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Senator Wehby Implements Central Treasury Management System
By: Andre’ Burnett
BUSINESS LOUNGE
promises better fiscal management
Besides being island countries with colourful and distinctive cultures and a healthy appreciation for Arthur Guinness’s brew, Jamaica and Ireland share a number of social and economic similarities derived from being geographically close to a mainland superpower, dealing with mass emigration of their natives and gaining independence from the United Kingdom in the same century. The most recent similarity between the two island-states comes with the announcement of the planned implementation of a Central Treasury Management System (CTMS) in Jamaica similar to the National Treasury Management Agency (NTMA) implemented in Ireland in 1990. According to a recent press release issued by the Ministry of Finance, Senator, the Honourable Don Wehby has announced that Cabinet on its May 18th sitting has given the go-ahead for the implementation of the fund system.
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such as Social Insurance Fund and dormant funds. The agency is also the central treasury service for all the health, education and local government authorities and is also the country’s agent for the purchasing of carbon credits. The NTMA’s most recent addition is a direct response to the ongoing financial crisis with the implementation of a “bad bank”, The National Asset Management Agency (NAMA) which will aim to take bad land and property development loans off the books of main Irish Banks and house them in a new agency. The creation of a single body in full control of the overall management of public funds is a direct response to years of complaints about the inefficiencies created by the present system of managing public funds. At present, individual Public bodies mange their own funds and are responsible for fulfilling their financial responsibilities however necessary. There are larger state bodies which have to borrow funds regularly to cope with operating expenses while other entities associated with the state manage large sums of funds at any given time. The pooling of all of the states resources under one agency or management system presents alternatives to borrowing at high interest rates to entities that are less liquid. The Minister stated in the release that “The timely implementation of the CTMS constitutes an integral part of one of the Government’s comprehensive 6-point reform programme to increase fiscal responsibility and reduce debt.”
Senator Don Wehby Minister without Portfolio in the Ministry of Finance and the Public Service
The Ministry plans that upon implementation, the CTMS will be the single agency managing the overall usage of public funds which includes among other things, cash management, management of Government’s bank accounts, financial planning and forecasting of cash flows and public debt management. In Ireland the NTMA functions as an autonomous agency whose original purpose was to “borrow moneys for the Exchequer and manage the national debt under the superintendence of the Minister of Finance and to perform certain related functions and to provide for connected matters”. The agency’s remit has extended since with its management of Ireland’s National Pensions Reserve fund and other government funds
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With this passing of legislation, it means that several responsibilities now shared between the Accountant General Department and the Ministry of Finance and Public service would now be controlled by a single agency. The CTMS will therefore be an upgrade of the AGD which has been revamped with the proper expertise and technological expertise to effectively shuttle out fair island into the realm of financial security.
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Harness the Power of Habit “I am your constant companion. I am your greatest helper and your heaviest burden. I will push you onward or drag you down to failure… Who am I? I am habit.” Author anonymous Being a successful entrepreneur is not really as difficult as many people might think. Business achievement, like any other accomplishment in life, is really about learning and applying the right principles that will bring you the results that you desire. I have always wondered what factors distinguished the entrepreneurs who were able to attain prosperous enterprises from those who merely struggled along, eking out a basic existence. After reading dozens of inspirational stories about savvy business owners, I have realised that they all had one thing in common. Successful entrepreneurs not only learned and applied the right principles, but they practiced them consistently until they became habits. According to J. Paul Getty, an oil industry billionaire who in 1957 was named the richest living American by Fortune magazine, “The individual who wants to reach the top in business must appreciate the might of the force of habit.” Habits can be two-edged swords There are two types of habits – those that can help your business and those that can harm it. Getty declared that a business person must “be quick to break those habits that can break him, and hasten to adopt those practices that will become the habits that can help him achieve success.”
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Good entrepreneurial habits include keeping up-to-date accounting records, marketing consistently existing and potential customers, speaking to employees with respect, and using technology to keep up with industry trends. Examples of damaging habits are being late, getting distracted by technology such as instant
messaging, not keeping your promises, and micromanaging instead of concentrating on the big picture. Cultivating or kicking a habit What’s the best way to create good habits that will take your business to the next level? The first thing you have to do is focus on why the particular activity is essential to your operations. Think: ‘If I immediately enter my receipts in the Quickbooks accounting package instead of stuffing them in my drawer, I will quickly know if I am making profit.’ The next step to cultivating habits is to schedule the activity in your diary. If you want to surf the internet to find new products or monitor your competitors, fix a time and date to do this action every week. Resist the urge to skip the task, ‘just this once,’ as that will quickly derail it from becoming a habit. Unfortunately, it takes a lot of time to rewire your brain to banish bad business behaviours. In fact the only way to really kick a negative practice is to replace it with a new, positive habit!
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Cherryl is a financial consultant and coach, and founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallysmartonline. com. Email Cherryl at advice@financiallysmartonline. com. Please add this address to your email address book in order to ensure you receive a response.
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AN ENTREPRENEUR’S LIFE
by: Cherryl Hanson Simpson
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10 Smart Steps to: learn about bonds Provided by: Financially S.M.A.R.T. Services
Question:
What legitimate investment options are out there for people to invest their money and receive interest income at higher rates?
Raise Your Financial IQ! -
While persons may have heard about money market investments, many people have never thought about investing in bonds. Here are ten key things to learn about bonds:
8. Can I sell my bond before it matures? After a
bond is originally issued, investors can buy and sell these instruments on the secondary market through securities dealers.
1. What is a bond? A bond is a medium- to long-
term debt contract which lasts for more than one year. It’s basically an IOU outlining when investors will be repaid their principal amounts, what interest rate they will receive, and how often interest payments will be made.
2.
What type of places issue bonds? Entities such as the government and large corporations usually borrow money from individuals and companies through brokers and primary dealers.
3. What kinds of bonds can I buy in Jamaica? The 9. Can I profit from selling my bond? Bonds have Ministry of Finance periodically issues new bonds in Jamaica. Debentures are the most common types of Jamaican dollar bonds bought by individuals, as they offer fixed interest rates with usually quarterly interest payments.
4. Can bonds be bought with foreign currency? Eurobonds or global bonds are issued by the government outside of Jamaica in a foreign currency such as US or Euro dollars. Many local brokerages buy and sell these global bonds.
5. Can I buy bonds from other countries? You can purchase international bonds through local or international brokerages and securities dealers.
6. How do I know if these overseas entities will pay
back my money? You must assess the ability of the issuer to pay back the debt before you invest in bonds. Rating agencies like Standard & Poors and Moody’s publish credit rating reports that measure the risk of the issuer defaulting on the debt.
7. How can I earn more by investing in bonds? Be-
cause bonds are longer term debts, they carry a little more risk than money market investments which only last for a maximum of one year. Therefore bonds typically offer investors higher interest rates than money
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prices that can fluctuate according to supply and demand, economic conditions and interest rate changes. Some investors buy bonds with the intention of selling them back at higher prices to make gains on their original investment.
10. What are the risks of investing in bonds? Issu-
ers may not be able to pay back interest or principal; investors may not be able to sell bonds as quickly as they want; or investors could lose on their principal amounts if they have to sell when the bond prices go down.
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Financially S.M.A.R.T. Services is Jamaica’s number one source for practical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www.financiallysmartonline.com. Email advice@financiallysmartonline.com with comments or questions.
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MONEY $MART...
Answer:
market instruments.
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