Friday, March 25, 2011

Energy again

FROM early last year I pointed out that Jamaican businesses were feeling inflationary pressures and that as soon as the economic recovery started we would begin to see price increases. Additionally I indicated that oil and food prices would see increases come 2011. Because of what I expected, when oil was around US$50 per barrel I invested in solar equipment and have never regretted it. I believe the time to do such investments is before the crisis, and at the time I encouraged everyone to do the same.

Oil is now trading above US$105 per barrel and JPS will be hiking rates by 10 per cent. The NWC has hinted at a rate increase. My only regret is that I did not fully replace JPS. However, I didn't expect the Middle East uprising which has caused oil prices to increase so quickly.

So here we are once again, having been in this position in 2008, but forgetting about that period as a result of oil prices plummeting in 2009. The "9 day wonder" psyche of Jamaicans. Similarly, when we had drought conditions last year everyone was complaining about the need to improve the water supply infrastructure. The government announces the two-month closure of the Bog Walk Gorge to improve the water supply and receives many complaints. So we may once again complain about the water supply infrastructure at the next drought.

While the immediate crisis we face is energy, we must look beyond that, as graver implications are yet to come. The increase at the pumps and light bills is just the tip of the iceberg if oil prices continue to remain over US$100 per barrel. The real problem lies in the threat to global economies, which could lead to further social unrest around the globe, as higher energy costs translate into higher commodity and food prices also. This is at a time when unemployment levels are still relatively high and disposable incomes have declined considerably.

The Jamaican economy will no doubt have to be propped up by government spending, for example the JDIP and PIOJ Growth Inducement Strategy. While I advocated this for a while, as it was clear as day it would be needed, my only caution is that monies be spent wisely to ensure maximum sustainability or else we find ourselves chasing our tails again.

2011 is shaping up to be a difficult year for consumers, businesses, and the government. Already we are seeing that government will have to support the economy, as private capital will be very cautious in this environment. The fact is that businesses follow consumer expenditure and all indicators are that disposable income levels will be hit even further this year. The signs include increases in flour and baked products; increases by JPS, NWC, and the knock-on effect on other products; increases at the gas pumps; and a struggling global economy.

If you look at the recent major spending in the economy, and expenditure to come, they include (i) Falmouth Pier; (ii) JDIP work; and (iii) PIOJ Inducement Strategy. These are all government expenditure and are what the economy will have to continue to rely on in the short term. The main challenge with this is going to be the bureaucracy and the time it will take for the funds to be rolled out, and therefore it may not provide the greatest value added because of that.

It is clear therefore clear that the country and government are going to face challenges. The government in particular will be faced with the dilemma of soft revenue (because of a decline in disposable income), unemployment, and reduced company profits, and the fact that it has to be the primary driver of expenditure in the economy. So while the prudent thing seems to be to reduce the tax burden to drive economic expenditure, they are going to be faced with increased spending demands and weak revenue. So the million-dollar question is how to successfully juggle these demands versus what is needed, as it is going to be very difficult.

My own view is that there is no alternative but to programme further value-added loans in order to accomplish some form of vibrancy in the economy while keeping the wheels of government moving. Because I had expected this would happen I was calling from last year for greater stimulus spending from the government, as today there would be a reduced need for government spending.

I don't think, however, that anyone expected such a rapid rise in oil prices, which has also hastened the need for government expenditure. The immediate challenges we face continue to be energy and food, and should be the target of much of the expenditure to reduce costs to the country.

Ineffective Strata Commission

Since my article last week I have received much feedback to say that although my general thoughts about the strata commission are correct, it is actually much worse. An example was used that if someone owed maintenance fees of $250,000 for two years (assuming monthly maintenance of $12,500 ) and refuses to pay, then to access the recovery provision under the strata act through sale, you not only have to pay the $5,000 before the commission will talk to you but have to get two valuations on the property (approximately $100,000), advertise (approximately $50,000) and then wait at least three months before any action can be taken. So at the end of the period the corporation would have paid $155,000 to collect a $250,000 debt and would have to wait at least six months before they could recover (between the three-month waiting period and period to close the sale).

So my question then is, what value do Strata plans get from registering with the commission, as by the time one collects the debt the corporation is bankrupt and the property is run-down anyway. The Act is therefore a bigger burden to the corporation than it is to the delinquent owner. But as the often quoted saying goes: "The man who plays by the rules gets shafted". Welcome to Jamaica.

And understand this: the Strata corporation has no choice but to register with the commission, as it will be in breach and fined if it does not. Further, if it does not abide by the Act then it can be fined significant sums, which it will be unable to pay as it cannot collect maintenance.

My recommendation is that the government should suspend any requirement for Strata plans to register with the Commission and change the Act to conform more with the objective of protecting Strata properties. The fees paid already would be carried forward until the first year after the appropriate amendments. Otherwise this is nothing more than an unjust tax.

So the motto for the Strata Commission should be, "Contributing to the demise of strata properties....for a fee, of course".

35 comments:

Anonymous said...

We're a gaggle of volunteers and opening a new scheme in our community. Your web site offered us with helpful info to work on. You have performed an impressive process and our whole neighborhood shall be grateful to you.

Have a look at my weblog bmr calculator for women

Anonymous said...

I am sure this paragraph has touched all the internet users, its really really fastidious post on building up new
web site.

Also visit my web blog; calories burned calculator

Anonymous said...

I know this site offers quality dependent articles and other data,
is there any other web site which presents such things in quality?


Stop by my blog; bmi Calculator female

Anonymous said...

Your way of describing all in this piece of writing is genuinely nice, all be
capable of without difficulty understand it, Thanks a lot.


Also visit my page; basal Metabolic rate calculator

Anonymous said...

I've been exploring for a little bit for any high-quality articles or weblog posts in this kind of house . Exploring in Yahoo I eventually stumbled upon this website. Reading this info So i am satisfied to show that I have an incredibly good uncanny feeling I discovered exactly what I needed. I most no doubt will make certain to do not put out of your mind this web site and give it a glance on a constant basis.

Here is my homepage; waist to height calculator

Anonymous said...

When someone writes an article he/she keeps the image of a user in his/her mind that how a
user can be aware of it. Therefore that's why this post is amazing. Thanks!

Here is my web site ... waist to height ratio ranges

Anonymous said...

This paragraph will assist the internet visitors for
setting up new blog or even a weblog from start to end.



Here is my web site how to lose weight fast

Anonymous said...

That is very interesting, You're a very skilled blogger. I've joined your feed and sit up for searching for extra of your great post.

Additionally, I've shared your web site in my social networks

Also visit my page - bmr calculator

Anonymous said...

My relatives always say that I am killing my
time here at net, except I know I am getting knowledge all the time by reading thes nice articles.


my site ... bmi chart female

Anonymous said...

Unquestionably believe that which you stated. Your favorite reason appeared to be on the net the simplest thing to be aware of.
I say to you, I definitely get irked while people consider worries that they just don't know about. You managed to hit the nail upon the top and defined out the whole thing without having side effect , people could take a signal. Will probably be back to get more. Thanks

My site - airplane simulation games

Anonymous said...

This piece of writing will help the internet viewers for creating new webpage
or even a weblog from start to end.

Feel free to surf to my blog how to file bankruptcy in florida

Anonymous said...

What's up every one, here every one is sharing such familiarity, so it's pleasant to read this blog,
and I used to pay a quick visit this blog every day.



Feel free to surf to my website :: Diets That Work For Women

Anonymous said...

I wanted to thank you for this excellent read!! I absolutely loved every bit
of it. I have you book marked to check out new things you post…

Have a look at my blog online Graduate certificate programs

Anonymous said...

You can certainly see your skills within the work you write.
The arena hopes for even more passionate writers such as you who aren't afraid to mention how they believe. At all times go after your heart.

Here is my website ... best registry cleaner for windows 7

Anonymous said...

I simply couldn't leave your website prior to suggesting that I extremely loved the standard info a person provide for your guests? Is going to be back regularly in order to inspect new posts

my weblog :: windows xp registry cleaner

Anonymous said...

Fabulous, what a blog it is! This blog provides helpful data
to us, keep it up.

Stop by my web blog :: basal metabolic rate calculator

Anonymous said...

I am not sure where you are getting your info, but great topic.
I needs to spend some time learning more or understanding more.
Thanks for excellent info I was looking for
this information for my mission.

My web page :: how much should you weigh

Anonymous said...

It is perfect time to make some plans for the future and it is
time to be happy. I have read this post and if I could I desire to suggest you
some interesting things or tips. Maybe you could write next articles referring to this article.
I desire to read even more things about it!

My blog; raspberry ketone reviews

Anonymous said...

It's amazing in favor of me to have a web page, which is beneficial in support of my knowledge. thanks admin

My webpage :: bmr calculator to lose weight

Anonymous said...

great points altogether, you simply won a logo new reader.
What could you suggest in regards to your put up that you just made
some days in the past? Any positive?

Check out my webpage: healthy diet plan

Anonymous said...

I've been surfing online more than three hours as of late, but I never discovered any attention-grabbing article like yours. It is lovely value sufficient for me. In my view, if all web owners and bloggers made excellent content material as you did, the web can be much more useful than ever before.

Here is my site - diet that works

Anonymous said...

Hiya very nice site!! Man .. Excellent .. Amazing .
. I'll bookmark your web site and take the feeds also? I'm glad
to search out numerous useful information here in the publish, we'd like work out extra strategies in this regard, thanks for sharing. . . . . .

Have a look at my blog post: bmi Calculator Female

Anonymous said...

We are a group of volunteers and opening a new scheme in our community.

Your website offered us with valuable info to work on.
You have performed a formidable activity and our whole group will be thankful to you.



my page ... https://cryptoparty.org/index.php?title=User:ReneeS37

Anonymous said...

magnificent issues altogether, you simply gained a new reader.
What would you recommend about your submit that you just
made a few days in the past? Any positive?

Here is my webpage best way to lose weight fast

Anonymous said...

Have you ever thought about creating an
e-book or guest authoring on other websites? I have a blog based on the same topics you discuss and would love to have
you share some stories/information. I know my audience would value your work.
If you're even remotely interested, feel free to shoot me an e-mail.

Feel free to surf to my web site - how to lose Weight fast

Anonymous said...

whoah this blog is excellent i really like studying
your articles. Keep up the great work! You already know, many people are hunting round for this
information, you can aid them greatly.

my homepage in nude

Anonymous said...

Wonderful website you have here but I was curious about
if you knew of any community forums that cover the same topics talked
about here? I'd really like to be a part of online community where I can get responses from other experienced people that share the same interest. If you have any suggestions, please let me know. Thanks a lot!

My web blog - http://orionhs.org/phpnuke/modules.php?name=Your_Account&op=userinfo&username=AndrewJCW

Anonymous said...

I go to see every day some blogs and sites to read articles or reviews,
however this web site offers quality based posts.


Stop by my site - click here

Anonymous said...

Hello i am kavin, its my first time to commenting anyplace, when i
read this piece of writing i thought i could
also make comment due to this good post.

Check out my site how much should you weigh

Anonymous said...

Thought-based goals basically cancel out your happiness for today
because of the simple ways to How Do I Get A Girlfriend? Really
the question in all of this, there are 5 top personality traits that how
do i get a girlfriend? If your ex wants you back, it's vital that you nurture the friendship into one that is going to want to return back to your canned foam again.

Feel free to visit my web blog :: how to get girlfriend

Anonymous said...

Today, the majority of the auto insurance verification form must check out the regulation of that country.
He said he will appeal to independent Auto Insurance Verification Form agents with products such as low mileage-discounts tied to OnStar, a security and safety service available in GM cars, so that motorists who drive less pay less.


Feel free to surf to my web site auto insurance *http://philsautoinsurance.com*

yanmaneee said...

curry 5 shoes
yeezy
kd 12 shoes
yeezy supply
supreme clothing
longchamp
yeezy 350
longchamp outlet
jordan shoes
moncler jacket

Unknown said...

his explanation best replica bags online you could try here replica designer backpacks look at these guys luxury replica bags

neyteigh said...

redirected here dolabuy Loewe Full Article dolabuy gucci check my reference dior dolabuy

Unknown said...

replica bags online fake gucci q2g73g8s99 replica bags wholesale mumbai replica bags thailand look at here now l6p97x0p84 joy replica bags review This Site q0s88j7h09 bags replica ysl replica bags in dubai k6i07d5v91