JAMAICA'S NATIONAL DEBT COULD REACH US$20 BILLION BY 2030

WE NEED RADICAL CHANGES TO OUR ECONOMIC POLICIES IF JAMAICA IS TO AVOID THE DEBT TRAP ESTIMATED AT SOME US$ 20.0 BILLION BY 2030..

Most Governments around the world especially in developed countries have come to confirmed that Macro Economic Policies driven by interest rates and inflation targets are worthless in ensuring sustainable growth. We must create double digit growth rates by sending a "shock wave" through the productive sectors of our economy.

The current Macro Economic Polices of the Government of Jamaica must change radically away from interest rate and inflation targets to developing a Energy Master Plan to significantly reduce the cost of energy and more specifically cutting the cost of electricity by over 70% RIGHT NOW!

GROWTH AND ECONOMIC DEVELOPMENT MASTER PLAN

"On his 2015 visit to Jamaica President Obama and his administration took the strategic decision to license Jamaica as the first country outside the North American Free Trade Area (NAFTA) for the export of US LNG and for Jamaica to become the Hub for America's Energy Exports to Latin America and the Caribbean."

Energy is the engine for the production of goods and services across all economic sectors: agriculture, industry (mining, manufacturing), transportation, commerce, public administration, etc. It is equally vital to the provision of basic civic services (health care, clean water, sanitation, etc.), to improving access to education and, ultimately, to raising incomes.

The US$730 million plus 1,200 acres of land could have significantly transform the Jamaican economy had we invest in solar energy instead of the north-south highway link. This could have gotten us some 690 MW of electricity at a cost of US$0.06/kWh. Twice the generating capacity of JPS at a delivery cost some 85% cheaper than the current cost, creating some 110,000 jobs by 2017 adding another US$10.0 billion to our GDP.

GIVING JAMAICA A STRATEGIC ENERGY ADVANTAGE IN THE REGION

"On his 2015 visit to Jamaica President Obama and his administration took the strategic decision to license Jamaica as the first country outside the North American Free Trade Area (NAFTA) for the export of US LNG and for Jamaica to become the Hub for America's Energy Exports to Latin America and the Caribbean."

Linking the Obama Energy Agreement with the development of the Hydrothermal Vents as a source of renewal energy for the Caribbean and Latin America could open up an Energy Market worth over US$3.0 trillion if linked to the North American Grid. Lifting millions out of poverty by 2030.

The dream of energy independence for the Northern Caribbean nations of Jamaica, Cayman, Cuba, Haiti, Bahamas and the Dominican Republic have gotten a huge boost with the discovery in 2010 of several super-heated undersea hydrothermal vents in the Mid-Cayman Trough between Jamaica and Cayman Island. For Jamaica this find is significant; having perhaps the highest energy cost in the world and struggling with a huge national debt, this is a dream come through.

However, Jamaica's economic and energy needs are no different from her Caribbean neighbors and with a combine population of some thirty four (34) million people, million could be lifted out of poverty in less than fifteen (15) years to attain develop nation status by 2030. The strategic importance of the hot vents and the potential to harness some fifty two (52) gigawatts of energy will significantly boost the economic standing of the  entire Caribbean Region. 

To this extent Jamaica and her neighbors must invest approximately US$131 billion in their energy infrastructure over the the next fifteen years or US$9.0 billion annually, according the table (No.1). Jamaica alone must invest annually some US$700,000,000.

Based on forecasted electricity consumption by 2031 comparable to Germany's current energy consumption used as a benchmark, the demand for Northern Caribbean countries excluding Puerto Rico is estimated at thirty gigawatt (30 GW).
The Proposed Trans-Caribbean Hydrothermal Power Plant and Undersea Transmission Cables is estimated to cost some US$140 billion with a capital investment structure of some US$34 billion in private equity over an investment cycle of twenty (20) years with a Net Present Value (NPV) of US$4.4 billion and an Internal Rate of Return (IRR) of 24% from revenue generated on a base electricity cost of US$0.05/kWh.

The hydrothermal energy find will boost Jamaica's economic standing and strategic position in the region a position it had lost some three decades ago and is now tittering on the brink of bankruptcy under it's IMF loan obligations.More importantly the location of the undersea hot vents falls within its "sovereign territory" as defined by rights associated with international laws relating to Exclusive Economic Zones (EEZ).  According to the National Oceanic and Atmospheric Administration (NOAA),  that maritime zone "beyond and adjacent to its territorial sea that extends seaward up to 200 nm from its baselines (or out to a maritime boundary with another coastal State). Within its EEZ, a coastal State has: (a) sovereign rights for the purpose of exploring, exploiting, conserving and managing natural resources, whether living or nonliving, of the seabed and subsoil and the superjacent waters and with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents and winds; (b) jurisdiction as provided for in international law with regard to the establishment and use of artificial islands, installations, and structures, marine scientific research, and the protection and preservation of the marine environment, and (c) other rights and duties provided for under international law."-NOAA

It is believed also that the vents are located on the same tectonic plate as Jamaica giving more rights to the economic benefits from this area. The economic impact in the region will be significant, especially for Jamaicans who could see the feasibility of paying US$0.05/kWh (instead of the US$0.35/kWh they are currently paying) for electricity generated from a floating power plant hovering above the hydrothermal vents some 3 miles below in some places on the seabed. 

The construction cycle would last five (5) years and employ an estimate of some 450,000 workers during that time contributing well over US$190 billion in regional GDP and would employ some 6,000  full time workers during operation.

The fifty two (52) gigawatt of clean renewable energy will offset some 228 million tons of Carbon Dioxide (CO2); having Green House Gas (GHG) emission reduction equivalency; 38 million passenger vehicles and 23.4 billion gallons of gasoline and could contribute an additional twenty (20) gigawatt of energy to the North American Grid.

UNDERWRITING THE PROSPERITY PARTNERSHIP (P2)

REMITTANCE AS AN ASSET BASE IS VALUED AT SOME US$63 BILLION AND POTENTIALLY GREATER

"The acknowledged potential for improved management of remittances for national development, poverty reduction and social well-being were important factors. The large number of talented Jamaicans living abroad in the Diaspora was also identified as justification for the formulation of a policy on international migration and development. The policy is meant to manage migration more effectively for its integration into national development strategies by harnessing its development potential to benefit the society and migrants themselves." 
Draft National Policy on International Migration and Development , October 2015

Remittance is not a foreign exchange service but an asset in perpetuity which must be managed like all financial assets in terms of protecting and growing that asset base.  It is a measurable Financial and Economic Asset.

Until our governments understand this remittance will always be a curse on our National Debt.  It is curse because those with power and huge financial interest manipulates the exchange rates to constantly drive down the value of the Jamaican Dollar to profit from the exchange rate spread, due to the increased inflows of hard currency from remittance which invariable increases the size and cost of our national debt.   

Regardless of passing “IMF” acid tests, the structural impediments to growth in the Jamaican Economy are rooted deep in our colonial legacy, a fact most of us are not willing to accept. For too long race and class have played a dominant role in economic development planning and the policies to address fundamental social and economic issues are often skewed along that colonial mind-set.

The volume of trading in currency speculation is estimated at an average of approximately US$10 billion annually. The government will need to greatly improve its business planning and investment modeling capacity to attract a significant portion of this investment away from currency speculation into other areas of the economy such are in Energy, Manufacturing and Urban Infrastructure Development.

Remittance as an asset base is valued at some US$63 billion (potentially ten times greater) and it is from this posture that the New Government of Andrew Holness must negotiate. This will mean significant restructuring of our fiscal and monitory policies in order for Bank of Jamaica (BOJ) to account for this new asset based on our balance sheet.

The Government of Jamaica must now adopt an American styled Foreign Policy regarding its Citizens living abroad to protect and advance their interest both locally and overseas. This interest must be defined as a national interest in both political and economic terms. America will protect its Citizen anywhere in the world at all cost. The GoJ must adopt this posture and help to enhance the social, economic, cultural and political interest of all Jamaican living overseas.   

This is exactly what the Chinese Government is doing with their citizen here in Jamaica. Our security force must move with the same intensity to protect local business interest and the average Jamaican citizens in the same manner in which Chinese are being protected here in Jamaica.

The Prosperity Agenda cannot afford to be insensitive to the needs and aspirations of all Jamaicans (home and abroad) unlike the previous government who were most hostile to the civil and social dignity of every Jamaican and inherently hostile to the advancement of poor Jamaicans in pursuit of a corporate agenda and the imposition of a race based economic development plan outside of a strong institutional framework to protect the Jamaican people and Local Investors. This Represents one of the most exploitative development agenda in the history of modern governance in this country and throughout the free world. The PNP has turned its back on the very core ideals upon which this party was founded. The JLP was also founded on fundamental principles of workers’ rights and the protection of local business interest.