Central Government Budget (Fiscal Year 2000/2001)

The FY 2000/01 Budget amounts to $167.4 billion allocated between recurrent expenditure of $95.5 billion or 57.1% and capital expenditure (including amortization) of $71.8 billion or 42.9%. This Budget represents a 4.6% increase over the Revised Budget for FY 1999/00 and a 6.2% increase over the Approved Budget.

Of the recurrent budget, $54.1 billion is allocated to wages and programmes and $41.4 billion for interest payments. With respect to the capital budget, $14.8 billion is allocated to capital programs (projects), $0.9 billion to the IMF #1 account and $56.1 billion for amortization.

Allocation to debt servicing (interest and amortization) amounts to $97.5 billion representing 58.2% of the total Budget, down from 62% in FY 1999/00.

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Wages and salaries constitute the largest portion of non-interest recurrent expenditure, accounting for 64%, about the same as in the previous fiscal year.

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This category of expenditure has been allocated 72.6% of the Budget and includes such functions as state services, Public Debt Management and Security Services. The main contributor to this relatively high allocation is debt servicing which accounts for 58.2% of the Budget. Interest payments account for 43% of the recurrent budget.

Included under the category General Services is $110 million allocated to the Statistical Institute of Jamaica to allow for the implementation of Phase 1 of the 2001 Population Census.

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The allocation for interest payment is $41.4 billion, $0.5 billion less than the revised amount for FY 1999/00. Domestic interest amounts to $33.1 billion while external interest amounts to $8.3 billion. For FY 1999/00, these amounts were $35.2 billion and $6.9 billion, respectively.

The increase in external interest payments mainly reflects interest payments of $900 million on the Euro 200 million fixed rate 10% bonds issued by the Government in the European markets in February 2000. These bonds will mature in 2003.

Amortization accounts for 78% of the Capital Budget. In terms of its composition, domestic amortization accounts for approximately $43 billion while external amortization for $13.1 billion. In FY 1999/00, domestic debt payment stood at $39.4 billion while external debt payment stood at $16 billion.

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SOCIAL AND COMMUNITY SERVICES

This category of expenditure constitutes 18% of the Budget and includes such functions as Education and Culture, Health and Water Supplies.

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The Ministry of Education and Culture continues to receive priority in the allocation of resources. In FY 2000/01, a total of $18.5 billion or 26.3% of the non-debt expenditure has been allocated to this function.

In order to carry out its mandate effectively, a number of new activities will be incorporated under the following existing programmes:

This programme has been allocated $570 million, an increase of $160 million and is earmarked for;

• Assignment of one (1) trained teacher each to forty-five (45) selected basic schools;

• Equipping early childhood education providers with skills to deliver stimulation and readiness programmes.

This programme has been allocated $5.2 billion, an increase of $600 million. This is approximately 33.3% of the Ministry’s recurrent budget and indicates the level of priority given to this programme. The provision is intended to facilitate on-going activities geared towards improved levels of quality education as well as to accommodate the following activities:

• Implementation of Grade 4 summer school programme aimed at achieving 90% literacy in primary school children by the year 2005;

• Implementation of new mathematics and language arts curriculum in 96 schools under the GOJ/USAID New Horizon Project. The objective is to increase the numeracy and literacy levels of children in specially targeted schools.

• Full institutionalization of the National Assessment Programme;

• Continued mobilization of community support for improved attendance in schools.

The allocation of $4.9 billion for secondary education, which is 28% of the Budget, includes $200 million to provide assistance to needy students who are unable to pay school fees.

Other activities earmarked for FY 2000/01 include:

• Reclassification of all Comprehensive High to "High Schools" effective September 2000;

• Increased grants to All Age schools in order to bring them in line with Junior High schools.

The allocation of $2.7 billion for Tertiary Education is earmarked for the following:

• Implementation of training programmes at University of Technology (UTECH) for public health inspectors. Training for this category of workers was formerly administered by the MOH;

• Administration of and co-ordination of the selection process for new scholarship awards including twelve (12) ‘millennium’ scholarships;

• Establishment of linkages with tertiary institutions through information and communication technology, to enhance student learning;

An allocation of $50.4 million to Adult Education is intended for the following purposes:

• Revision of curriculum and teachers’ guide;

• Increasing the number of Workplace Adult Literacy Training Units in order to improve access, and thereby increase the number of adults achieving functional literacy.

A total of $1.0 billion has been allocated to this Budget head in FY 2000/01. The Ministry of Education and Culture will be giving the following projects priority:

• Maintenance of buildings and equipment and the procurement of educational materials;

• Repairs and improvement to Comprehensive High Schools as well as public and school libraries;

• Procurement of furniture and equipment for schools

• Improvement of laboratories and workshops in High Schools

• Upgrading of All Age Schools

• Distance Education Programme
• Social Sector Development Project
• Improvement and expansion of primary education
• Reform of secondary education

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The amount of $7.2 billion or 4.3% of the total Budget has been allocated to the Health function. The allocation to Health represents 10.3% of the non-debt expenditure.

In keeping with the decentralization of the administration of health services, $5.2 billion or 81% of the Ministry of Health’s recurrent budget has been allocated to the Regional Health Authorities. The largest portion ($2.1 billion) has been allocated to the Southeast Regional Health Authority (SERHA) comprising the parishes of Kingston, St. Thomas and St. Catherine.

The Western Regional Health Authority, comprising the parishes of Westmoreland, Trelawny, Hanover and St. James has received the second largest portion - $948 million, North East and Southern Regions have been allocated $488 million and $638 million, respectively.

The FY 2000/01 recurrent provision also includes:

• $486 million for drugs (for Hospital and Health Centres)

• $3 billion for salaries

• $662 million for the University Hospital

• $115 million for training of health professionals

• $50 million for the Jamaica Drug for the Elderly Programme (JADEP)

The FY 2000/01 allocation for capital projects amounts to $700 million. In keeping with the decentralization of the administration and delivery of health services $109 million is allocated to projects falling within the Regional Health Authorities.

Some of the major allocations are:

• Purchase of medical equipment

• Disease prevention and control

• Establishment of additional drug outlets

• Improvements to hospitals and other health care facilities

During FY 2000/01, emphasis will be placed on the completion of the Health Services Rationalization Project and the Health Sector Reform Programme. The allocations to these projects are $297.4 million and $100 million, respectively.

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A total of $662 million has been allocated to water supplies, representing an increase of $259.6 million over the revised provision for FY 1999/2000. Approximately 88% of this allocation is related to capital projects, primarily those managed by the National Water Commission. In respect of the GOJ funded projects, $263.0 million has been allocated.

Significant provisions are:

• Rapid Response Water Project - $150 million. This provision is to allow for the rehabilitation and extension of water systems in all parishes and the installation of water tanks. Provision is also made for the maintenance of a fleet of trucks as well as the payment of head office staff and salaries to truck drivers and sidemen.

• Other Water Supply Schemes - $103 million. The provision is for small water supply schemes islandwide.

A total of $317 million has been provided for through multilateral/bilateral agencies. The main projects to be funded include:

• The Lucea/Negril Water Supply Scheme - $222 million

• Catchment Tank Rehabilitation - $50 million

• The KMA Water Supply Project– $25 million

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The main functions included under this category are Industry and Commerce, Tourism, Roads and Agriculture.

The major component of this function is the allocation of $2 billion for a new project, namely Information Technology Employment Creation and Development. The goal of this project is to employ Information and Communication Technology (ICT) to create employment and accelerate economic development. The project is for three years at a total cost of $5.0 billion and is to be funded largely from the sale of cellular licences.

Allocation to Tourism includes $1.2 billion to the Jamaica Tourist Board (JTB) and $125 million to the Tourism Product Development Company (TPDCo). With respect to the allocation for JTB, 53% or $662 million relates to overseas marketing, including advertising, public relations, events marketing and other promotional efforts undertaken by the JTB.

A total of $2.2 billion has been allocated to roads. Of this amount, $1.9 billion has been allocated to capital projects for construction, rehabilitation and maintenance of roads, excluding parochial roads, which are the responsibility of the local authorities. In addition $498 million is to be made available to the Parish Councils from the Parochial Fund for the maintenance of parochial roads. Under the Ministry of Transport & Works Capital A Budget, $658.4 million has been allocated for the maintenance and rehabilitation of the road infrastructure network. This includes $203 million for the HUB project.

In addition, deferred financing arrangements have been negotiated to allow for road construction/improvement projects in an effort to reduce traffic congestion as well as the high volume of traffic accidents on these roads. These projects are:

• Hope Road - This project should be completed in September 2000. The civil works include a four-lane dual carriageway, construction of bus bays, installation of new water mains, sewer lines and waste water culverts in order to improve the drainage system.

• Ferry/Molynes/Constant Spring Road

• Trafalgar Road - The civil works include the construction of a four-lane dual carriageway, bus bays and medians, in order to reduce traffic congestion. Proposed start up date is June 2000.

A total amount of $1 billion has been included under Ministry of Transport & Works Capital B mainly to undertake the following road projects:

• Old Harbour Bypass. Provision is for $248 million and the project is scheduled for completion in December 2001.
• Northern Jamaica Development Project. Provision of $743 million has been made. The project consists of three segments. Segment I of the project has been started and is schedule for completion in December 2000. Segments II and III are schedule for completion at a later date

A total of $2.1 billion has been allocated for this function in respect of recurrent expenditure and capital projects as against $2 billion in the Revised FY 1999/2000 Budget. Of this amount, $1.2 billion has been allocated to the Ministry of Agriculture for capital and recurrent programmes.

The major programmes under the Government funded Capital A are:

• Research and Development of which the major projects are the Crop Care Project and the Goat Commercialization Project;
• Crop/Livestock, notably the Tree Crop programme and the Domestic Food Crop project;
• Forestry and Wildlife.

With regards to multilateral/bilateral projects, the major allocations are:

• $133.4 million for the eradication of New World Screworm;

• $22.5 million for the Trees For Tomorrow project.

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Total revenue and loan receipts for FY 2000/01 is estimated at $164.5 billion. This is a marginal increase over the receipts in the previous fiscal year.

Total Revenue and grants are projected at $108.3 billion. This consists of:

• Tax Revenue - $85.7 billion
• Non-tax Revenue - $7.8 billion
• Capital Revenue - $11.2 billion
• Capital Development Fund Transfers - $3.5 billion.

Tax revenue, which comprises 79.1% of total revenue, is expected to increase by 12.7% over the provisional outturn for FY 1999/2000. It is anticipated that the full-year effect of the tax measures implemented in the previous fiscal year and improved tax administration will contribute to this increase.

Non-Tax revenues are estimated at $7.8 billion and increase of 44% over FY 1999/2000. Included in the estimate is $2.9 billion from the sale cellular licences.

Transfers from the capital Development Fund (CDF) are projected at $3.5 billion. This represents an increase of 84% over the transfers in FY 1999/2000.

Capital revenue and grants are estimated at $11.2 billion. A considerable portion of

capital revenue is expected to come from divestment proceeds estimated at $7.2 billion. Grants are projected at $1.9 billion, an increase of 159% over provisional receipts in FY 1999/2000. The increase is due mainly to the US$34m from the European Union for support to The Economic Reform Programme.

Loan receipts are projected at $56.2 billion. This is a decline 22% over the previous fiscal year.

External receipts are estimated at $18.1 billion. This comprises of $3.3 million from project loans and $14.8 billion from the international capital markets.

Domestic loans that are 68% of total loan receipts are estimated at $38.1 billion.

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