1. Jamaica’s
Debt
Why Wi Suh Bruk?

2. Jamaica’s
1. How Dis
Debt Happen
2. Why Debt
Important
3. How Wi Can
Fix It

4. Public Debt Levels
147%
71%
76%

5. Annual Debt Increments

6. Annual Debt Increments
Total Growth of Debt

7. Breaking Down Debt Increases
New Debt
Re-valuation of
Existing Debt

8. Breaking Down Debt Increases
remainder Debt Absorption
cap. expend. – cap. rev. Capital Balance
Interest payments Interest
progs. + wages – tax rev. Basic Balance
exch. rate X ext. debt
Re-valuation of
Existing Debt

9. Breakdown: 1997-2003
Debt Absorption
Capital Balance
Interest
Basic Balance
Re-valuation

10. Breakdown: 1997-2003
Debt Absorption

11. What’s the Point?
Absorption of non-central
government debt is the root of
Jamaica’s debt problem

12. Jamaica’s
1. How Dis
Debt Happen
2. Why Debt
Important
3. How Wi Can
Fix It

13. World Ranking - Debt
According to IMF research, over 14 Caribbean
countries are ranked in the top 30 most indebted
countries. Jamaica is fourth.

14. The Size of the Problem
By mid-April 2008, Jamaica’s national debt was
US$14 billion - almost one and a half times the
size of our GDP
Debt servicing will absorb an estimated 54 per
cent of the Government of Jamaica’s revenue

15. Is Debt Relief the Answer?
Jamaica is a middle-income country. It does not
qualify for HIPC. Should debt relief be extended
to middle income countries (those with per capita
income below USD $9,625)?
Jamaica’s debt per capita is USD 7,920.

16. Effects of Debt
 Investment Crowding Out – the Bond Market
Inability to Have Increased Social Spending –
4.4% of GDP – crime and violence
Taxes – despite surplus
Hurricane Mitigation – Climate Change
Adaptation

17. Jamaica’s
1. How Dis
Debt Happen
2. Why Debt
Important
3. How Wi Can
Fix It

18. 1. Everything Stays As Is
● Revenue collection = no improvement
● Debt mix = 50/50 maintained
● GDP growth rate = 1.5%

19. 1. Everything Stays As Is
Debt/GDP < 80% in 13 years Balanced budget in 8 years

20. 2. Less Domestic Debt - 56%  40%
Debt/GDP < 80% in 13 years Balanced budget in 7 years

21. 3. More Multilateral Debt: 21%  42%
Debt/GDP < 80% in 12 years Balanced budget in 7 years

22. 4. No Absorption of Debt from Public
Sector Entities
Debt/GDP < 80% in 10 years Balanced budget in 6 years

23. Taxes: 4 - 7% More Revenue
Debt/GDP < 80% in 9 years Balanced budget in 3 years

24. GDP Growth: 3%  6%
Debt/GDP < 80% in 7 years Balanced budget in 4 years

25. Therefore…
● Recommendations
 Identify and manage contingent risks
 Implement tax reform for quick revenue gains
 Spend on growth rather than pay down debt

26. The End