The 2001/02 Budget, including Finance Committee amendments, amounts to $185.4 Billion, allocated between Recurrent and Capital expenditure as follows:

This Budget is an increase of $18.0 Billion over the 2000/01 Approved Budget but a decrease of $3.1 Billion over the Revised Budget 2000/01.

The Recurrent Budget is broken out as under:

Capital expenditure is allocated as follows:

A. Public Debt – (Debt dominates – whole section on debt management)

Debt servicing (interest payments and amortization) amounts to $115.7 Billion or 62.4% of the total Budget, up from $105.3 Billion or 56% in the 2000/01 Revised Budget. In terms of interest payments, the allocation for 2001/02 is $48.456 Billion as against $43.334 Billion in 2000/01 – an increase of $5.122 Billion.

(i) Domestic Debt

The total domestic debt (interest and amortization) is:

In terms of domestic interest payments, there is a net increase of $2.3 Billion over the revised provision for 2000/01 Financial Year. This is due mainly to interest payments of $8.1 Billion on Local Registered Stock made with respect to the Government’s intervention in the financial sector through the Financial Sector Adjustment Company Limited (FINSAC).

The main areas of reduction over the 2000/01 revised allocations are:

• Interest on Local Registered Stock issued to BOJ – reduction of $2.9 Billion due largely to a reduction in amounts payable to BOJ caused by reclassification and lower projected interest rates.
• Interest on GOJ Investment Debentures –$2.2 Billion
• The reduction is mainly as a result of lower interest rates and lower interest impact (interest paid once instead of twice for the year).

Amortization of the domestic debt is expected to increase by $4.8 Billion in 2001/02 compared to 2000/01. Factors accounting for this increase are:

• the maturing of more and larger stocks of Local Registered Stock of varying maturities issued in previous years;
• the reduction in the volume of maturing Investment Debentures issued in previous year, to refinance other maturing debentures;
• lower volume of US$ issues maturing;
• no maturing stocks to BOJ’s account;
• projected lower level of Treasury Bills redemptions.
• in 2000/01 provision was made for the redemption of guaranteed FINSAC debt of $7 Billion. This year no provision is made.

(ii) EXTERNAL DEBT

The total external debt is $25.69 Billion as under:

The areas reflecting increases in interest payments are market issues and loans from multilateral and international bodies. These increases are partially offset by decreases relating to Institutional (commercial) loans. Regarding amortization of the external debt, increases are reflected under Institutional loans and loans from multilateral and international bodies.

(iii) Interest

Market Issues

A significant increase in the stock of market issues (i.e. International Bonds) combined with the higher costs of these new debts accounts for the variations in interest charges under this category.

1. HEALTH SERVICES

The amount of $7.7 Billion or 4% of the overall Budget has been also allocated to Health. In terms of non-debt expenditure, this allocation represents 11% of the Budget (compared to 10.3% of the Original Budget in 2000/01).

In keeping with the decentralization of the administration and delivery of health services, $5.685 Billion or 80% of the Ministry of Health’s Recurrent Budget has been allocated to the Regional Health Authorities. Included in this is $3.9 Billion for salary payments. Compensation to employees, including salaries to medical and para-medical personnel, nurses and administrative staff constitutes approximately 63% of the Ministry of Health’s Recurrent Budget.

The 2001/02 provision includes:

• $460 Million for pharmaceuticals and medical supplies (for hospitals and health centres)
• $662 Million for the University Hospital
• $117 Million for training of health professionals
• $50 Million for the Jamaica Drug for the Elderly Programme (JADEP).

CAPITAL A

The major allocations are:

• $12 Million for Project Inner City (Focus). The objective of this project is to establish the necessary infrastructure within five rural and urban communities, to develop self-sustained integrated demand reduction programmes in an effort to reduce the demand for drugs.
• $10 Million to assist with making available reasonable cost drugs and first aid supplies to the users of the approximately 12 Drug Windows islandwide.
• $20 Million to procure equipment for selected hospitals.
• $22 Million to maintain and upgrade the buildings and equipment of health care institutions.
• $41 Million to maintain disease prevention and control measures, such as surveillance of water supplies, food trade and sewage disposal systems.

CAPITAL B

The allocation for this Head is $400 Million of which $366 Million relates specifically to Health Services. The Ministry of Health has completed civil works on its largest project – Health Services Rationalization Project; hence the reduction of $100 Million over 2000/2001. Nevertheless, this project has received the largest share of the Ministry of health’s Capital B allocation - $170 Million. The amount will go toward equipping the Mandeville, St. Ann’s Bay and Kingston Public Hospitals and payment of outstanding commitments.

In addition, $137 Million has been allocated to the Health Sector Reform Programme.

Two new projects are included in the 2001/02 Capital B allocation, namely:

2. TOURISM

The Tourism function which has been allocated $1.9 Billion of which $1.62 Billion relates to recurrent expenditure and $279.5 Million to Capital projects. On the recurrent side, the Jamaica Tourist Board (JTB) has been allocated $1.416 Billion as against $1.378 Billion allocated in 2000/01, an increase of $38 Million. Of the $1.4 Billion allocated to JTB, $812 Million relates to overseas marketing, up from $792 Million in 2000/01.

In the Capital side $279.5 Million has been allocated to:

3. ROADS

A total of $2.21 Billion has been allocated to roads in this Budget most of which has been provided under the Ministry of Transport and Works (MTW). Of this amount, $1.89 Billion has been allocated to MTW for Capital projects for the construction, rehabilitation and maintenance of roads. In addition, $620 Million is to be allocated from the Parochial Revenue Fund under the Ministry of Local Government, Youth and Community Development to the Parish Councils for the maintenance of parochial roads.

CAPITAL A

Under the Ministry of Transport and Works, Capital A Head, $606.7 Million has been allocated for the rehabilitation and maintenance of roads. The routine road maintenance programme which commenced in 1999/2000 will continue. This involves primarily pothole patching, bushing and drain cleaning. The aim of the programme is to stem the further deterioration of the country’s road network which could lead to major rehabilitation work in the future.

The Ministry will continue to implement programmes to rehabilitate over 1000 km of roads through deferred financing arrangements. Improvements to these roadways should lead to a reduction in vehicle operating costs and agricultural losses. The roads include:

• Hope Road Widening - $245.9 Million

The contract is substantially complete and practical completion was certified as of September 2000. The roadway was opened to regular flow of traffic in both directions on Sunday October 1, 2000. Completion of construction works at Kings House Gate and UTECH are expected during the first quarter of the financial year 2001/02.

• Washington Boulevard/Mandela Highway - $264 Million

Civil works commenced on March 12, 2000 and are scheduled for completion in this financial year. Work on the Mandela Highway is now practically complete. On Washington Boulevard, the work is at approximately fifty-percent (50%) completion.

• Old Harbour Road/Trafalgar Road/Moneague - Faiths Pen - $282.6 Million Trafalgar Road - $63 Million

Civil works include the widening of the roadway in order to have four lanes. The work is approximately 20% complete and is scheduled for completion early this financial year.

• Mount Diablo – Moneague - $108.3 Million

Civil works include road improvement to reduce steep curves and is scheduled for completion in early 2001.

• Old Harbour Road Roundabout – Bushy Park - $111.3 Million

Civil works include resurfacing and drainage improvement. Most of the work has been completed.

CAPITAL B

A total amount of $1.3 Billion has been included under the Ministry of Transport and Works Capital B to undertake the following road projects:

For financial year 2001/02 the Ministry of Transport and Works will continue works on the following road projects:

• Old Harbour Bypass Project - $353.5 Million

This project addresses the construction of 14.24 km of a two (2) lane highway bypassing the town of Old Harbour thus reducing the level of traffic congestion. The project is about 70% complete and is expected to end in August 2001.

• Road Rehabilitation and Institutional Strengthening - $187.7 Million

This is an ongoing projects which involves the construction of walls, pavements; excavation and drainage works; and bushing. For this financial year the Ministry of Transport and Works will continue the upgrading and maintenance in order to restore the road network to international standard. The project is expected to be completed in March 2002.

• Northern Jamaica Development Programme - $740.6 Million

This project constitutes three segments and a sub-project – South Gully. Construction works of segment 1 and the South Gully project are scheduled for completion in December 2001. The other segments would be completed at a later date. The objective of the programme is to improve the infrastructure and drainage within the Northern Coast of Jamaica.

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Ministry of Finance and The Public Service Telephone: (876) 922-8600 (switchboard)   (876) 932 4656 (direct) Fax: (876) 922-7097 Contact: Ms Cheryl Smith or send mail to info@mof.gov.jm

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