IN a very balanced piece in the Sunday Gleaner entitled “After the Eurobond: transparency fiscal reform”, former financial secretary Colin Bullock congratulated the government on raising US$400 million in the eurobond market, noting that “Coming a year after a painful restructuring of domestic debt, and with concerns about heightened debt in a context of protracted economic contraction, the achievement is even more remarkable.”

Bullock argued that “The Government must have presented its case well” in view of the concerns about debt, economic contraction and unemployment, gently noting that “After the debt exchange, the assertions of always honouring our debt would have had to be less strident than in earlier years”, the latter talking point having been one of the key bond marketing strategies of his former boss.

He argued that “the selling points would have related to a willingness to make difficult decisions and a clear picture of a brighter future” as “The alteration of the terms of domestic debt, and the accompanying sharp increase in external debt, would not have inspired confidence.”

Bullock argues that the biggest thanks for the success of the issue goes to the IMF. In its latest report, released the Friday before the bond offering a week ago on Monday, the IMF’s argued that quantitative targets had been met, there were understandable lags in structural reforms, but it will help Jamaica enhance its prospects for growth.”

Bullock is right that it is still a remarkable achievement to be able to borrow US$400 million from the capital market only one year after our debt restructuring, particularly for an economy that is still not growing with our very high levels of debt and unemployment. In the months immediately following the debt restructuring last year, many international investors had been concerned about our ability to roll over the May Eurobond, doubts that have clearly been put to rest with the successful prefunding of the upcoming maturity. As expected, the price for the 2019 seems to be settling near the 100.75 resistance level, or about half a point above last week’s offer price. Key indicators of macroeconomic stability such as net international reserves, domestic interest rates, and the exchange rate have performed much better than expected, while other key indicators such as inflation and the fiscal deficit are so far within target.

The government would have been able to demonstrate recent performance in terms of taking difficult decisions including tough fiscal measures (including a tax on gas), the divestment of Air Jamaica, and even the debt exchange and the Tivoli incursion (recent reduction in crime, particularly murder).

The most difficult part would have been selling the long-term future, including convincing foreign investors of how they would repay the debt in the medium term, of a country that is still not growing.

Oppenheimer’s Dr Carl Ross observes that “there is a lot of doubt in the market that Jamaica can engineer another round of significant deficit reduction.” As a result, “contingency budgeting in an environment like Jamaica is tough – the budget is just too tight.” He believes that a cut in public sector employment would send “a positive signal to the markets, but is politically difficult-to-impossible.”

In a Latinfinance article “Jamaica gets down to business”, former Finance Minister Omar Davies noted that in addition to the fiscal deficit, Jamaica’s challenges included the effect of higher prices for oil and foodstuffs on the balance of payments and domestic prices, the cost of the damage of “virtually continuous rains”, particularly to roads, and the issue of what the wage settlement should be” in next year’s budget. He also observed that there was no quick fix to the problem of Jamaica’s very high debt in the absence of debt forgiveness or restructuring.

The article was actually written in late 2007, but could easily describe the issues facing Jamaica three years later. The key issues of debt, bureaucracy, tax reform, job creation, land titling, education and crime that were part of the November 2007 national planning summit “Jamaica Tomorrow,” organised by the Private Sector Organisation of Jamaica, remain largely the same.

At last week’s Observer luncheon on job creation, World Travel Awards President Graham Cooke, fresh from travels to the Middle and Far East, observed that while “every country he visits is struggling with jobs” (in his case more than a hundred) Jamaica was still not communicating its message to the world. The Caribbean as a whole was “still talking to itself” rather than marketing its “unique products” and “key brands”. Jamaica, he argued, should be marketing itself as the “hub of the America’s”, and it was very sad that not one of our carriers was flying to the Middle East. In his view, Jamaica should be taking much better advantage of its location to attract the foreign investment required to drive job creation.