Don Wehby

Minister (without Portfolio) in the Ministry of Finance and the Public Service Don Wehby took the opportunity earlier this week to explain to Caribbean Business Report how the new administration will attend to the financial welfare of the country.

"We wish to state for the record that this administration is committed to sound macro-economic management: maintaining stability in the Money and Foreign Exchange Market, the maintenance of single-digit inflation, and the lowering of domestic interest rates.

"The recent increases in local interest rates, though undesired are not unexpected in the current context. What is important is that the market understands that the government will be doing everything, from its end, to ensure this is not a protracted phenomenon.

On the fiscal side, Wehby said the government's primary objectives are moderating (and ultimately reducing) the fiscal deficit and proactively managing the national debt.

"When considering the national debt, our first aim is to accelerate the pace at which the portion of the budget allocated to debt servicing is reduced. Our eventual goal is that of reducing the debt stock," declared Wehby.

Currently the entire fiscal programme is being reviewed in keeping with the new administration's mandate, and the challenges outlined above.

" Our primary objective is generating a greater degree of fiscal discipline throughout the entire public service. While at the same time, and within the context of a tight budget, ensuring government has adequate resources to carry out its functions effectively. Fiscal targets, once set must be met; this cannot be an issue for debate,' said the former deputy CEO of Caribbean conglomerate, GraceKennedy.

Addressing concerns about the level of expenditure he explained, "On the expenditure side we are currently examining possible ways to strengthen the existing Budget Information System to:

1. Develop a greater sensitivity as to the need to cut any unnecessary expenditure by the various Ministries, Departments and Agencies (MDAs) that form part of the public service

2. Ensure all budgets developed are realistic estimations of what the various MDAs are required to spend, to successfully carry out their mandate from a resource perspective, during a given fiscal year

Garnering revenues has for a number of years proven rather worrisone and this has not escaped Minister Wehby's attention.

" On the revenue side, the administration, is currently examining ways to widen the tax net. As such we are examining various tax reform initiatives. The logic being that if the tax net is sufficiently broadened, we will ultimately be able to reduce the individual incident of taxation. However this is a medium term goal. In the short run, within the existing framework, we are examining ways to enhance compliance and thus revenue inflows."

After his first two weeks in the job how does the new Minister the business of the governance of the country?

" The administration did not expect that running the government would be easy. There are many challenges to be overcome, yet at the same time we are confident that this new administration will be able to find the necessary solutions to ensure the economic prosperity of Jamaica for Jamaicans, as well to ensure that the country's fiscal credibility in the international capital markets is maintained.

"Indeed the international markets today demonstrated that confidence, of which we speak, in this administration. The Ministry of Finance and the Public Service successfully launched and priced within two hours the reopening of the US$350 million 8 per cent bond due in 2039, raising US$150 million on the international capital markets. The issue was more than three times over-subscribed and completes the Government's external financing needs for this financial year.

Don Wehby and his colleagues at the Ministry of Finance are presently having discussions with international investors to sensitise them about the policy direction and emphases of the new administration, with a view to be able to raise funds in the market at more attractive rates and compatible with the government's debt objectives. This will be further pursued in Washington at meetings with investment bankers, during the IMF Annual Governors Meetings.

The fear factor

Feeding the multitude

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