Equity, social protection and growth

Equity, social protection and growth

BY Karelle Samuda &
Stephanie Abrahams

Monday, March 11, 2019

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The constrained fiscal framework under which Jamaica has operated for an extended period of time is bearing fruit. There is a once-in-a-generation alignment of all the key macroeconomic indicators in the right direction, and with such economic gains come opportunities.

The downward trajectory of the public debt as a share of GDP — projected to be 96 per cent at the end of FY 2018/19 — and the increased buoyancy of fiscal revenues have opened up fiscal space for government expenditure to be both growth-inducing and socially inclusive.

In the minister of finance’s opening budget presentation, he outlined substantial capital expenditure increases to priority areas such as national security, infrastructural works, and rural water. This spending is projected to improve quality of life.

National security spending disproportionately impacts the vulnerable who often live in areas affected by crime and/or lack of resources. One thousand more police cars, for example, will mean that ALL police stations have mobility, which has not been the case. Upgrading 60 police stations means that more resources can be employed in keeping communities safe.

The budget also allocates an eight-fold increase to rural water, with a total allocation of $795 million. An absence of safe, reliable, potable water accentuates poverty. This significant increase will allow for the rehabilitation of 280 catchment tanks, the installation of gutters and drainage in communities across rural Jamaica.

The increased focus on social protection is consistent with the theme in the budget presentation that growth and equity are mutually reinforcing.

For FY 2019/20, $20 billion has been allocated across the Government’s portfolio of major social protection programmes — a 25 per cent increase from the previous financial year. PATH Conditional Cash Grants will be increased by 16 per cent, while allocations to PATH Transportation, Examination Fees, and School Feeding will increase by 90 per cent, 50 per cent and seven per cent respectively.

In addition, $126 million has been set aside to facilitate the establishment of two shelters for women victims of domestic abuse; $1.4 billion for the Citizen Security and Justice Programme, which provides social intervention and social inclusion strategies in vulnerable communities across the island; and $1 billion for a new and innovative social housing programme which aims to provide indigent housing, relocation of vulnerable communities, and upgrading of tenement yards.

Importantly, funds have also been budgeted to finalise the six Codes of Practice and attendant Regulations under the National Disabilities Act. This will be an important step in facilitating the inclusion of the population of the disabled in national development.

The budget’s focus on social protection reflects a deliberate effort to ensure that a wide cross section of the Jamaican society directly benefits from Jamaica’s economic gains earned through fiscal discipline.

As our debt continues to trend downwards from a high of approximately 60 cents in 2009/10 for every budgeted dollar to 34 cents for debt servicing in the current financial year, our leaders continue to practise fiscal discipline, our institutions are strengthened, and macroeconomic stability becomes more entrenched, the Government is intent on continuing to implement measures that ensure the poor and vulnerable are protected.

 

— Karelle Samuda, PhD, is a Jamaica House Fellow assigned to the Ministry of Finance and the Public Service.

— Stephanie Abrahams, MBA is a Senior Analyst in the Office of the Minister of Finance and the Public Service.

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