Jamaica: ...To be young, gifted and blank

BY LLOYD B SMITH:

 

ALL of a sudden, the International Monetary Fund (IMF) has become Jamaica's greatest bane. But is it? In real terms, it is supposed to be a boon if we are prepared to make the necessary sacrifices and maintain the fiscal discipline necessary to attain economic prosterity.

 

However, if a disease is to be effectively cured then while one fixes the symptoms through various prescriptions, one has to seriously deal with the cause. And I am convinced that this country's main ailment has nothing to do with inflation, a depleting Net International Reserve (NIR), a wobbling Jamaican dollar that is fast approaching J$100 to US$1, an import bill that far exceeds our export earnings, the debilitating spectre of crime and violence, waste and corruption, a savaging energy bill, or the many social ills that have caused us to descend into crass indiscipline and disorder.

That which hurts this fledgling nation most is that collectively we have failed to develop our greatest potential, which is our people. The starkest example of this is the continuing success of the tourism industry, despite an anaemic economy. In the final analysis, it is not the sun, sea and sand that make hundreds of thousands of visitors want to make it Jamaica again and again. Repeatedly, surveys have shown that it is the warm hospitality of the Jamaican people. Come to Jamaica and feel all right. Irie!

 

Yet, isn't it ironic that while we are so warm and hospitable to the tourist, we remain one of the most violent nations on Earth? Isn't this some form of schizophrenia? We kill each other daily but we smile for the tourist. Intriguingly, if we were able to solve the crime problem, tourism arrivals have the potential to move up to five million per annum, not to mention a dramatic increase in foreign direct investments. Why, therefore, do we continue to kill the goose that lays the golden egg?

 

Re-engaging the International Monetary Fund is in essence surrendering our sovereignty to a foreign entity, and we will only be able to get it back when we truly put our people first.

 

And in that context, my focus turns on the youth of this country. It is perhaps tragic that even as we bask in the seeming glory of having attained 50 years of political independence, not only are we yet to achieve economic independence but have created "a generation of vipers". This may sound silly, but I am convinced that unless we deal with the youth crisis in this country then we will never ever become truly independent, economically or otherwise. Indeed, our political independence hinges on the way we treat our youth because they are the future of this country. They are the ones who must be the producers, the innovators, the creators, the game changers, the nation builders.

 

Unfortunately, most of the crimes committed in sweet, sweet Jamaica are by young men, many of whom are uneducated and unskilled. Sadly, there is a disconnect between them and us. "Di yout pon di corner" who continue to lament the fact that "nutten nah gwan" are angry and oftentimes hungry young men who are totally disenchanted with the system.

 

Let's face it, this country has a great number of young persons out there who have the potential to become useful and happy citizens. Jamaicans are a very talented people. Any country our size that can produce a Bob Marley and a Usain Bolt should not be taken for granted. The tragedy is that because of the failure of our politics, there are thousands of Jamaican youngsters in our midst who are young, gifted and blank. They cannot read and write, they have no marketable skill, they are plagued by a sense of hopelessness and have very little faith or confidence in the future. Practically every day, a young man dies in this country, and any nation that keeps killing off its young men will never be able to create the environment in which Vision 2030 can become a reality. Incidentally, how many of our young people are aware of this national objective and have bought into it?

 

We have failed to exploit 'Brand Jamaica' in the positive way we should, because we continue to be a nation of samples, talk and no action. Is it that youth heeds nothing? Too much lip service is being paid to our young people. Yes, it may well be argued that there are many success stories with respect to our youth, but aren't they more the exception than the norm? Sometimes when I watch TVJ's School Challenge Quiz, I am struck by the ease with which students can answer questions relating to foreign topics, including identifying outstanding individuals as against relating to local figures and institutions. Our young people for the most part have foreign minds and foreign tastes. Most of our most qualified youngsters migrate, the average youth in the ghetto has no clue about what is going on around him or her. During a job interview I asked this young man the following questions: "Do you read?" "No." "Do you watch or listen to the news?" "No, sah. Me lissen to Beenie Man and Bounty Killa." Enough said.

 

Their mode of dress, the way they speak, their body language and just about everything about them reflects an alien culture.

 

Recently, Finance Minister Dr Peter Phillips declared that after the IMF obligations and other major housekeeping matters have been met, education will take top priority with respect to budgetary allocation. It's a pity we did not take such a stance from 1962. Today, we would have been the better for it. After all, education is about youth. In this vein, the Ministry of Youth and Culture has its work cut out for it. God help us!

 

Lloyd B Smith is a Member of Parliament and Deputy Speaker of the House of Representatives. The views expressed are his own and do not necessarily reflect those of the People's National Party.

lloydbsmith@hotmail.com

February 26, 2013

Jamaica Observer

Bahamas Blog International

Value Added Tax (VAT) and The Bahamas: ...Moody's International Credit Rating Agency has assigned value-added tax (VAT) a credit positive ...and estimates it could account for a third of The Bahamas' government revenue by 2016

Moody’s assigns VAT credit positive

Moody’s projects new tax could make up third of govt revenue by 2016, serving as ‘significant catalyst’ in economic reform effort

BY JEFFREY TODD
Guardian Business Editor
jeffrey@nasguard.com
Nassau, The Bahamas

An international ratings agency has assigned value-added tax (VAT) a credit positive and estimates it could account for a third of government revenue by 2016.

Moody's official assessment, released yesterday morning, found that VAT will likely be revenue neutral in the first one or two years. The government recently announced it would implement the tax by July 2014. This delay in revenue is due to a large set of zero-rated or tax-exempt goods and services, according to the report, and the elimination of other taxes such as select excise duties and business licensing fees.

"Fiscal revenue gains will become apparent as the VAT system matures," Moody's stated.

"We estimate the gross contribution of VAT revenue will expand to six percent of GDP annually by 2016. This will be a significant catalyst for the government's fiscal consolidation efforts."

Indeed, other countries in the region with VAT systems in place, such as Barbados, Belize and Jamaica, report overall fiscal revenue contribution of about 30 percent, or around eight percent of GDP.

"The ultimate effect of tax reforms, including the VAT, on The Bahamas' creditworthiness will depend on the government's willingness and ability to embed them in a broader fiscal strategy that also begins to reign in the government's current expenditure commitments," the report continued.

Moody's explained that the government's tax base currently stands at less than 20 percent of GDP, which is small compared to other countries in the region. The ratings agency referred to trade-related customs duties as "volatile", and yet it made up 50 percent of the total revenue in 2012.

Most significantly, it noted that this revenue source will likely "shrink" as duties are phased out with World Trade Organization (WTO) ascension.

Moody's also highlighted the "significant tax concessions" in tourism. As a result, this area accounts for only 10 percent of fiscal revenues.

In his mid-year budget communication yesterday, Prime Minister Perry Christie hinted that these concessions could be scaled back as part of the government's aggressive strategy to right the economy.

Last year, according to the government, trade tax made up 9.3 percent of GDP. Property tax accounted for just 1.4 percent, tourism-related taxes 2.1 percent and non-tax revenue 1.4 percent.

"Other tax" made up 4.1 percent, bringing the total revenue composition to less than 20 percent of GDP.

"The VAT is a key element of a broader set of structural reforms introduced this year to expand and diversify the tax base. The reforms reflect the government's commitment to fiscal consolidation," the report said.

Interestingly, the ratings agency made no mention of the government's plan to bring the tax on board by next year. The Christie administration has been criticized for assigning an overly ambitious timeline, most recently by the Council for Concerned Bahamians Abroad.

James Smith, a former minister of state for finance, emphasized yesterday that VAT is not a new idea for The Bahamas. The first study, he said, was conducted in 2002 with the International Monetary Fund (IMF).

"It would appear starting fresh you would need more time. But a lot of the ground work has already been done," he told Guardian Business.

Of all the reforms introducing by Prime Minister Perry Christie in recent times, Smith said VAT is the most significant.

"It's something we have never done before, where we expand tax to cover services. For us, I think it is a dramatic change," he added.

February 26, 2013

thenassauguardian

Bahamas Blog International

Bahamian banks react to data breach... ...thieves may have infiltrated an international acquiring company located somewhere in the Caribbean... ...Sensitive information for clients across the region could have spilled into the hands of criminals ...although there have been no major reports of fraud

Banks react to data breach

Commonwealth Bank and Bank of The Bahamas join Fidelity in reissuing credit cards, as financial institutions monitor client transactions closely

BY JEFFREY TODD
Guardian Business Editor
jeffrey@nasguard.com
Nassau, The Bahamas

Another financial institution has pulled the trigger on the partial reissuing of credit cards as the possibility of a major data breach sinks in.

Following an assessment of the risk, Commonwealth Bank Limited (CBL) is considering whether to send out 5,000 new credit cards to its clients, a process that could take up to three weeks.

Ian Jennings, the president of CBL, confirmed that some clients have already received new cards.  He said that a decision will be made soon on whether to commence a mass reissuing.

Sources close to the matter told Guardian Business that Bank of The Bahamas (BOB) is also reissuing cards.  Paul McWeeney, the managing director at BOB, did not respond to request for comment before press time.

On Tuesday, Guardian Business exclusively revealed that thieves may have infiltrated an international acquiring company located somewhere in the Caribbean.  Sensitive information for clients across the region could have spilled into the hands of criminals, although there have been no major reports of fraud.

Anwer Sunderji, the CEO of Fidelity Bank (Bahamas), said all Bahamian banks have been compromised and the institution chose to replace its cards as of late last week.

Indeed, financial institutions in The Bahamas don't appear to be taking any chances.

"As a matter of precaution, we are reissuing cards to our customers and notifying those that may have been breached," Jennings said.  "It is an expense in terms of manpower.  The cost of plastic is low.  It is the process and getting them out as quick as we can that is costly.  It will take up to three weeks to get them out."

Jennings told Guardian Business that it's a precaution CBL must take given the circumstances, noting that "you don't want that kind of exposure".

Managing Director of Scotiabank (Bahamas) Kevin Teslyk said yesterday that the breach appears to stem from a missing data tape or device from an office in Barbados.

He stressed that the bank employs very sophisticated monitoring software and preventative techniques.  Since the missing tape, the alert has not been escalated, although the bank will continue to monitor the situation over the coming days and weeks.

"If things change we'll handle it on an individual level, and if need be, to a greater extent if necessary," he added.

Wendy Craigg, governor of the Central Bank, confirmed that the risk could be "material".  The Central Bank was first informed of the incident by a domestic institution last week.  Over time, it became apparent that other banks were compromised and the replacement of cards would be necessary.

"As a regulator, we are always concerned about operational risk issues, and certainly one such as this could be material.  Our approach has been to contact all our domestic licensees, especially those issuing Visa Debit cards, to assess the extent of the breach," she said.  "We have determined that banks which processed transactions through the affected service provider were already alerted to the breach, and we are following up the matter to assess any possible exposure."

The governor applauded the response of banks thus far to protect their clients, pointing out that the breach is not just impacting The Bahamas.

Other entities within the Caribbean and elsewhere utilize the affected service provider.

For his part, Jennings told Guardian Business that there is very little that can be done about these data breaches.  Customers should always be careful with their card usage, he said, and during this time clients must be especially attentive.

February 22, 2013

thenassauguardian

Bahamas Blog International

Sir Hilary Beckles, Principal of the Cave Hill Campus of the University of the West Indies (UWI) ...wants Caribbean Community (CARICOM) countries to begin efforts aimed at seeking some form of reparation from Western countries ...for slavery

UWI principal wants CARICOM to seek reparation for slavery

The New York Carib News



GEORGETOWN, Guyana, CMC – Principal of the Cave Hill Campus of the University of the West Indies (UWI), Sir Hilary Beckles, wants Caribbean Community (CARICOM) countries to begin efforts aimed at seeking some form of reparation from Western countries for slavery.

Speaking at the first of a series of lectures to commemorate the 250th Anniversary of the 1763 Berbice Slave Revolt, Sir Hilary said an ongoing discussion was needed to address the issue and called for an “informed and sensible conversation” on what has been described as the, “Worst Crime against humanity”.

The lecture titled, “Britain’s Black Debt: reparations owed the Caribbean for Slavery and Indigenous Genocide”, examined the damage done and wealth created through the slave trade particularly by Britain. Sir Hilary said out that reparation is not about people getting handouts, but about repairing historical damage and how to find a way forward.

He said that while all races experienced some form of slavery, African slavery was unique in its scope and brutality. Comparative studies note that it was the only system of slavery in which people were viewed legally as property and seen as non- humans.

African slavery was also unique in that it reproduced itself, meaning the children of slaves were born as slaves, they had no rights, and females in particular were seen as the prefect property since their offspring would add their value.

Sir Hilary said landmark cases such as the 1781 Zong Massacre in which 350 slaves were thrown to sharks after the ship’s captain went off course, helped to shape the discussion on the legality of slavery.

He said the issue of slavery has in recent years been viewed as a crime against humanity and these types of crimes have attracted calls for reparation for victims, in various forms.

He cited the case of Haiti noting Western countries had no qualms about requesting and obtaining compensation. Haiti had to pay, from 1825 to 1922, 150 million gold francs to France after its slave population fought and successfully gained its freedom.

Sir Hilary argued that Haiti has never been able to recover from that payment, which was needed for it to gain international recognition.

Sir Hilary urged Caribbean countries to emulate the position adopted by the Jews who were prosecuted during the Second World War and have since organised the Jewish Reparation Fund.

He said that through meticulous research, the organisation has been able to garner financial support for its claims against several countries for atrocities committed against Jews. These funds have been used to enhance the State of Israel in various means.

Sir Hilary said that countries such as the United States, Canada, Japan and New Zealand have put measures in place as part of their efforts to give reparation to indigenous peoples or war victims, yet there has been no similar move by CARICOM on behalf of its people.

He said the benefits accrued to many of the now powerful Western nations through slavery have been documented and accepted, citing the cases of the aristocracy in England, the Lloyds and Barclays’ banks which built massive fortunes through their involvement with the slave trade.

Yet many of these same countries have not been willing to offer any apologies for slavery, but instead have grudgingly given “expressions of regret”, an acknowledgment that falls short of an apology,” Sir Hilary said.

He said CARICOM has to come together to find a way to address the issue, one which will lead to peace, justice, reconciliation and future harmony.

February 13, 2013

The New York Carib News

Bahamas Blog International

The Rule of Law in the Turks and Caicos Islands

By David Rowe
Caribbean Journal - Op-Ed Contributor





In a political blast that threatens to cause a constitutional crisis in the Turks and Caicos Islands, the current Premier, Dr Rufus Ewing, has asked Her Majesty’s Government to recall Governor Ric Todd, Attorney General Huw Shepheard and CFO Hugh McGarel Groves.

This development is the most recent in a sequence of historic constitutional developments in the Turks and Caicos. But there has been serious corruption in the Turks and Caicos, and any potential recall of the Governor would simply not help in resolving these longstanding problems.

The Turks and Caicos had its 2006 constitution suspended in August of 2009, when the United Kingdom resumed direct control over the Turks and Caicos in response to widespread allegations of serious government corruption.

The UK’s Foreign and Commonwealth Office reviewed a Commission of Inquiry led by Sir Robin Auld, who had documented widespread government corruption among government officials including Turks and Caicos Islands Premier Michael Misick.

This is not the first time that the British had imposed direct role as they had done so in 1986, although it was later restored two years later.

Michael Misick resigned after the Auld Commission of Inquiry accused him of corruption and he was later asked by the Turks and Caicos’ newly-formed Special Investigation and Prosecution Team to surrender to the police for questioning.

Misick failed to surrender, however, and after a sojourn in a series of Latin American countries, was later arrested in Brazil after he was made the subject of an Interpol international arrest warrant.

The SIPT investigators who are seeking to question Missick have charged at least 12 other individuals, including five former Cabinet Ministers, on corruption-related charges.

In related circumstances, the SIPT reached an agreement with Sandals Resorts International, by which the company paid $12 million US dollars to the government.

The British Foreign Office introduced a new Turks and Caicos constitution in 2011.

The new constitution ultimately restored representative government to the Turks and Caicos with a local Cabinet, Ministers and a House of Assembly consisting of 15 elected members, chosen democratically in a vote in November 2012.

That election saw the return to power of the Turks and Caicos’ Progressive National Party, which won 8 of the 15 seats.

Earlier this month, however, one of the seats was declared vacant because of a successful election petition. A by-election is pending which could lead to a change of government next month.

In Ewing’s letter seeking a recall of the Governor and other officers. He suggested that “justice is for sale,” under the guise of plea-bargaining.

Dr Ewing specifically referred to well-known expatriate developers who had, in his opinion, secured their freedom from prosecution, both by monetary exchange under the guise of “Civil Recovery”, and by providing evidence against accused local politician “co-conspirators.”

In his letter to the Foreign Office, Dr Ewing implicitly suggested that there was a violation in the Rule of Law in the way in which the Constitutional Rules were being interpreted in the Turks & Caicos.

Professor AR Dicey, the British scholar famous for his jurisprudential theory, says that no one is above the Rule of Law, and he points out that the Rule of Law strengthens democracy.

Of course the Turks and Caicos is still a British Overseas Territory, and ultimately the Rule of Law will have to be determined by the UK’s Foreign and Commonwealth Office.

The Rule of Law dictates that the British Administration should be fair to all defendants both local and expatriate. But the allegation that “justice is for sale” should, at all costs, be disproven.


David P Rowe is an attorney in Jamaica and Florida and a law professor at the University of Miami School of Law in Coral Gables, Fla.

February 14, 2013

Caribbean Journal

Bahamas Blog International

The Bahamas Government is proposing to implement a Value Added Tax (VAT) on July 1, 2014

Gov't Targets 15% Vat From July 1, 2014

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

 

THE Government is proposing to implement a Value Added Tax (VAT) on July 1, 2014, at a rate of 15 per cent, the Minister of State for Finance said yesterday, adding that the hotel industry would be subject to a lower 10 per cent rate.

Venezuela Debates Currency Devaluation while Impact Remains Unclear

By Ewan Robertson:



Mérida, 11^th February 2013 (Venezuelanalysis.com) –

There has been much debate in Venezuela over the causes and likely consequences of last Friday’s currency devaluation, while the concrete political and economic impact remains to be seen.

The Venezuelan government’s decision to devalue the Bolivar by 32%, from 4.3 to 6.3 Bolivars to the dollar, was a measure seen as inevitable by many economists after the Bolivar fell to under a quarter of its official value on the black market.

Alongside the decision, the fifth devaluation since currency controls were introduced in 2003, the government also announced the establishment of a new body to oversee the allocation of dollars to citizens and businesses.

Analysts in Venezuela have argued that the political impact of the devaluation will depend on the success of the media campaigns of both the government and the opposition, which are attempting to communicate their interpretations of the currency adjustment to the country.

However, economic factors will also determine the political impact of the devaluation, such as its effect on imports and domestic production, increases in inflation and prices, and complimentary government measures such a rise in the minimum wage and the effectiveness of price controls.

Opposition criticisms

The opposition has launched a campaign maximising the possible negative effects of the devaluation, partly in an attempt to erode support for Vice President Nicolas Maduro in the event of fresh presidential elections if Hugo Chavez is unable to continue in office on health grounds.

Ramon Aveledo of the opposition MUD coalition blamed the government for the devaluation, saying, “It’s due to the government’s irresponsibility and worrying incoherence”.

Opposition leaders and supporters alike nicknamed the move a “red” or “Cuban package” in an attempt to associate the devaluation with an IMF-style neoliberal structural adjustment package.

Julio Borges, a leader of right-wing party Justice First, said of the devaluation: “The only ones affected are the Venezuelan people, from whose pockets the government keeps taking money”.

He pointed to a rise in inflation and prices over the last two months, blaming this and the devaluation on high public spending. “Now they [the government] are going to make us pay for the consequences oftheir inability, waste and poor administration,” he declared.

A short-term rise in inflation is possible after the devaluation, because imports will be more expensive, with a concomitant effect on prices. On the other hand, since so many imported products are sold at prices that reflect the black market exchange rate, which is unlikely to change as a result of the devaluation, inflation might not rise much after all.

However, while sources such as Reuters have described a “spike” in annual inflation to 22.2% so far this year, a rise in inflation during and after the Christmas period is not unusual in Venezuela, and annual inflation is still below the annual rate experienced a year ago.

Government stance

Meanwhile, the government has highlighted the possible benefits of the devaluation, such as bringing in more oil revenue for social spending, helping boost domestic production, and potentially combating capital flight.
Foreign minister and former vice president Elias Jaua argued that the adjustment was made necessary due to the activities of a “speculator class” within Venezuela, who acquire dollars at the official exchange rate and then use those dollars for black market sale or to sell imported products at black market prices.

As such, Jaua defended the devaluation and the establishment of the government’s new currency exchange body as combating speculation and capital flight.

He also described the measures as part of “economic actions taken to protect our wealth in currency exchange, avoiding that it falls into the torrent of capitalist voracity, and to preserve our monetary resources for the sustainment of our socialist system of social benefit that our President Chavez has been constructing”.
Economist and pro-government legislator Jesus Faria further argued that the devaluation would make imports more expensive and exports cheaper, thus making domestic production more competitive.

He said that before last Friday’s devaluation there had existed “an exchange rate lag produced by the excessive cheapening of imports and the over-pricing of exports, which had to be corrected”.

US economist Mark Weisbrot also predicted the devaluation would have a positive impact. “The devaluation…by making imports more expensive [will] provide a boost to import-competing industries. For this reason, and because it reduces the black market premium and reduces capital flight, the move will overall be good for the economy,” he wrote.

Accusations that the devaluation represents an IMF-style “package” were widely dismissed outside opposition circles given that the move was not accompanied by any measures associated with neoliberal economics, such as privatisations, salary freezes, or the removal of subsidies.

However there have been criticisms of the move from within the pro-Chavez camp, where some activists have argued that currency devaluations contradict the movement’s political economy and that other measures could have been taken to address speculation on the Bolivar.

Leftist political scientist Nicmer Evans said that the move was “not very socialist”, because it is a measure “which affects the poorest and the richest equally”.

“Neither devaluation nor the Value Added Tax (VAT) are socialist measures, because they are regressive” he added on his Twitter account.

Venezuelanalysis