sustainable approach, but it must be recognised that the crime prevention returns on this strategy are not short-term. The alternative is a more direct approach that tries to soak up the unskilled, anti-social youth who are most prone to crime. The difficulty here is that this would require great investment of state resources and may not be sustainable - that is, unless there is rapid growth in construction and other sectors of the economy that are able to absorb unskilled and undisciplined labour.
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The first approach of upgrading skills levels, will be more likely to succeed if it is accompanied by a wider, more comprehensive programme that seeks to upgrade, and better integrate selected inner-city communities, particularly those in which murder hot spots lie. Ideally, any such programme would also include de-garrisoning the inner cities. If this is agreed, than a strategy for de-garrisoning should be elaborated and an implementation plan - with key deliverables that allow for monitoring and reporting -- agreed to. In addition, tackling the crime problem will also require an acceleration of the programme of criminal justice reform. The programme of police reform is now over twelve years old, but the results are at best mixed. Better methods of bench-marking, evaluating and measuring progress, and of holding the institutional leaders to account, are needed. A similar need exists in the justice system. In 2007, the Task Force report on reform of the justice system was completed. It should form the basis of systematic corrective action. Finally, there needs to be an effective move on corruption prevention and control. The available data suggests that corruption is a major developmental problem in Jamaica, and as noted above, it is a facilitator of high-end crime. Legislation is now being drafted that should empower a new agency that would have responsibility for investigating corruption. This presents an opportunity to ensure greater effectiveness. Better coordination of the various existing agencies and improved resource allocations to these agencies are conditions for greater effectiveness. Any new arrangement should solve these problems. In summary, there are three main legs on which crime prevention and control should stand. These are inner-city upgrading and integration (including targeted youth employment); reform; and corruption prevention and control. These should have as their primary targets organised crime and the murder rate. With these in place, other supportive programmes such as community-peace-building, preventing youth and school violence, and public order initiatives that are designed to bring some discipline to the use of public spaces in the major towns, may then have greater impact.

Within this context the Crime, Violence and Justice team developed the following Goal, Objectives, Critical Success Factors, Barriers and Strategies.

Goal To restore public confidence in institutions of justice and provide substantially improved security for all.
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Objectives Reduce murder by at least 10% per year over 5 years Increase clear up rate by at least 10% per year over 5 years Reduce time to settlement by 10% within 5 years Eliminate police extra-judicial killing within 5 years Reduce crime against person by at least 30% per year Clear backlog of cases in justice system in 3 years.

Critical Success Factors Critical Success factors Effective and accountable police force Accessible, efficient and responsive justice system Barriers Lack of political will Bureaucratic impediments Absence of national consensus Competition for limited resources Libel laws Management capacity of the police force

Strategies The following strategic initiatives were identified towards achievement of the objectives for crime, violence and justice: Implement appropriate recommendations of the McMillan report with emphasis on: o o Raising of standards for recruitment and training, professional development and remuneration of the police force Introduction of new legislation to establish mechanism for the removal of unprofessional police officers

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 Establish an oversight committee comprised of members of civil society that will communicate with the Ministry of National Security and Justice and assist with the implementation of the Crime Plan The Ministry of Education and the Ministry of National Security to collaborate on youth training and social programs e.g. expansion of Cadet and Scouting in schools and churches, introduction of national parenting programs, monitoring of music, movies and television programs, compulsory military training Expand rehabilitation programs for offenders Make the court system more efficient through the reduction of offenses which require court appearances Establish national finger print register.

Priorities The Crime, Violence and Justice team established the following priorities from the list of strategic initiatives in the previous section: 1. Implement appropriate recommendations of the McMillan report with emphasis on: Raising of standards for recruitment and training, professional development & remuneration of the police force Introduction of new legislation to establish mechanism for the removal of unprofessional police officers 2. Establish an oversight committee comprised of members of civil society that will communicate with the Ministry of National Security and Justice and assist with the implementation of the Crime Plan.

44

Crime, Violence and Justice Team The Hon. Derrick Smith The Hon. Oliver Clarke OJ Ambassador Jeremy Creswell John Rapley Fredrick Moe Everton Hunter Damian Obiglio Gilbert Scott Mrs. Susan Leslie-Bailey Mrs. Lois Grant Wesley Hughes Minister of National Security Gleaner Company of Jamaica British High Commission CaPRI Montego Bay Developer National Water Commission Jamaica Public Service Ministry of National Security OPM OPM Planning Institute of Jamaica

Facilitator:

Michelle Clarke-Brown

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Education and training

Situational Context7 It is argued that economic growth and development must be built on the platform of education and skills training. This cannot be overemphasised, particularly in the climate of globalization which enshrines education in numerous commitments and international and regional trade agreements. There is a thrust toward Education For All (EFA), as captured by The Millennium Development Goals, The General Agreement on Trade in Services (GATS) and the Caricom Single Market and Economy (CSME). Over the last decade, international development and cooperation have seen education as the linchpin to achievement of sustainable development and poverty reduction. Closer to home, our Caribbean neighbours are transforming their education systems, e.g. Barbados and Trinidad, within the ambit of a CSME. With unrestricted movement of goods, services, skills and capital throughout the region, it is hoped that there will be unprecedented opportunities for new businesses and job creation. The research is unequivocal: education and training can lead to higher productivity and improved quality of goods and services. To this end, they must be deemed crucial factors to enhancing international competitiveness and fostering a climate conducive to strong and sustained economic growth. Since independence, there has been almost a frenzied movement to reform the education system with plans and programmes directed towards a well intentioned Education For ALL outcome. In this regard a number of major initiatives have been carried out including: The Programme for the Advancement of Early Childhood Education (PACE) 1980s GOJ Primary Text Book Programme (PTP) GOJ/ UK-ODA Secondary Schools Text Book Project The School Feeding Programme (SFP) The GOJ/IBRD Reform of Secondary Education (ROSE)

Extracted from the Position Paper prepared by Audrey Hinchcliffe 46

The five year plan, 1990-1995 was followed by the new five year education plan 1995-2000. Both plans did not reap the desired benefits as high absenteeism practically among boys, linked to socio-economic factors devalued the school system, leading to other interventions such as: The GOJ/DFID Jamaica All Age School Project (PEIP) (Emphasis on community/ school participation) 2000-2003. GOJ/IDB Primary Education Improved Project (PEIP) (National Assessment Programme replaced Common Entrance Examination). Grade Six Achievement Test (GSAT) (to place grade six completers into grade seven of secondary and comprehensive schools). The GOJ/USAID New Horizons for Primary Schools (to increase level of literacy and numeracy of students in 72 selected primary schools throughout the country). Despite all these interventions the education system continues to be dysfunctional. The newest initiatives are captured in the Education Transformation Task Force Report (2004) and the Early Childhood Education Development Report. And with the new administrations LEARN proposal, it is hoped that real gains accrue from revivified effort. Investment in education is important, enabling the development of each persons full potential and consequently creating a competitive workforce. Education is therefore a social indicator of a countrys economic development and the stock and quality of its human capital. The private sector being in the business of investment sees human capital no crucial to maximizing returns. Our prime concern therefore, is the calibre of output from the education system. Do they have the requisite life skills, technical and vocational skills, knowledge of organizational behavior, apt communication skills, ability to think critically, resourceful and innovative? As a goal, the education system and skills training centres must seek to reorient students to modern and relevant technology that facilitates the production of high quality service and goods. To cite the Labour Market and Productivity Task Force the 2030 vision Make Jamaica the place of choice to live, raise families, work and do business and proposes its vision as A labour market with a trained, educated, productive workforce attractive to quality job creating investments, operating in a manner that is efficient, harmonious and mutually beneficial, sustaining a prosperous society and economy. The sector plan seeks to attain this vision through inter alia: A highly qualified workforce Higher levels of human and social formation and trust; Full and satisfying employment in a thriving economy; and
47

 Innovative globally competitive enterprises. If education and training for transformation and competitiveness is to be achieved even partially over the next five years, some provocative questions will first have to be raised and discussed. The purpose of which is not to bemoan previous attempts at advancing the trajectory of the education sector but to plot a new course that attains the results we all desire for our society. The National Planning Summit is directed to questions on the key issues and challenges set out below: What is the purpose of education and who is the target group? What are the targets that explicate transformation? What does the workplace require from the education system? Should the education system produce the skills required by the workplace or should organizations take responsibility for providing workplace-specific skills?

Within this context the Education and Training team developed the following Goal, Objectives, Critical Success Factors, Barriers and Strategies.

Goal Achieve equity, quality and accountability in the education and training system, and full alignment with national development goals.

Objectives X% of primary school cohorts achieving grade 4 mastery in literacy and numeracy by 20XX X% of secondary school cohorts graduating with X passes in secondary school exams including Mathematics and English Increase % of Jamaican workforce with workforce training and certification

48

Critical Success Factors and Barriers Critical Success factors Increased parental involvement Political commitment, ownership and buy-in, adequate funding Improved standards in schools Improved school infrastructure Adoption of appropriate and flexible teaching methods Increased and improved teacher training Introduce performance related pay for teachers Barriers Governance and instructional leadership Home / school partnership support School culture, environment and teacher training Lack of funding

Strategies The following strategic initiatives were identified towards achievement of the objectives for education and training: Properly deploy education tax into a national educational trust fund, in addition to annual recurrent budget Establish a national parenting policy and programme to enhance home / school partnership support Establish leadership and governance programme involving the private sector Establish a national educational inspectorate to establish, monitor and enforce standards, and link pay to performance Register and license all teachers to monitor and guide on-going professional development.

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Priorities The Education and Training team established the following priorities from the list of strategic initiatives in the previous section: 1. Establish a national parenting policy and programme to enhance home / school partnership support. Deliverables: Policy and legislation, Monitoring / enforcement processes, Inspectorate established. Timeline December 2008 2. Establish a national educational inspectorate to establish, monitor and enforce standards, and link pay to performance. Deliverables: Policy and legislation, Standards, monitoring / enforcement processes, Inspectorate established. Timeline - April 2009

Education and Training Team The Hon. Andrew Holness Senator The Hon. Dwight Nelson The Hon. Dennis Lalor OJ Professor Gordon Shirley Donald Foster Mrs. Audrey Hinchcliffe Mrs. Lori-Ann Lyn Mark McKenzie Minister of Education Minister without portfolio in the Ministry of Finance & the Public Service ICWI University of the West Indies, Mona HEART Trust/NTA Jamaica Employers Federation Caribbean Broilers Red Stripe

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Mrs. Maria Jones Aldain Reid Professor Neville Ying Mrs. Sandra Glasgow

Ministry of Education Young Entrepreneur Association UWI MSB PSOJ

Facilitators:

Darren Singh and Marsha Caballero-Stewart

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Governance / Reducing Bureaucracy

Situational Context8 The Doing Business Project of the World Bank/International Finance Corporation (IFC) ranks 175 economies on the ease of doing business. The index means that the regulatory environment is conducive to the operation of business. With first place being the best, Jamaica ranks at number 63 in both the 2007 and 2008 report. The report tracks a set of regulatory indicators related to business start-up, operations, trade, payment of taxes, and closure, by measuring the time and cost associated with various government requirements. For instance, the study measures the number of procedures required and the time taken and the minimum capital needed for starting a business. For Jamaica, this category was the best of the 10 categories measured across all countries. Here Jamaica ranked number 9 in 2007. This presents a better showing than many developed countries. Alternatively, paying taxes was the worst category for Jamaica, placing it at number 170. This is largely due to the high percentage of gross profit paid in taxes, 49.4 percent, and the number of tax payments required within a year (72). The matter of licensing is equally of concern. In this category, Jamaica ranked at number 74 for the period of both the 2007 and 2008 index. In addition to much anecdotal evidence which can demonstrate many of the implications which challenge growth in an environment bogged down in bureaucracy, a recent Inter-American Development Bank (IDB) study also supports these findings. Research analysts at the IDB however offer an important and perhaps insightful perspective. Bureaucracy, they suggest, impose high transaction costs on business, leading to informality and anemic growth in the formal economic sector. The IDB had estimated that the informal sector accounts for about 40 per cent of the country's economic activity. According to the IDB's report, Jamaicans invest a huge amount of time and energy in tax avoidance and keeping their businesses in this grey zone.

Extracted from the Position Paper prepared by Anthony Chang 52

Against this backdrop, the IDB has recommended, among other things, the reform of the tax and financial systems, a flattening of bureaucracy and a modernization of the legal arrangements. These prescriptions are neither new nor even radical, having been repeatedly proposed in many quarters. Our governments have often declared themselves to be acting on them. What is clear, and highlighted by the IDB study, is that with the public sector accounting for 39 per cent of GDP and the grey or informal economy accounting for an estimated 40 per cent of the country's output, real expansion is being stifled by a pervasive bureaucracy. The victims are jobs and the creation of wealth. An appreciation of this should be a powerful incentive to change. Reducing bureaucracy is one of the ways by which Jamaica can achieve maximization of the countrys economic potential. There are two prongs to reducing bureaucracy: one is to reduce the practice of bureaucracy the rules, regulations and processes - by disbanding these strangulating rules and regulations. The other is to reduce and or change the behavior of practitioners of bureaucracy. Reducing bureaucratic practice is difficult because of the vested interests involved. A UK example involved cutting of departmental budgets so Ministers had no alternative but to reduce staff. A freeze on recruitment caused numbers to drop dramatically because wastage was quite high and a significant number of staff were on fixed term contracts. A starting point is a thorough top-level review of the regulatory environment by working through the statutes, and target legislation that mitigate against a successful economy. Jamaica has made significant progress in divorcing policy from service-provision especially by way of executive agencies and divestment from matters in which the Government ought not to be involved. Red Tape impacts significantly on SMEs and start-up entrepreneurs. This is the pivotal group which should be targeted as a catalyst for growth. If Jamaica is to experience further economic growth through the creation of jobs, an environment in which SMEs and start-up entrepreneurs are encouraged must prevail. Larger companies tend to have the resources and the accesses to contacts to assist with overcoming the obstacles presented by red tape, and sometimes red tape acts as a barrier to entry.

53

In a 2007 World Bank report, evidence suggests that the top 20 countries in the world regulate, but they do so in less costly and less burdensome ways. The World Bank analysis leads to three noteworthy findings: Business in poorer countries (defined as low and lower middle income economies under World Bank income classifications) faces much larger regulatory burdens than those in rich countries. They face three times the administrative costs, and nearly twice as many bureaucratic procedures and delays associated with them. Heavy regulation excludes the poor from doing business. In poorer economies 40% of the economy is informal. Women, young and skilled workers are hurt the most. This has a direct effect on job growth, and crime. The payoffs from reform appear large. A hypothetical improvement to the top quartile of countries on the ease of doing business is associated with up to 2 percentage points more annual economic growth. According to the World Bank, ease of doing business is associated with more growth, and simple business regulations translate to more human development i.e. job creation, lessening of corruptive practices, etc.

Within this context the Governance/Reducing Bureaucracy team developed the following Goal, Objectives, Critical Success Factors, Barriers and Strategies.

Goal Public and private collaboration for a citizen-friendly country where there is transparency, accountability, respect for the law and opportunities are available to all.

Objectives Increase ranking in Doing Business in Jamaica by x% per annum Increase satisfaction levels of citizens through citizen surveys published periodically Reduce crime and violence by X% over X years Improve court case disposal rate by X% per year

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Critical Success Factors and Barriers Critical Success factors Cost effective, efficient client-centered public service supported by an integrated Information Communication Technology (ICT) framework Coherent policy framework supported by appropriate legislative, regulatory and institutional mechanisms Rigorous and consistent enforcement of the law. Barriers Political ambivalence Vested interests in maintaining the status quo Mistrust/lack of trust Resources (domination of debt burden) Energy costs Inflexibility of employment conditions

Strategies The following strategic initiatives were identified towards achievement of the objectives for governance/reducing bureaucracy: Target strategic high impact and/or potential self financing public agencies for modernization Rationalise public sector agencies to eliminate duplication Dedicate a team to review existing legislation in order to rationalise and modernise the legislative framework Develop and pursue a risk-based management approach to public sector governance Employ a zero tolerance approach to enforcement of laws and regulations to rebuild trust and foster discipline. Report all waivers and special favours granted by Ministers to Parliament and publish the report

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Priorities The Governance/Reducing Bureaucracy team established the following priorities from the list of strategic initiatives in the previous section: 1. Target strategic high impact and/or potential self financing public agencies for modernization. 2. Report all waivers and special favours granted by Ministers to Parliament and publish the report. 3. Develop and pursue a risk based management approach to public sector governance. Deliverable: Modernised, high impact public agencies, operated with greater efficiency and cost effectiveness and dedicated, appropriate support from the Ministry of the Public Service and the Cabinet Office.

Governance/Reducing Bureaucracy Team The Hon. Daryl Vaz Dr The Hon. Carlton Davis OJ Mrs Hilary Alexander Miss Onika Miller Mrs Patricia McCalla Dr Leary Myers Douglas Orane The Hon. Oliver Clarke OJ Michael Bernard Dr. Jean Dixon Minister of State, Office of the Prime Minister Cabinet Office Cabinet Office Cabinet Office Office of the Prime Minister National Environment & Planning Agency GraceKennedy Limited Gleaner Company of Jamaica Shipping Association of Jamaica Ministry of Industry and Commerce

Facilitator:

Tony Lewars

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Appendix 2 National Planning Summit 2007 Agenda

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Appendix 3 List of Attendees

First Name
Bruce Daryl James Patricia Shahine Olivia Audley Donald Dwight Colin Paul Karl Michael Dr. Jean Beverly Mike Edmund Clive Dr. Christopher Donovan Rohan Dr. Kenneth Amb. Douglas Derrick Gilbert Andrew Maria Noel Dr. Carlton Onika Hillary Marjorie Robert

Surname
Golding Vaz Robertson Sinclair-McCalla Robinson Grange Shaw Wehby Nelson Bullock Lai Samuda Stern Dixon Rose-Forbes Henry Bartlett Mullings Tufton Stanberry Richards Baugh Saunders Smith Scott Holness Jones Donaldson Davis Miller Alexander Campbell Gregory

Entity Represented
Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Ministry of Information, Culture, Youth & Sports Ministry of Finance & the Public Service Ministry of Finance & the Public Service Ministry of Finance & the Public Service Ministry of Finance & the Public Service Ministry of Finance & the Public Service Ministry of Industry, Commerce & Investment Ministry of Industry, Commerce & Investment Ministry of Industry, Commerce & Investment Ministry of Industry, Commerce & Investment Ministry of Transport & Works Ministry of Tourism Ministry of Energy, Mining & Telecommunications Ministry of Agriculture Ministry of Agriculture Ministry of Agriculture Ministry of Foreign Affairs & Foreign Trade Ministry of Foreign Affairs & Foreign Trade Ministry of National Security Ministry of National Security Ministry of Education Ministry of Education Mayor - Montego Bay Cabinet Office Cabinet Office Cabinet Office Urban Development Corporation Jamaica Trade and Invest 58

First Name
Dr. Wesley Michael Grace Everton Robert Leary Damian Earl Roy Elizabeth Winston Milverton Donald Patrick Francis Jeremy Denis Marco Rosaura Jesus Brenda Christopher Earl Richard Sandra Beverley William Mark Joe Keith Godfrey Ryland Norman Omar Michael Edward

Surname
Hughes Fairbanks Munroe Hunter Russell Myers Obiglio Samuels Miller Stair Watson Reynolds Foster Wong Kennedy Cresswell Kingsley Mazzochi- Alemanni Rueda Silva Lagrange-Johnson Zacca Jarrett Chen Glasgow Lopez McConnell McKenzie Taffe Collister Dyer Campbell Grant Azan Bernard Chin-Mook

Entity Represented
Planning Institute of Jamaica Planning Institute of Jamaica Planning Institute of Jamaica National Water Commission Tourism Product Development Company National Environment & Planning Agency Jamaica Public Service National Housing Trust Jamaica Tourist Board National Land Agency Petrojam Development Bank of Jamaica HEART Trust / NTA Kingston City Centre Improvement Company Kingston City Centre Improvement Company British High Commission Canadian High Commission EC Delegation Mexican Embassy Spanish Embassy Ambassador - United States of America Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Private Sector Organisation of Jamaica Capital & Credit Group Jamaica Agricultural Society Jamaica Manufacturers Association Shipping Association of Jamaica Small Business Association of Jamaica 59

First Name
Wayne Audrey Patrick Mark Gassan Barry Milton Anthony Wayne Oliver Camille Stephen David Jeffery Mark Mark Edward Dennis Chris Lori-Ann Noel Audrey Douglas Andrew Joseph Peter Clyde Frederick Ian Earl Douglas Donovan Richard Pauline Aldain Michelle

Surname
Cummings Hinchcliffe Hylton Myers Azan Bonitto Brady Chang Chen Clarke Facey Facey Hall Hall Hart Kerr-Jarrett Khoury Lalor Levy Lyn Lyons Marks MacMahon Mahfood Matalon McConnell McKenzie Moe Moore Moore Orane Perkins Powell Reid Reid Rollins

Entity Represented
Jamaica Hotel and Tourist Association Jamaica Employers Federation Jamaica Bankers Association Jamaica Chamber of Commerce Bascho Bacam Industries Limited First Caribbean Bank Mussons Super Plus Gleaner Cable & Wireless Jamaica Pan Jamaica Investment Trust Limited Digicel Jamaica Producers Group Hart Group Barnett Developers Jamaica Observer Insurance Company of the West Indies Jamaica Broilers Caribbean Broilers Jamaica Money Market Brokers Paymaster Tavistock Group WISYNCO ICD Worthy Park Estates Entertainment Advisory Board Montego Bay Developer Adjoined Consulting Guardian Life GraceKennedy Pan Caribbean Merchant Bank Victoria Mutual Building Society Montego Bay Chamber of Commerce Young Entrepreneurs Association Palmyra 60

First Name
Gordon Peter Peter Kavan Gordon Prof. Neville Dr. John Stuart Kingsley Dora Jerry Michael William Kevin Everton Brian John Tony Alok Gordon Gwyneth Adrian Wilfred Clair-Ann Darren Marsha Michelle Arlene Orlan Delano Dorothy Pat Susan Loy Valerie

Surname
Stewart Young Espuet Gayle Shirley Ying Rapley Hart Thomas Curea Johnson Wilkinson Olsen Bandoian McDonald Denning Lee Lewars Jain Webster Moore Tait Baghaloo Kennedy Singh Caballero Clarke-Brown Nelson Simpson Seiveright Whyte Reid Leslie-Bailey Grant O'Bryan

Entity Represented
Sandals Group Cayman Islands Caribbean Coastal Area Management Foundation Jamaica Confederation of Trade Unions University of the West Indies University of the West Indies University of the West Indies Cornell University Office of National Reconstruction Inter-American Development Bank Inter-American Development Bank PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Office of the Prime Minister Ministry of Foreign Affairs

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Jamaica Tomorrow | National Planning Summit 2007

Government of Jamaica The Private Sector Organisation of Jamaica PricewaterhouseCoopers