Overview
Privatisation is defined as the transfer of assets or shares held by a public body (that is, a “statutory body or authority or any government company”) or ministry or department of the Government to the private sector by way of sale, lease, concession, management contract or any other modality that transfers significant management control, risk or both, to a private firm.
In the early 1980s, the process of privatising the Government of Jamaica’s (GoJ’s) assets started. At that time, the GoJ’s main objective was to ensure that public funds were not used to finance the operations of inefficient enterprises and to lessen the demand on the GoJ’s resources. Since then there have been two policy revisions (1991 and 2012), that incorporated expanded objectives and key provisions based on the privatisation experience to date, increased fiscal constraints in a challenging economic environment, a changing regulatory framework, and changes in the relationship between the key stakeholders, among other issues.
The current Privatisation Policy aims at providing a more streamlined framework that incorporates regulatory and strategic considerations and is guided by the principle that privatisation transactions should allow the state to focus on its core business by providing space for other productive endeavours to emerge, creating an environment that welcomes increased private sector participation and investment in economic development activities.
History
State divestment began in Jamaica in the early 1980s when the GoJ decide to pursue the divestment of equity and control in commercial entities at prices based on commercial criteria and the national interest. A divestment policy, at that time, was proposed to ensure that public funds were not used to finance the operations of inefficient enterprises and to reduce the burden on the budget of the Government of Jamaica.
In 1991 the GoJ reviewed its existing privatisation objectives and policies and approved a new framework for privatisation transactions, which was found in Ministry Paper No. 34 of 1991. The policy outlined the general rationale for privatisation and addressed issues such as the role of the Privatisation Committee and the National Investment Bank of Jamaica as well as the modalities for privatisation transactions. The GoJ’s privatisation activities slowed considerably in the years following the privatisation of most of the larger strategic assets such as National Commercial Bank, Caribbean Cement Co., Jamaica Public Service Co. Ltd., and Sangster International Airport.
Two decades later, while some of the key provisions of the policy remain relevant, a policy review was deemed necessary given the privatisation experience to date, increased fiscal constraints in a challenging economic environment, a changing regulatory framework, and changes in the relationship between the key stakeholders, among other issues.
The revised Privatisation Policy aims at providing a more streamlined framework that incorporates regulatory and strategic considerations. It is guided by the principle that privatisation transactions should allow the state to focus on its core business by providing space for other productive endeavours to emerge, creating an environment that welcomes increased private sector participation and investment in economic development activities, particularly infrastructure projects and services.
