ZET - JamaicaGazette.comJamaica Government News and Information
Ministries, Departments and Agencies
cigarette excise taxes, was also based on Goodchild et al. (2016). First, we calculated the
number of daily cigarette smokers aged 15 or above, which was to multiply the population esti-
mates for aged 15 or older by the adult cigarette smoking prevalence. Next, we assumed that
the price elasticity for cigarette smoking prevalence is -0.15, -0.2, and -0.25 in high, middle,
and low-income countries respectively. If the cigarette excise taxes were increased by I$1, the
reduction in the number of daily cigarette smokers (S) in the 2016 adult population (aged 15
or above) was calculated as S × ΔP × p in which S is the baseline number of smokers, ΔP is the
percentage change in retail prices, and p is the prevalence elasticity.
In order to estimate the number of smoking-attributable deaths averted due to the I$1 tax
increase, we followed Goodchild et al. (2016) and assumed a relatively low risk of smoking-
attributable death, which is 33% for conservative estimates. Another assumption made by this
method is that 95% of smokers aged 15–29 who quit will avoid an early death. This percentage
would drop to 75% for smokers aged 30 to 39, to 70% for those aged 40 to 49, to 50% for those
aged 50 to 59, and to 10% for those aged 60 or above. This assumption leads to a global adjust-
ment factor that is 74% based on the 2015 age profile of the world population. Finally, the
number of smoking-attributable deaths averted was calculated using the following formula
33%×74%×ΔS (the reduction in the number of daily cigarette smokers).
Data sources. Population estimates for people aged 15 (in total and by age groups) or
above came from the Institute for Health Metrics and Evaluation (IHME) and the United
Nation Population Division. Cigarette smoking prevalence among adults came from a variety
of sources, including the 2016 prevalence estimates by the Euromonitor International, and the
most recent tobacco use/smoking prevalence estimates compiled by the WHO’s report on
global tobacco epidemic 2017. For countries where the most recent tobacco use survey was
conducted before 2011, the daily cigarette smoking prevalence estimates (defined as the per-
centage of population who smoke every day) came from the WHO global report on trend in
tobacco smoking 2000–2025. In addition, some countries only reported estimates of cigarette
smoking prevalence and tobacco smoking prevalence, rather than daily cigarette smoking
prevalence. In those cases, we used the proportion of daily cigarette smoking among these
more broadly defined smoking activities at the country level as an adjustment factor. This
adjustment factor (proportion) can be derived using the country-level estimates reported in
the WHO global report on trend in tobacco smoking 2000–2025. If the proportion adjustment
factors were not available for the country, we then assumed that 85% of tobacco smokers were
cigarette smokers, among whom 85% were smoking daily, which was chosen because most
derived adjustment factors center around these numbers.
The WHO FCTC implementation cost of best-but policies for the next 15
Method. In order to estimate the total cost of implementing the four best-buy policies rec-
ommended by the WHO FCTC for the next 15 years, we used the NCDs Costing Tool devel-
oped by the WHO (...
June 12, 2021
Table VII (a): Fiscal Risk Sources Risk Factor Implications for Fiscal Position Macroeconomic Risks Economic Growth Deviation of actual economic growth from forecast is expected to impact key
fiscal variables, including revenue. Slower than budgeted growth will likely lead to a shortfall in revenue.
Inflation Lower than programmed inflation can have a negative impact on revenue collection and nominal growth, thereby thwarting the achievement of fiscal and debt targets. Higher than programmed inflation could negatively impact the Government’s expenditure bill.
Interest Rates Increasing interest rates are a risk to debt service costs, based on the interest rate composition of the debt stock. That is, the higher the percentage of the portfolio that is contracted on a floating rate basis, the greater the risk from an increase in the interest rate.
Exchange Rates Jamaica dollar depreciation could contribute to the external debt stock, debt service, and imports increasing in J$ terms. However, a depreciation of the $J will have a positive revenue effect through increased earnings primarily from international trade taxes and external grant receipts (in J$ terms).
Commodity Prices Oil Prices - Oil prices directly impact both revenue and expenditure. Revenue is impacted through the SCT on petroleum and petroleum products, whereas expenditure is impacted through the Governments housekeeping expenses.
Contingent Liabilities Natural Disasters Jamaica is located in a multi-hazard zone, and is therefore susceptible to
natural disasters such as hurricanes, flooding, excess rainfall and earthquakes. Realisation of any of these disasters could lead to significant infrastructural damage, and the need for an increase in and/or adjustment of the GOJs expenditure, as well as lower revenue from economic disruption and fallout.
Public Bodies Public Entities may require support from the Central Government to cover operating costs or pay debt, adding pressure to the Governments budget.
Public Private Partnerships (PPPs)
PPP Projects have to be carefully designed, taking into account the probability of losses that may have to be assumed by the Government.
Judicial Awards Court judgements made against the GOJ pose a risk to fiscal targets, through increased unplanned expenditure.
Other Wage Settlements Uncertainty surrounding the final settlements, compounded by the protracted
nature of wage negotiations can lead to higher than planned costs to the budget.
June 12, 2021
4. SCOPE OF WORK
The consultant is required to, utilizing best practice, develop the structure, templates
and drafts for the Public Investment Performance Report. The report will contain a
review of the public investment portfolio of the GOJ to include the central government,
Self-Financed Public Bodies and Public Private Partnerships under the purview of the
DBJ. The report will include an examination of ;
Sectoral and functional classification of existing and planned investment
Alignment of existing public investments with the long term national
development plan and medium term socioeconomic policy objectives;
Trends in total public investment
Efficiency and impact of public investment
Actions taken to improve GOJ’s public investment management capacity
Overview of the institutional performance along the project cycle including an
assessment of investment planning, investment allocation, investment
implementation, monitoring and evaluation
Provide a review of the policy that guided the investments for the reporting
period to determine alignment to and variation from the policy and the resulting
outputs and impact;
Include standard metrics to compare annual portfolio performance and sector
Status of PIMSEC Project Pipeline
Status of DBJ’s PPP Pipeline
The consultant will be required to have consultations with key stakeholders in the process to include:
Ministry of Finance and the Public Service Public Investment Management Secretariat Planning Institute of Jamaica Specified Public Sector entities Development Bank of Jamaica Cabinet Office Donor Agencies
June 12, 2021
FISCAL RISK STATEMENT
The April 2016 FPP presented a detailed outline of the key fiscal risks being monitored by the
MOFPS/GOJ and the associated strategies for managing them. This report provides a brief
update on some of the risks identified.
The GOJ recognizes the country’s vulnerability to natural disasters and the potential financial and
economic pressures that could result. As such, for the 2016/17 policy year of the Caribbean
Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) programme, the
government has renewed the policy coverage for Jamaica for Tropical Cyclone (TC), Earthquake
(EQ) and Excess Rainfall (XSR) at a premium cost of US$4.9mn.
Tax Refund Arrears are being closely managed by the GOJ to ensure that the arrears decline as
programmed. The level of tax refund arrears is monitored under the EFF programme and this
quantitative target has been met under successive quarterly IMF reviews. During FY 2015/16, the
stock of tax refund arrears was reduced by $4.4bn and ended the fiscal year at $17.3bn. The stock
continues to be steadily reduced, declining to $14.8bn at end-July 2016, representing a $2.5bn
reduction since the start of the fiscal year.
Domestic Arrears represents a category of fiscal risk that includes amounts due to suppliers and
all recurrent and capital expenditure commitments. This category of arrears is closely managed
by the GOJ and is also monitored under the EFF programme. During FY 2015/16 the stock of
domestic arrears was reduced by $524.3mn to $21.0bn at end-March 2016. The GOJ has
continued to steadily reduce the stock of domestic arrears and at end-July 2016, a further
reduction of $128.7mn had been achieved.
Public Private Partnership (PPP)
appropriately designed and financed. Therefore, the risks associated with PPP’s are actively
published in April.
• Kingston Container Terminal – a 30 year Concession Agreement (CA) was executed on
April 7, 2015 with Kingston Freeport Terminal Limited (KFTL) to finance, expand,
operate, maintain, and transfer the Kingston Container Terminal (KCT). The
June 12, 2021
Medium-Term Debt Management Strategy FY2020/21-FY2023/24 18 | P a g e
Low Moderate Major
Government Guaranteed Loans
GGLs are a potential fiscal risk to the
Government. The impact on the debt will
depend on the probability that a GGL will
be called or assumed by the GOJ and the
value of the guarantee. Consistent with
the legislated limits as per the PDMA, the
GOJ has been reducing its exposure to
risks from GGLs. Accordingly, the share
of GGLs to GDP has been decreasing
and is estimated at 4.4 percent at
December 2019, 0.6 percentage point
below the legislated target for FY2021/22.
Weak institutional frameworks in many
developing economies precipitate
unsustainable and irresponsible fiscal and
monetary policies by country governments.
This has led to fiscal slippage, economic
contractions and ballooning public debt across
these countries. However, implementation of
structural and economic reforms in Jamaica
has resulted in stronger fiscal and monetary
policy institutions. Further, the improved
macroeconomic conditions in Jamaica suggest
that the potential fallout from poor policies
may have a moderate impact on the debt
portfolio in the short run.
Financial crises can have significant
negative effects on the economy and the
sovereign debt. The financial crisis in
Jamaica is estimated to have cost
upwards of 40 percent of GDP. However
the adoption of stronger financial
regulations and best practices reduces the
likelihood of a reoccurrence.
Public Private Partnerships (PPPs):
The use of PPPs as a modality to mobilize
investment, particularly in infrastructure
development and energy and water
generation are common in many
developing economies. These types of
arrangements impose potentially
significant fiscal risks if not properly
Policy provides a framework to support
are adjudged to pose minimal risk to the
debt portfolio at this point in time.
However their growing popularity
suggests increasing risks from PPPs over
the medium term.
Shocks in Commodity Prices:
Adverse shocks in commodity prices,
especially oil prices, can have major effects on
the governments BOP and overall fiscal
accounts. Though potentially large on the
fiscal, the pass through to the debt portfolio is
expected to be more moderate. The thrust
towards energy diversification - achieving a 50-
50 mix by 2030, will reduce Jamaicas
vulnerabilities to oil price shocks over the
medium to long term. The advancement of the
Governments Energy Management and
Efficiency Project will also aid in reducing
costs in the short-term.
Natural disasters (floods, hurricane and
earthquakes) pose significant fiscal risks
to the GOJ. The annual average fiscal
cost associated with hydrogeological
events is estimated at 0.85 percent of
GDP but has been as high as 26 percent
of GDP. The adoption of a suite of
disaster risk finance instruments including
indemnity type insurance coverage and
contingent lines of credit will aid in
reducing the fiscal impact of natural
Low Growth and High Crime Rates:
High rates of crime pose a significant risk to
prospects for improvements in productivity and
economic growth. Higher crime related
expenditures will also impact the budget
directly. Low rates of economic growth
(GDP) will impact the fiscal through low
revenue generation and potentially higher
demand for social spending, which could lead
to increases in Government borrowing.
However, an increased focus on crime fighting
and strong and improving macroeconomic
fundamentals support projections for economic
growth of 2 percent over the medium-term.
Volatility in macroeconomic and market
variables can result in higher debt service
costs and stock valuation. Estimates of
the 95 percent VaR and CaR for the debt
portfolio suggest possible maximum
expected losses of over $300.0 billion.
Ongoing reforms of the BOJ, including
the move toward an independent central
bank and the adoption of an inflation
targeting regime could aid in the
stabilization or reduction in the volatility of
domestic market rates thereby reducing
the risks to the debt portfolio.
Low Moderate Major
o o d o
f E v en
o o d
SECTION IV: RISK FACTORS AFFECTING THE DEBT PORTFOLIO
Identifying and quantifying the main risk factors and their impact are important prerequisites for
effectively managing the risks to the debt portfolio. Adverse changes in key
macroeconomic/market variables and other exogenous shocks (example: natural disasters) can
negatively impact the fiscal and debt dynamics. The relative risk to the portfolio from the
realization of an event will depend on the likelihood of occurrence and the fiscal or financial
impact. Figure 11 highlights selected risk factors, their likelihood of occurrence and their
potential impact on the debt portfolio.
Figure 11: Selected Risks and Implications for the Debt Portfolio
Notes: The risks to the debt portfolio are ranked based on the severity of outcome and probability of the event. High probability and high impact
events are the most impactful and are coded in red. Low probability and low impact events are the least impactful and are coded green. Yellow
and brown highlights more moderate and major risks to the debt portfolio.
June 12, 2021