Country Needs Seal of Approval from the IMF – Bullock

Lecturer in the Department of Economics at the University of the West Indies, Mona Campus, Collin Bullock, says it is important that the country secures a “seal of approval” from the International Monetary Fund (IMF), to ensure it continues to receive financial support from the international community.

"The Finance and Planning Minister (Dr. the Hon. Peter Phillips) said recently that we really don’t need a lot of money from the IMF itself, but what is important is having an IMF seal of approval for your policies, so that funds can flow from the World Bank, the Inter-American Development Bank, the Caribbean Development Bank and grant funding from the European Union,” Mr. Bullock said in an interview with JIS News.

Lamenting that the country is heavily indebted with a debt to Gross Domestic Product (GDP) ratio of close to 140 per cent, Mr. Bullock emphasised that securing an IMF agreement is key to ensuring greater financial soundness.

“In terms of the stark reality, we need an IMF agreement or we will be faced with a practical default…some people call it a restructuring of our international debt. So, we do need the external financial support as a basis within which we can make the adjustments to make ourselves more fiscally sustainable over time,” he said.

“Essentially, we have debts which are due and which will be due over the next  few years and local debt is bad enough, but in terms of external debt, unless we have external resources flowing into the economy, we will be in a situation where we will not be able to pay our debt,” the Lecturer added.

Mr. Bullock, who is also a member of the Government’s Council of Economic Advisors, said the country will need to put certain structures and policies in place, if it is to secure another International Monetary Fund (IMF) agreement.

"The past (IMF) programme…we made commitments which were never fulfilled and we are in a situation now where the international community wants to see some movement. They want to see us on a path, actually putting things in place, starting to implement policies, starting to collect revenue, starting to manage the expenditure in a way which is irrevocable and irreversible, before they will seriously commit to a programme with us,” he said.

Mr. Bullock said this will be the challenge for Jamaica over the next few months, to demonstrate its commitment to meeting the requirements of the IMF, by focusing on areas such as the tax reform and pension reform policies, and central treasury management.

"All of these things we have to start putting in place as a sign of our commitment to fundamental change,” he emphasised.

Speaking in the House of Representatives recently, the Finance Minister informed that the negotiating team from the IMF will be in the island in September, and that the Finance Ministry is working on a presentation to be made to the IMF Board before the end of December.