THE COUNTRY'S Net International Reserves (NIR) declined during 2002 by US$243.7 million to US$1 597.0 million, according to the Economic and Social Survey Jamaica 2002, a publication of the Planning Institute of Jamaica (PIOJ). The document was recently tabled in Parliament.
Reserves at the time of publication represented the equivalent of 27.9 weeks of imports the PIOJ said.
"This decline contrasted with the US$871.3 million increase recorded for 2001."
According to the PIOJ, lower levels of NIR for 2002 reflected the widening in the Current Account Deficit by US$216.8 million to US$716.6 million along with reduced official and private investment inflows on the Financial Account.
The widening in the Current Account deficit resulted mainly from deterioration in the goods, services and income accounts. "The worsening in the balance of payments position was the result of local and international factors," the PIOJ added.
It said local factors included the effects of flood rains in May/June and September, while international factors included an "increasingly competitive global environment and the lingering effects of the September 11, 2001 terrorist attacks on the United States of America."
Meanwhile, the exchange rate depreciated by 7.5 per cent to end 2002 at $50.97 to one US dollar. This represented a real depreciation of 2.5 per cent. The nominal depreciation for 2002 compared with a 4.1 per cent depreciation in 2001 (0.7 per cent in real terms).
TRADE POLICIES
Jamaica's New Trade Policy, which was tabled in Parliament on October 29, 2001, guided external trade in 2002. The PIOJ explained that the policy aims to facilitate the development of Jamaica's capacity to produce goods and services by increasing its capital formation to enable market penetration. This represents a change in focus from the preservation of preferential market access. The policy therefore promotes a more proactive approach to developing international trade laws in view of globalisation and liberalisation.
The trade policy has three major objectives:
- to create new and diversified exports for market penetration;
- to steadily reduce the share of imports relative to outputs; and
- to increase the flow of net positive returns from overseas assets that have
been generating significant remittances and other capital flows for Jamaica.
