By Fitz Casserly, ContributorTHIS IS just an idea for the Government of Jamaica and the powers that be to consider and implement to take Jamaica out of its huge debt foreign and national and place the country on a growth and economic development path.
1. Create a three per cent Jamaica consolidated bond for a total issue of J$600 billion, with a 30-year tenure, with both the principal and the interest indexed to the United States dollar. The interest to be payable yearly, tax free, to holders of the bond, worldwide.
2. Target this bond to a minimum of 4,000,000 Jamaicans, at home and abroad, to purchase a minimum of J$150,000 worth of bonds each. Four million subscribers at J$150,000 each will produce J$600 billion .
3. Bond purchase payments to be made by either (a) Jamaican dollars or (b) foreign convertible currency equivalent or (c) conversion of any type of current holding of Jamaican government debt.
4. Use the proceeds of the three per cent Jamaica consolidated bond to liquidate all outstanding government debt which comprise the balance of the J$600 billion due at the close of the issue and the receipt of proceeds of the three per cent Jamaican consolidated bond.
5. Any surplus of the J$600 billion three per cent Jamaican consolidated bond issue which remains after the liquidation of all government debt, including any debt conversion, must be placed in the capital development fund, and can only be used for enduring development projects. For example, the conversion of the Bog Walk Gorge and the Rio Cobre River in St. Catherine, Jamaica to a hydro-electric and water storage dam.
6. The release of the variable and high interest rate government debt will be returned in cash to those holders who did not convert their holdings to the three per cent Jamaican consolidation bond issue.
INTEREST RATES
7. Whether current holders of government debt are paid out or they convert to the three per cent Jamaica consolidated bond, interest rates will begin to fall in line with international competitive rates. This new competitive interest rate regime coupled with the cash pay-out to those debt holders who did not convert, will re-direct loanable funds towards the productive sector of the economy, through the banking and financial services sector.
8. The issue of the three per cent 30-year Jamaica consolidated bond for J$600 billion must be authorised by Parliament and the use of the proceeds in cash or debt conversion, must also be monitored by Parliament to ensure the objective is concluded on behalf of the citizens of Jamaica worldwide.
9. Government, through the Ministry of Finance and Planning only, will be authorised to borrow on Treasury Bills only, of either 90 days or 180 days tenure up to 80 per cent of the projected revenue intake for a similar ensuing period. All Treasury Bills must be liquidated in cash at the end of their tenure. No bill-over of any issue of Treasury Bill will be permitted.
10. All proceeds from the future sales of government physical assets must be placed in the capital development fund by the Ministry of Finance for use only for enduring development projects. All future sales must be to the highest bidder at public auction.
11. Where there are sales on intangible assets, such as concessions and licences, the proceeds may be placed in general revenue (the consolidated fund) or partly in general revenue and partly in the capital development fund, by the Ministry of Finance. However, once a portion of these funds is placed in the capital development fund, they can only be used for enduring development projects.
12. All members of Parliament will be required to prepare an annual constituency maintenance budget. This will be in two sections one section will have all the maintenance activities to be carried out in the constituency for each fiscal year April 1 to March 31, and the estimated or budgeted cost of each listed activity.
The second section of the budget will attempt to record the sources of revenues and the estimated or budgeted amounts generated by the constituency, for the fiscal year, as far as the member of Parliament is able to ascertain. These 60 constituency budgets will be submitted to the Ministry of Finance for review and evaluation, and use by the Ministry of Finance as factors in the preparation of the government of Jamaica annual budget.
13. After the budget officers of the Ministry of Finance have completed their reviews and evaluation of the constituency maintenance budgets, they must discuss and resolve any material variation from the norm in any of those budgets with the member of Parliament affected.
14. The final constituency maintenance budgets will be released to the members of parliament by the Ministry of Finance after the presentation of his annual budget to Parliament.
15. All the financing for the constituency maintenance budgets will flow from the Ministry of Finance via the various ministries on the completion of each of the various maintenance activities as they are executed to completion during the fiscal year. The current practice of allocating constituency funds to members of Parliament will cease and the new proposals to increase the range and level of funding to be handed to or allocated to individual members of Parliament will be abandoned.
16. Local government and parish councils will be abolished and physical and personnel resources released by such abolition will be re-evaluated and where appropriate, will be re-deployed in the 60 constituencies under the direction and control of the relevant ministries. Each member of Parliament will use the approved constituency budget as the point of departure to monitor the maintenance and revenue activities in the constituency on behalf of the Jamaican citizens.
17. The Ministry of Finance will take control over the collection, management and accountability of all government taxes and other revenues. With the exception of those government institutions now existing which collect their own taxes and fees, e.g. executive agencies, no new or further government controlled entity or department will be allowed to collect and retain for its own use, any taxes or fees. All such taxes and fees must be accounted for and paid over to the Ministry of Finance.
18. Future borrowings, except by Treasury Bills, by the Government of Jamaica, either on the local or foreign money market, can only be done for enduring development projects in Jamaica.
The following criteria must be satisfied in their entirety in order to commit Jamaica to such loan obligations.
(i) The project to be financed must be of an enduring development and benefit for Jamaica and its citizens.
(ii) The viability, feasibility and payback period of the project must be demonstrated by professional, technical, financial and management inputs, in the preparation and evaluated documentation for the benefit of the citizens of Jamaica.
(iii) The full particulars in (ii) above related to the project development must be submitted to the proposed project financiers and their response reduced to writing and directed or presented to the Government of Jamaica. (iv) If the project passes the tests at paragraphs (ii) and (iii) above, then the project must be brought to Parliament, tabled and debated, and must be passed by two-thirds majority of both houses of Parliament. (v) Where the financing of the enduring development is to be financed out of the capital development fund of the government of Jamaica, then the same stringent and vigorous analysis and examination of the project documents, and the two-thirds approval of both houses of Parliament must be applied.
(vi) All the loan financing proceeds of the projects must be made directly to the Ministry of Finance and accounted for by that ministry. All the finance expended in furtherance of the construction and development of the projects, must be carried out by the Ministry of Finance on receipt of the following certified documentation:
(a) Certificate of work done to date prepared and signed by the project architect, and showing the sum due to the contractors at that time. As part of the architect's certificate, there will be counter signed certificates by the project engineers and the project managers. (b) An overall certificate from the project minister of government under whose portfolio it falls, attesting to the authenticity of the work certified, the amount of funds now due for payment and the existence, valuation and ownership of the project at that point in time.
(c) The Minister of Finance will then have his budget and technical officers review the certified claim submissions and satisfy themselves and the minister as to the authenticity of the claims, certify the claim and present it to the Finance Minister in order for the release of the required financing.
VENTURE CAPITAL FUNDING
19. The Government of Jamaica, through the Ministry of Finance must merge all government operated banks into one banking entity and focus the new entity on venture capital funding for industry, tourism, business and the economy as a whole.
20. The Ministry of Finance must convert the Students' Loan Board to an autonomous students' Loan Bank to serve all levels of students who need educational financing and can qualify either by themselves, though their parents, guarantors or personally owned security. The bank must be able to offer scholarships to bright, needy students out of its net income. The bank's net income must be free of income tax. Each year a sum equal to the national tax payable must be set aside towards the accumulation of the scholarship fund.
21. The Government must do the following in the interest and protection of citizens and visions in Jamaica:
(i) Pass the necessary laws to make the threat against the life of persons and/or their property by any other person in Jamaica, an arrestable offence. There are only two human rights the right to life and the right to property.
(ii) Bring back the cat-o-nine for persons of 18 years and over, and the tamarind switch for persons under the age of 18 years, as part of the sentencing package by judges for persons found guilty of rape, assaulting or inflicting any type of wound or bodily injury, including death, to a citizen of or a visitor to Jamaica.
(iii) Make it an arrestable and criminal offence for any member of the various arms of the Jamaican security forces to initiate assault, injure, beat with any kind of weapon or with fists, hands, feet, head or other parts of the body, trim hair without a court order, use lethal weapon to wound or shoot a citizen of Jamaica.
22. On the successful completion of the floating of the 3 per cent 30-year Jamaica consolidated bond and the settlement of the public debt, the Net International Reserves (NIR) will be a free reserve to the country. The flow of liquidity back into the banking system will allow productive loans to be made to the private sector. This sector will attract many persons from the public sector thereby reducing the high level of public sector wages.
