Business

Sagicor confident Jamaica will recover

BY SHAMILLE SCOTT Observer business reporter scotts@jamaicaobserver.com

Tuesday, April 30, 2013    

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A senior executive of Sagicor Jamaica is confident that the sacrifices being made by Jamaicans now will put the country on the path to economic recovery.

In fact, the only disappointment being felt by Philip Armstrong, managing director of Sagicor Bank, is that the country waited until now, when the economy is at tipping point, to start doing what is necessary to recover.

"I don't think we have a choice but to do the right thing today, otherwise we are in deep, deep trouble, and that's what makes me more optimistic about the future," Armstrong told journalists at the weekly Jamaica Observer Monday Exchange at the newspaper's headquarters in Kingston yesterday.

"I am optimistic that the economy will recover, notwithstanding that successive governments have failed to meet their objectives over many, many, many years. For the first time I think that we have in front of us [the scenario that] we have no choice," added Armstrong.

The Sagicor Bank boss was responding to a request for his overview of the economy, given that his group was among the many companies and individuals who participated in the National Debt Exchange (NDX).

The NDX is the sequel to the Jamaica Debt Exchange (JDX) of 2010 and was announced by Finance Minister Dr Peter Phillips in a national broadcast on February 11.

Basically, the NDX aims to lower the Government's annual finance costs by $17 billion, shaving an average of two percentage points off interest rates on $860 billion of the country's domestic debt.

It was the second time in three years that holders of Government bonds and financial institutions were being asked to take a cut on interest.

Sagicor Group Jamaica, as well as Scotiabank Group and Jamaica Money Market Brokers -- three of the largest holders of Government debt -- indicated early after Phillips' announcement that they would participate in the programme.

Full participation in the NDX was a requirement of the International Monetary Fund to which Jamaica has applied for financial assistance.

While the NDX is expected to affect Sagicor's financial performance significantly this year, the programme's negative impact is not expected to impair the solvency of companies within the group.

Yesterday, Armstrong said he accepted that the country was going through tough times. However, he reiterated his optimism that the measures being implemented will correct that.

"My only disappointment is that it took us getting here to realise what really needs to get done," he said.

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