Country Not in Crisis – Shaw

Minister of Finance and the Public Service, Audley Shaw, has said that while the Jamaican economy is being severely challenged by the global financial turmoil, the country is not in crisis, nor is in panic mode.
The Minister, who was addressing a joint press conference with the Managing Director of the IMF, Dominique Straus-Khan today (Dec.10), at the Hilton Kingston hotel, further declared that the Government is not on the verge of accessing loan support from the International Monetary Fund (IMF).
He said the latest data revealed private foreign exchange accounts of some US$2.3 billion; Net International Reserve (NIR) of more than US$1.7 billion, which is similar to the corresponding period last year; remittances are up seven per cent over the corresponding period last year; and tourism earnings have increased by five per cent.
“Now, more than ever, the country needs a social partnership to work our way out of the situation. The best and most important tool in our arsenal is confidence, and so long as all of us, including the private sector, face the challenges with confidence in our collective ability to weather the storm, to position our economy for the future, then while there are challenges, we are not in crisis,” the Minister stated.
Mr. Straus-Khan, in supporting Minister Shaw’s outlook, stated that although Jamaica is hamstrung by huge fiscal and current account deficits and a very high debt burden, which provides little room for a stimulus package, the financial sector is in good shape, the regulatory regime is effective, and the economy is not in crisis.
While praising Jamaica’s efforts to correct the monetary and fiscal imbalances in the face of the pre-existing and emerging challenges, the IMF Executive Director stated that, “the reforms being undertaken by the Government are not easy, but with or without the international financial crisis, the reforms are necessary and will be good for the economy. These reforms are not conditionalities, but are self-imposed, and the Government of Jamaica must be commended for this positive approach.”
Mr. Straus-Khan emphasized that the Fund stands ready to support the efforts of the Government, especially in the context of the country’s renewed focus on accessing policy-based loans from multilaterals. He also observed that some 80 per cent of the IMF’ resources are dedicated to technical assistance, and that Jamaica has been a worthy beneficiary.
For his part, Minister Shaw reflected on the continuing good relations between Jamaica and the Fund. He also noted that the guidance and scrutiny of the Fund is a useful policy support.
“What is not very well known is the fact that in order to access these positive loan agreements with the multilaterals, the IMF’s endorsement is significant. In addition to the annual Article 1V Consultations of the recent past, we now have in place, a twice yearly Intensified Surveillance Programme,” he noted.
Mr. Straus-Khan’s visit is the first official one by an IMF Managing Director to Jamaica. While in the island, he will hold meetings with senior government officials headed by the Prime Minister, Minister of Finance and the Public Service, the Financial Secretary, Governor of the Bank of Jamaica and the Director General of the Planning Institute of Jamaica.
Mr. Straus-Khan and his delegation leave the island later today for Costa Rica.