Adoption of the Blue Ocean Strategy has the potential to revolutionize Jamaica’s tourism industry in ways that will differentiate the island from its regional competitors, says Minister of Tourism, Hon. Edmund Bartlett.
The implementation of the strategy will not only stimulate economic growth by attracting new investments and increasing visitor spending but will, in turn, create employment opportunities across various sectors.
The Blue Ocean Strategy, developed by Professors W. Chan Kim and Renée Mauborgne, suggests that businesses can achieve remarkable success by identifying and capturing untapped market spaces, termed ‘blue oceans’. These blue oceans represent areas where competition is low or nonexistent, allowing businesses to create and capture new demand by focusing on differentiation and innovation rather than competing in overcrowded market spaces.
By targeting new customer segments, the Tourism Ministry aims to identify untapped markets, such as adventure tourism, wellness tourism, and eco-tourism, to attract a diverse set of travellers with varied interests, noting that by catering to niche segments and developing tailored experiences, Jamaica can meet the evolving demands of modern travellers. By pursuing strategic partnerships, the Tourism Ministry also plans to foster collaborations between the public and private sectors, local communities and international stakeholders.
Bartlett added that future trajectory would support the Government’s aim to break away from traditional tourism approaches and create untapped market spaces, allowing the country to thrive in an era of increased global competition.
The CARICOM Development Fund (CDF) and the African Export-Import Bank (Afreximbank) have signed a Memorandum of Understanding (MoU) to provide a framework for cooperation between the two organisations and assist with delivering services to the CARICOM Member States.
Through the MoU, the CDF and Afreximbank have pledged to collaborate and explore the best possible funding options from debt and equity capital markets to support the development of critical infrastructure projects in the CARICOM region. The MoU is a clear indication of the collective effort of both organisations to increase financing opportunities for CARICOM Member States and strengthen south-south cooperation between the African continent and the Caribbean region.
Reflecting on the MoU, the CEO of the CDF, Mr. Rodinald R. Soomer said the Barbados-based CDF is keen to work with Afreximbank to facilitate the creation of new and exciting trade and investment opportunities for the private sector in the CARICOM region. He also urged regional small- and medium-sized enterprises (SMEs) to take advantage of the generous capacity-building assistance offered by the bank, which can help them to scale up and expand their businesses.
‘As a recently established shareholder of Afreximbank, the CDF stands in partnership with the bank to assist with its newly minted regional operations. Specifically, we aim to do so by collaborating on transactions and projects that are aligned with the strategic objectives of the Africa-Caribbean Trade Initiative and by supporting client awareness of the services that will be offered to the Caribbean private sector to enable them to do business with Africa. This partnership and commitment of the CDF’s support are affirmed through the signing of the MoU between CDF and Afreximbank’, stated CEO Soomer.
In December 2022, the Board of Directors of Afreximbank approved funding worth 1.5 billion USD to aid CARICOM Member States in accessing the bank’s financing instruments. This funding will support SMEs and various economic sectors, such as renewable energy, tourism, and agriculture.
The head of an influential European business lobby in China said Beijing needs to send a clear message on how it plans to revive its economy and provide clarity on a national security crackdown that is unnerving the foreign business community.
The world's second-largest economy grew at a frail pace in the second quarter, prompting top leaders to promise further policy support and analysts to downgrade their growth forecasts for the year. "There is this doubt about where China is going, so I think it is a matter of urgency to go out and address these uncertainties," Jens Eskelund, President of the European Chamber of Commerce in China, told Reuters.
"The next few months, we believe, would be quite important in terms of rebuilding confidence in the future trajectory of China," he added during an interview at the group's Beijing headquarters on Monday.
The sluggish growth also has coincided with increasing state intervention in the private sector in recent years, with crackdowns on the tech, education, health and due diligence sectors and increased scrutiny of foreign business links. At the same time, leaders have vowed more support for embattled private entrepreneurs and called for more overseas investment, but confidence remains low.
Eskelund, who is also Chief Representative for Danish shipping giant Maersk in Greater China and Northeast Asia, added that while he believes a recession is unlikely, Beijing should prioritise boosting consumption, as well as providing more clarity on ambiguous legislation such as a sweeping anti-espionage law that has dented foreign business confidence. "Our recommendation to the government is really to try to establish the highest possible level of clarity on these issues that would give us firm guardrails that we know to stay within," he said.
S&P Global Ratings is downgrading the credit ratings of five banks, including some of the nation's largest lenders: Associated Banc Corp; Comerica Inc.; KeyCorp; UMB Financial Corp.; and Valley National Bancorp.
The credit agency pointed to "tough operating conditions" that are straining the banking industry and also lowered its rating for two other banks. In explaining its rationale for the downgrades, S&P noted in a report on Monday that banks are facing risks that could make them "less resilient than similarly rated peers."
The move comes only two weeks after Moody's cut the credit ratings of 10 small and midsize banks because of growing financial risks and strains that could erode their profitability. Both credit ratings agencies are taking the steps in the wake of a banking crisis that began in March when Silicon Valley Bank, once the country's 16th largest bank, collapsed just days after depositors grew fearful of its solvency and made a classic bank run.
Underpinning the banking downgrades is a drastically changed lending environment compared with early 2022 before the Federal Reserve began driving up interest rates to fight high inflation. Today's higher borrowing costs mean that banks must pay more interest to depositors, while the value of some bond assets has slumped.
"The sharp rise in interest rates and quantitative tightening deployed since March 2022 to combat high inflation are weighing on many U.S. banks' funding, liquidity and spread income," S&P said in its report. "These factors have also caused the value of banks' assets to fall and raised the odds of asset quality deterioration."
At its meetings on the 16th and 17th of August 2023, the Monetary Policy Committee (MPC) opted to maintain the policy interest rate (the rate offered to DTIs on overnight placements) at 7.0% and continue to maintain relative stability in the foreign exchange market.
Jamaica’s inflation rate of 6.6% in July 2023, while slightly above the 6.3% recorded in June 2023, is significantly below the 11.8% recorded in April 2022. Core inflation (which excludes food and fuel prices from the Consumer Price Index (CPI)) in July 2023 of 5.2% was also considerably lower than the 8.4% recorded in April 2022.
While the key drivers of headline inflation, such as grain prices, shipping costs and inflation expectations, continued to decline, there was exceptionally high agricultural price inflation in June and July 2023, which reflected the impact of prevailing drought conditions. Additionally, there have been ongoing upward adjustments in the price of meals consumed away from home, and the first-round effect of the adjustment in the national minimum wage was recorded in the June 2023 CPI.
The uptick in inflation over the past three months is projected to continue for the remainder of the September 2023 quarter, driven by higher agricultural prices, higher education costs and wage pressures. Inflation is, however, expected to generally decelerate to the Bank’s target range of 4.0 to 6.0% by the December 2023 quarter and except for a few months in 2024, should remain there. The forecast assumes that international grain prices will increase in the September 2023 quarter, consequent on a rise in geopolitical tensions between Russia and Ukraine.
Inflation could, however, rise above this forecasted path. Higher-than-projected future wage adjustments in the context of the tight domestic labour market, second-round effects from the agricultural price inflation, a worsening in supply chain conditions and an elevation of world oil prices could put further upward pressure on inflation.
However, inflation expectations for the 12 months ahead declined to 8.3% in June 2023 from 9.6% in the previous survey and its peak of 12.8% in April 2022. This was due mainly to businesses’ perception of the authorities’ control of inflation which improved in the June 2023 survey relative to the previous survey.
Downside risks to this outlook include weaker-than-expected global growth, which could reduce domestic demand, and the non-materialisation of some projected increases to regulated prices.
The MPC noted that future monetary policy decisions will depend on the incoming data related to the indicators of the above-noted potential headwinds to inflation. The Bank will continue to closely monitor the global and domestic economic environments for potential risks to Jamaica’s inflation rate and act accordingly.
The Planning Institute of Jamaica (PIOJ) is projecting a fall in the poverty rate from 16.7 per cent to which it rose in 2021, representing a 5.7 percentage point increase relative to 2019.
Director General, Dr. Wayne Henry, notes that the out-turn reflected the adverse impact of the COVID-19 pandemic on household incomes and consumption, which “is in keeping with global and regional expectations and experiences”.
Henry indicated, however, that the impact was tempered by positive movements in the macro economy and social interventions by the Government and the private sector.
Henry said the overall rise in poverty in 2021 was driven by increases in two regions, noting that the rate in the third was statistically the same. He informed that the rate increased in the Greater Kingston Metropolitan Area by 5.7 percentage points and rural areas by 7.9 percentage points but remained relatively unchanged in other urban centres.
He stated that while the Jamaican economy recorded growth of 4.6 per cent in 2021, and employment increased by 8.3 per cent in July 2021 relative to July 2020, real GDP (gross domestic product) was still 5.8 per cent below its 2019 level and employment was 3.3 per cent below what it was in July 2019. These factors explain the higher poverty rate in 2021 relative to 2019. The World Bank estimated that in 2021 about 97 million more people were living on less than US$1.90 per day because of the pandemic, increasing the global poverty rate from 7.8 per cent to 9.1 per cent.
Additionally, 163 million more were living on less than US$5.50 per day. Globally, three to four years of progress towards ending extreme poverty are estimated to have been lost. In Jamaica, consumption expenditure data rather than income are used to measure poverty, due to the availability and relative accuracy of the statistics.
The rates are first calculated from household data at the regional level and then aggregated nationally.
He further highlighted that similar to most economies, Jamaica was still recovering from the COVID-19 pandemic in 2021. Going forward, the poverty rate is expected to fall, given the continued improvement in the economy, as reflected in the improvement in real GDP and employment.
More than 200 ships are stuck on both sides of the Panama Canal after authorities capped the number of crossings because of a severe drought. The large vessels, thought to be carrying millions of dollars worth of goods, are locked in a traffic jam with some waiting for weeks to cross.
Vessel-tracking data highlights the extent of the issue with hundreds of ships, mainly bulk cargo or gas carriers, seen waiting near entrances to the canal on the Pacific and Atlantic oceans.
The number of daily transits through the canal has been capped at 32 by water authorities in a bid to conserve water. Panama is set to lose $ 200 million in revenue from the delays and it could cause a spike in US grocery and parcel prices as extra fees are hiked onto shipping costs.
The entrances on both sides of the Panama Canal are jammed with some ships backed up for more than 20 days. Some shipowners have resorted to rerouting their journeys to avoid the backlog. The canal uses three times as much water as New York City daily and needs rainfall to replace it.
However, the rainy season is yet to arrive in Panama and the canal is going through its driest spell in more than a century. Restrictions for the number of vessels passing through have been extended until September 2. Without enough rain, the ship transits are cut and the lucky ones that cross pay hefty premiums. This increases transport costs for cargo owners like American oil as well as Asian importers and gas exporters.
Ricaurte Vásquez Morales, the administrator of the Panama Canal, warned the restrictions could remain in place for the rest of the year.
Exxon Mobil Corp and partners plan to spend $12.93 billion to develop their sixth offshore oil project in Guyana, according to a filing published on Monday by the South American country.
The floating production platform for the so-called Whiptail project would start operations in 2027 and bring the Exxon-led consortium's oil output in Guyana over 1.2 million barrels per day (bpd).
Guyana has emerged as the world's fastest-growing new oil province in a decade with discoveries of more than 11 billion barrels of oil and gas. Exxon and partners Hess Corp and CNOOC Ltd now produce 400,000 bpd from two vessels and have said they could develop up to 10 offshore projects.
Their production has brought $2.8 billion in direct revenue to Guyana and employed some 4,400 Guyanese.
The Whiptail project outlined in the Environmental Impact Analysis made public on Monday by the government is similar to Exxon's fifth project - Uaru - with an output of 250,000 bpd and an upper production limit of 263,000 bpd. Exxon, Hess and CNOOC committed to spending $12.7 billion for Uaru earlier this year.
The partners plan to drill up to 72 wells with development drilling scheduled from late 2024 through mid-2030. Installation of subsea components would begin in the second half of 2025 or early 2026, according to Exxon.
The project is expected to employ up to 540 people during the drilling and installation stage and from 100 to 180 people during production operations, Exxon said in the document to Guyana's Environmental Protection Agency (EPA).
Global government bond yields extended their climb — with the US 30-year reaching the highest point since 2011 and other benchmarks returning to 2008 levels as resilient economic data challenges the view that central bank rates are peaking.
Both 5-year and 10-year Treasury yields rose Thursday to within a few basis points of their 2022 highs. The 30-year yield advanced as much as seven basis points to 4.42%, putting it well above the less than 4% level it traded at as recently as July 31. The US 10-year yield climbed to as high as 4.33%, up nearly eight basis points. The equivalent UK yield jumped to a 15-year high, while its German counterpart approached the highest since 2011.
Treasuries have led the global debt selloff as the US economy defies expectations that more than five percentage points of Federal Reserve interest-rate hikes would cause a recession. Officials at the last policy meeting remained concerned that inflation would fail to recede, requiring further tightening, minutes of the meeting released last Wednesday showed.
The higher yields in the US continue to draw in buyers. Investors pumped $127 billion this year into funds that invest in Treasuries, on pace for a record year, Bank of America Corp. said last week, citing data from EPFR Global.
Data from the Department of Labour showed 239,000 jobless claims were registered in the week ending August 12, down 11,000 from the week prior.
Economists have been looking for that number to increase, and the monthly nonfarm payroll additions to fall, as the Federal Reserve tries to cool inflation. However, a historically low unemployment rate and rising wages have some seeing a path to a so-called "soft landing," where economic growth slows, inflation falls but widespread unemployment isn't present.
Jefferies US economist Thomas Simons says Thursday's jobless claims print is a small example of how the path to that soft landing is getting increasingly more likely but isn't a sure thing quite yet.
"Businesses have been extremely reticent to let go of workers that they struggled to find over the last 3 years," Simons wrote. "We doubt that they will be able to hold on to everyone indefinitely, but they're going to try. The chances of a soft landing in the labour market seem to be increasing somewhat, but there is going to be an ebb and flow on this expectation as we work through this choppy data."
