September 2008 - Chief Executive Officer's Report

OVERVIEW OF THE ECONOMY

International Financial Crisis:  On Monday, September 15, Lehman Brothers, the 4th largest investment bank in America filed for Chapter 11 bankruptcy protection and went into immediate liquidation. The institution accounts for over $613 billion of debt. The US government refused to bail out the investment bank. All hopes were lost after Bank of America (BofA) and Barclays Bank refused an offer to acquire the assets of Lehman Brothers on Sunday, September 14.

Other large financial institutions have also experienced difficulties in recent times. In March 2008, Bears Sterns was bailed out by the Federal Reserves; the 3rd biggest investment bank Merrill Lynch, was sold to BofA; American International Group (AIG), a major insurance corporation, was also snatched from demise by the Federal Reserves (September 16). By the end of the second week in September, the US Treasury took over Fannie Mae and Freddie Mac which, together, account for over 80% of mortgage loans in the US. It was thought that the collapse of these institutions would surely create a financial chaos warranting some form of government assistance.

After the demise of Lehman Brothers, the moral hazard that developed from the perception that assistance would be forthcoming from the US Government was eliminated. It is believed that the financial crisis has entered a new and dangerous stage.

UK On The Verge Of Recession:  The UK's Second Quarter Economic Survey projected recession within a few months. The manufacturing and services sectors are the two main areas reflecting negative growth. (Recession is characterized by two Quarters of negative growth).

This uncertainty contributed to a significant appreciation of the Jamaican dollar against the pound sterling as investors sought alternative currency holdings to the pound. Within 1 month and 10 days the GBP depreciated by 11.2% against the Jamaican dollar. 

Government's Deal With American Airlines: Government has signed a US$4.5-million deal with American Airlines (AA) to maintain flights from Dallas, Chicago and Miami to Jamaica on the basis that planes are 65% full.  The Government anticipates that this arrangement will result in an additional 160,000 visitors to Jamaica, and a guarantee of US$100 million in foreign currency earnings to the country. 

New Wage Deal: The Government settled on a new wage contract with Jamaica's Police Federation.  There was agreement on a 40-hour work week with provisions made for an allowance to be made for excess hours worked.  Retroactive pay for overtime will be made for the period beginning April of this year.

Government Secures IDB Funding:  The Government of Jamaica (GOJ) has secured loan funds of $20M from the Inter-American Development Bank (IDB) at an approximate concessionary rate of 5% per annum for 20 years and with a 5-year grace period. The funds will be used to rebuild the bridge in Harbour View that collapsed during the passage of Hurricane Gustav.  

In addition, in early October, the Government signed an agreement for a US$50M infrastructure and rehabilitation loan to undertake critical repairs following damage caused by Tropical Storm Gustav in August.

Doing Business In Jamaica:  Jamaica was ranked 63 in the World Bank 2009 Doing Business Survey, one rank below its 62nd position in last year's review. In 1 of the 9 sub-categories used in the rankings, which is ‘Dealings of Construction Permits', there was an improvement in the number of procedures, time and cost for building warehouses.  This improved Jamaica's ranking in that sub-category by 25 places.  In the ‘Employment of Workers' and ‘Closing a Business' sub-categories, Jamaica advanced by one position.  The country's ranking deteriorated in all sub-categories except for ‘Starting a Business' and ‘Paying Taxes' which retained their previous year rank.

Employing workers in Jamaica is less rigid than in the rest of the Caribbean and OECD region. There is no difficulty with firing, but the costs remain at elevated levels and compares less than favorably to the region.

Closing a business in Jamaica continues to be impacted by administrative bottlenecks while trying to expedite bankruptcy law. Costs are estimated at 18% of estate value in contrast to the region's 15.9% and OECD average 8.4%. The recovery on dollar invested remains at an attractive 64.5%, that is just marginally below the OECD 68.6% but substantially above the 26.8% for the region.

Jamaica has fallen 25 paces in the category of Enforcing Contracts. The country currently ranks 127 out of 181 countries. The poor performance resulted largely from the time it takes to conduct trials and pronounce judgments (540 days). This timeframe significantly exceeds the OECD's average standards, despite being better than the regional average. 

Table 13:  Doing Business in Jamaica

Categories

2009 rnk

2008 rnk

Change

Jamaica Overall Rank

63

62

-1

Starting a Business

11

11

0

Dealing with Construction Permits

49

74

+25

Employing Workers

32

33

+1

Registering Property

109

108

-1

Getting Credit

84

79

-5

Protecting Investors

70

66

-4

Paying Taxes

173

173

0

Trading Across Borders

100

96

-4

Enforcing Contracts

127

102

-25

Closing a Business

22

23

+1

Note: 

1) There was a change in the methodology used and the total number of countries ranked increased by three. 

2)  The rank is relative and may be impacted by changes made in other territories.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CMP Delisted: Caribbean Metal Products (CMP) limited was delisted from the JSE on September 11 based on the company's failure to abide by rules of the stock exchange. The company was suspended six months prior to the delisting.

 

CORPORATE GOVERNANCE COMMITTEE

The Committee is disappointed at Mayberry's decision not to accept the Corporate Governance Committee's presentation at the upcoming Investors' Forum.  The decision was based on Mayberry's concern that the topic would not be well received.

The Committee Scorecard was reviewed and new timelines were agreed.  For example, the Regional Train the Trainers Seminar which was originally proposed for 2008 in conjunction with the Global Corporate Governance Forum would be held in early 2009.

Efforts are being made to have the Committee's first article for the Gleaner column "ON THE PSOJ"S AGENDA" finalized and published before the end of the year. 

IDB has approved eligibility for funding for a project proposal aimed at assisting family-owned businesses in Jamaica.  The project will provide the selected companies with training and technical assistance in Corporate Governance in order to ensure that good business practices are entrenched in their operations.  Additionally, a special meeting will be held in early November between the CG Committee and the IADB Team Leader Mr. Nobu Otsuka, who will be on mission in Jamaica to discuss the project and related issues.

The next Committee meeting will be held in November.

 

STANDING COMMITTEE ON NATIONAL SECURITY (SCNS)

At the September 16th meeting, members of the Standing Committee on National Security continued discussions on the JCF's Strategic Plan and Review and looking at measurable targets for the JCF in keeping with the objectives outlined in the plan.  The meeting was informed by Commissioner Lewin that no targets would be set for Year 1 but targets would be identified for Year 2.    Representatives of the Ministry of Justice as well as the Chairman of the PSOJ's Justice Reform Committee would be invited to the next Committee meeting to give an update on the legal reform review presently being conducted.

 

JUSTICE REFORM COMMITTEE (JRC)

Mr. John Vassell, Partner in the firm DunnCox, has accepted the President's invitation to chair the Committee. 

The project proposal to establish a Commercial Alternative Dispute Resolution Centre, jointly by the PSOJ and the Jamaica Chamber of Commerce, has been submitted to an IDB  Trust Fund.


ECONOMIC POLICY COMMITTEE (EPC)

The Economic Policy Committee (EPC) did not meet officially in September.  A meeting was held with representatives from the Inter-American Development Bank (IDB) on Thursday, October 2. This was part fo the IDB Mission's objective to meet with Government officials, the Central Bank and other key stakeholders such as the Private Sector Organisation of Jamaica (PSOJ).  On the agenda were the following items:

To analyze the progress in the different components of the Policy Matrix;

To coordinate and agree on the strategy for the consultations and consensus  building  activities  for  the  creation  of  a central registry of pledged assets;
For  consensus  and  agreement  on  a  Regional Seminar on Public Private Dialogue in early 2009; and
To identify and coordinate further technical assistance from the Bank (including Air Jamaica).

The Committee, on behalf of the PSOJ, expressed their concern of the slow pace at which the Government was moving. It was recommended that the Government should place greater emphasis and focus on implementing the prescribed policies.

The PSOJ also recommended that the IDB should institute some form of monitoring mechanism to track the policies being implemented. The Caribbean Policy Research Institute (CaPRI) was suggested as an appropriate collaborator in such an initiative.

The PSOJ remains committed to taking a lead in efforts to bring about policy changes that are needed for improving the Jamaican business and economic environment. 

The next EPC meeting will be on October 29, 2008.

 

JOB CREATION AWARDS

The Job Creation Award function for this month was held on Tuesday September 23, at the Terra Nova Hotel. The Guest Speaker was the Hon. Michael Fennell, OJ, CD President of the Jamaica Olympic Association who spoke on the link between job creation and the business of sports.  Companies receiving awards were The Auto Club - Small Business Award and Motor Sales & Services. - Company in operation for over 40 years.

The function was covered in the Jamaica Observer and The Gleaner and was also aired on JNN TV.

Mr. Mark Brooks is to make a presentation on "No Agriculture, No Economy, No Social Stability" 

at the next JCA Breakfast on October 28 at the terra Nova Hotel.

 

EDUCATION COMMITTEE

Discussions at September's meeting centered around the Reading Project, Committee Articles, PSOJ/ IAJ Mentorship Programme and the preparation of the proposal for the Commonwealth of Learning on school governance.

The Committee was informed about PanCaribbeanBank's involvement which would see them having reading activities in 35 schools. This would be part of the company's 35th anniversary celebrations. There was also some discussion about the possibility of accommodating a University student at the PSOJ who would be responsible for following up with companies who had committed to participate in this project as well as getting the participation of new companies. However, this would be further discussed at the next meeting.

Two articles written by Committee members were published in the PSOJ's column ON THE PSOJ's AGENDA. There was some concern, however, about non-Committee members not being credited for articles written for the column. This matter would be further discussed with the PSOJ's CEO. Additional articles from Committee members would be finalized by the end October.

The Mentorship Selection was made and a formal letter sent to the respective mentors encouraging them to contact their assigned mentee so that the programme would start by mid October.  An Orientation Session would possibly be scheduled for later in the month.

Phase One of the Commonwealth of Learning project proposal on school governance was completed.  Phase Two, which would include a pilot design and testing of training programmes, is now being designed.

 

TRADE POLICY COMMITTEE (TPC)


Update on the Economic Partnership Agreement (EPA)

Following a CARICOM Heads of Government meeting in Barbados on September 10, the decision was taken to propose that the signing of the EPA take place on October 15.  This date was accepted by the European Commission.  The signing of the EPA is therefore scheduled to take place in Barbados on October 15.  PSOJ representatives have been invited by the Foreign Ministry to attend this event, but due to unavailability of funds we have declined the invitation.

Thirteen CARICOM Member States have indicated that they will sign the EPA.  The exceptions are Haiti and Guyana.  Guyana has proposed to sign a "goods only" agreement.  The Jamaican Parliament voted on September 2 to sign the EPA.

In anticipation of the signing originally scheduled for September 2, approximately 20 EU Member States have already signed the EPA.

Cabinet has established a Technical Working Group to oversee the EPA implementation process.


CARICOM/Chile Relations

The Chilean Embassy, in collaboration with Jamaica's Ministry of Foreign Affairs and Foreign Trade and Jamaica Trade and Invest, hosted a seminar on 25 September on the Chilean experience of implementing free trade agreements.  Public and private sector officials were in attendance.

Chile is a party to 19 trade agreements covering 55 countries, which includes all of the Americas except CARICOM.  Chile strategically pursued free trade which resulted in improved economic growth and competitiveness.  Real average applied tariffs in Chile are now at 1.8 per cent.  All of Chile's trade agreements include services.

It was proposed that a CARICOM-Chile joint study group be established in order to assess the potential for a trade agreement with Chile.


Chile prefers to pursue a negative list approach in its negotiations, where all sectors are included for negotiations with stated exceptions. The clarity and precision of this method result in specific commitments.  However, Chile has pursued services negotiations using a positive list approach, where only certain sectors were negotiated.

Chile has created an institutional framework to solve trade disputes as a result of its free trade agreements.


CARICOM/Costa Rica Relations

Work is ongoing by the Ministry of Finance and Planning for Jamaica's implementation of the Free Trade Agreement with Costa Rica.  The delay has been due to concerns regarding differences in tariff lines in the Harmonized Standard (HS) 1996 lines that were used when the agreement was signed and the HS 2007 lines which are now being used by Jamaica.

Trinidad and Tobago, Guyana and Costa Rica are now trading under the HS 2007.  Barbados is expected to implement HS 2007 by December 2008.   Therefore, Jamaica will be implementing the agreement using HS 2007 lines.


CARICOM/ Canada Relations

Negotiations for a CARICOM-Canada Trade and Development Agreement, although given priority treatment on CARICOM's negotiating schedule, will be delayed until after Canada's October 2008 elections.  Preparations for these negotiations are however ongoing at both the national and regional levels.


CARICOM/USA Relations

Negotiations with the USA are next on CARICOM's schedule.  The November 2008 Presidential elections will, however, dictate the pace at which these negotiations will proceed.

Export Development Workshops

The Private Sector Organisation of Jamaica obtained funding from the Canadian Cooperation Fund to hold three export development workshops.

The first workshop will be held on October 14 and will look at market access and rules of origin.  The second workshop on October 15 will deal with exporting goods, and the third and final workshop, on October 16, will examine how to effectively export professional, business and other services to the Canadian and other international markets.

The presenter will be Ms. Pernille Fischer Boulter, President and CEO - Kisserup International Trade Roots Inc., Nova Scotia, Canada.  Ms. Boulter brings over twenty years of experience in international business and providing consulting services to public and private sector organizations. With a background in marketing, sales, training and consulting she has worked on projects in over 40 countries worldwide.


Events in October                   

9-11 October, Jamaica        CARICOM-Canada Business Council 
14-15 October, Trinidad       Technical Working Group on CARICOM-Canada  
                                         Negotiations  
14-16 October, Jamaica       Export Development Workshops (Terra Nova Hotel)
15 October, Barbados        Signing of the Economic Partnership Agreement with  the EU 
 23-24 October, Guyana    Meeting of the Council for Trade and Economic  Development (External Trade)
 31 October,  Jamaica       IFPRO/JAMCOPY/WIPO/JIPO International Seminar 
MEMBERSHIP


Information Distributed To Members

Five (5) e-bulletins were distributed for the period.  Information included:

  • PSOJ/IADB Project: Development of Modern Family Businesses in Jamaica
    Olympic Athletes Celebration
    National Customer Service Week
    Export Development Workshops
    Job Creation Awards Ceremony - September 23, 2008
             

New Members

New member for September was: Jamaica Biscuit Company

New Members Induction: Jamaica Biscuit Company was inducted at the Job Creation Awards Function on September 23, 2008


Membership Satisfaction Survey

Follow-p calls, personal visits and emails were used to improve Members' participation in the Survey.  To date, a total of twenty-seven surveys have been completed.


2008 Subscription

For the period, follow-up calls resulted in the collection of over $1M in outstanding subscription. See breakdown as follows:

Period (as at)

Total Subscription

Total Collected

Total Outstanding

August 31

24,248,906.08

21,908,096.16

(90%)

 1,559,868.41

(6%)

September

24,361,328.58

 

(22,158,866.14)

(91%)

 1,421,192.73

(6%)


A strongly worded letter under the signature of the Honorary Treasurer along with Invoices were sent to members who were in subscription arrears for 2007 and/or 2008.  Follow up calls have since commenced. 


Dec 14 - 15  IV CARIFRORUM-EC Ministerial on EPA Negotiations, Barbados

CORPORATE AND PUBLIC AFFAIRS DEPARTMENT (CPAD)

Meetings/ Functions/ Events                                        

 JIOB Breakfast meeting with Prof. Michael Luger    Sept 12 
 JBA Business Luncheon                                      Sept 12
 Standing Committee on National Security              Sept 16 
 Job Creation Awards function                                Sept 23 
 Pension Management Seminar                             Sept 30


Private Sector Hall of Fame

The planning of this event, which will be held on October 30 at the Hilton Kingston Hotel, is well underway and will intensify in the remaining weeks. Meetings and discussions were held with relevant service providers. 

Pension Seminar

PSOJ partnered with Prime Asset Management to host a pension management seminar on

Tuesday September 30 at the Jamaica Pegasus Hotel.  The theme was:  "Pension: The Road

Ahead For All Stakeholders".  The opening address was given by the Hon. Audley Shaw, MP -

Minister of Finance & the Public Service.  There were over 100 participants and 8 companies had

table displays.  The seminar was carried in the Jamaica Observer on Wednesday October 1 in

addition to being carried on JNN.

Press Releases/Advisories/Speeches                                           

 Message for JBA President  -  JDIC Supplement September 3 
 CEO's Report  September 5
 Opening Remarks  -  JIOB Chair - JIOB/JBA Council Breakfast  September 10 
 Vote of Thanks - JIOB Chair  -  JBA Lunch  September 10
 President's Report to Council September 16
Opening Remarks - JIOB Chair - Presentation of Graduates Ceremony  September 19 
 Script/linkages for MC - Presentation of Graduates Ceremony September 19 
 Opening Remarks - JIOB Director  - Financial Crisis Forum September 24
 Media Advisory -  JBA Luncheon September 10 
 Press Release - Pension Seminar September 16 
 Media Advisory - Job Creation Awards Breakfast September 19 
 Media Advisory - Pension Seminar  September 25 


JAMAICA BANKERS ASSOCIATION

The Department was integral to the planning of the JBA's first Business Luncheon which was held on Friday September 12 at the Knutsford Court Hotel.  This was well attended  -  not only by persons from the banking sector but the wider business community.  Also in attendance was the Minister of National Security.  Special tribute was paid to Mr. William Clarke, former President of the JBA, for his over 40 years in the banking industry.  Keynote Speaker at the luncheon was Professor Michael Luger, Dean of Manchester Business School, University of Manchester,  United Kingdom.  The function received media exposure in the Gleaner, JNN and was the only story featured in the Business Section of CVM TV's News on Sept 17.  A press release was published in the Jamaica Observer prior to the function.


JAMAICA INSTITUTE OF BANKERS

The Department:

  • assisted with the planning of the JIOB Breakfast meeting held on Friday September 12 at the Hilton Hotel. Professor Michael Luger, Dean of Manchester Business School was the main speaker and addressed the issue of cementing the Institute's partnership with its various stakeholders. Mr. Nigel Banister, Chief Executive Officer of Manchester Business School Worldwide, was also in attendance.
    created, formatted and arranged for 200 printed invitations for JIOB's Presentation of Graduates Ceremony, which was held on September 20, 2008.prepared Remarks for JIOB Chair and script/linkages for Master of Ceremonies - Presentation of Graduates Ceremony
    formatted brochure for JIOB workshop on ‘Protocol and Business Etiquette' scheduled for September 26, 27 & 29, 2008. created and formatted Flyer for JIOB Fraud Seminar scheduled for October 22, 2008.

MBA PROGRAMME :  Tutorials

Three (3) tutorials were conducted in September in the JIOB Training Room.


Visit of Professor Michael Luger, Dean of MBS and Mr. Nigel Banister, CEO MBSW

Professor Michael Luger, the Dean of Manchester Business School, and Mr. Nigel Banister, CEO of Manchester Business School Worldwide, visited the Jamaica September 11 - 13 and 11 - 14, respectively to attend the following important events:

a. Breakfast meeting held Friday, September 12. This meeting was held with Council members of the Jamaica Bankers Association (JBA)/JIOB along with Human Resource/Training Managers and was arranged as a symbolic cementing of the partnership between the JBA/JIOB and Manchester Business School.

b. Courtesy Call on the Governor of the Bank of Jamaica on September 12.

c. JBA Luncheon which was held Friday September 12. Prof. Luger was Guest Speaker at this event.

d. The Alumni Association's "Caribbean Super Reunion (Party on the Sea) on Friday, September 12.

e. MBA Information Session - "Investing in your Education for Global Competitive Advantage" Nigel Banister was the main speaker.

           

Visit of Academic Director  -  Dr. Alistair Benson

The Academic Director of MBSW visited Jamaica September 16 - 21.  The following meetings were facilitated during his visit:

a) Meeting with the local MBA Tutors

b) Meeting with Students to discuss the difficulties experienced with Strategic Management module

c) Project Review Meeting with students at, or close to, the project stage
d) Meeting with prospective applicants
e) Presentation to Senior Managers of the BOJ (including the Governor) on MBS MBA and DBA programmes.
f) Meeting with NCB to discuss MBA programme and the possibility of other training options with MBS.


The highlight of his visit was to attend the local Presentation of Graduates Ceremony, which was held on September 20 at the Hilton Kingston Hotel.  25 of the 42 graduates were in attendance.  Four (4) workshop directors from the UK were also in attendance.  The Guest Speaker was Dr. Christopher Tufton, Minister of Agriculture, DBA Graduate of MBS.           

Workshops

Eighteen (18) workshops were conducted at various hotels during the period September 16-28.

Seminar

The JIOB/MBSW collaborated with First Global Bank and First Global Financial Services to host a special seminar on "Lessons Learned from the Sub-Prime Crisis" in the Grande Caribbean Suite of the Knutsford Court Hotel on September 24.  Ismail Erturk, Snr. Fellow in Banking and Workshop Director of MBSW MBA was the presenter.  Attendees included current and past students of MBSW as well as Corporate clients of FGB/FGFS and Directors of GraceKennedy.


DEVELOPMENT COURSES & IN-HOUSE DEVELOPMENT COURSES :

In-house Programmes

Delinquency Management:  Two one- day workshop were conducted in-house for National Commercial Bank Limited -  September 18, at the NCB Training Centre, Kingston and  September 19, at the NCB training facility, West Bay Shopping Centre, Montego Bay.  Ms. Marion Blake was the presenter along with other NCB managers.

Effective Business Writing Skills: A two-day workshop, was conducted in-house for PriceWaterCoopers on September 23-24. The presenters were Mrs. Claudeth Henry and Mr. Patrick Smith. 

Open Market Programmes

Fundamentals of the Financial Services Sector: A one day development programme was held September 18, 2008 at the JIOB Training Centre. Ms. Marcia Woon Choy was the presenter.  Thirteen participants were in attendance.

Public Speaking, Protocol & Business Etiquette:  A three-day workshop at the Courtleigh Hotel & Suites, September 26, 27 & 29, 2008.  This workshop was facilitated by Merrick Needham & Associates (MNA).  Twenty eight participants were in attendance.


HUMAN RESOURCES

Staff Matters/Welfare

Proposals were requested and reviewed from Group Life & Pension providers
Completed health claims processing for staff member who had an accident at a JIOB event
Individual Pension statements from Guardian Life were received and delivered to staff members
HR Officer attended Prime Asset Management/PSOJ Pension seminar on September 30
HR Officer held a meeting with Fire Safety professionals to assess the safety needs of the building and requested a proposal for installation of the recommended measures; follow up continues.
Staff Meetings

Staff Meeting was held and a group building activity was the main focus.

Birthdays

Three staff members celebrated their birthday during September.


October 10, 2008

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