- International Monetary Fund (IMF) Resident Representative, Dr. Constant Lonkeng Ngouana, is lauding the Government for initiating measures to preserve and bolster the economic gains Jamaica has recorded over the last six years.
- This, he notes, under the country’s Economic Reform Programme (ERP).
- These safeguards, which Dr. Lonkeng Ngouana contends are imperative in facilitating Jamaica’s exit from the IMF’s financial support in November, include the Bill currently before Parliament, seeking to make the Bank of Jamaica (BOJ) independent and refocusing its mandate on price stability; and the proposed Fiscal Council that will serve as the post-IMF era guardian of the country’s fiscal responsibility law, which stipulates that the debt to gross domestic product (GDP) ratio should be no higher than 60 per cent by the 2025/26 fiscal year.
International Monetary Fund (IMF) Resident Representative, Dr. Constant Lonkeng Ngouana, is lauding the Government for initiating measures to preserve and bolster the economic gains Jamaica has recorded over the last six years.
This, he notes, under the country’s Economic Reform Programme (ERP).
These safeguards, which Dr. Lonkeng Ngouana contends are imperative in facilitating Jamaica’s exit from the IMF’s financial support in November, include the Bill currently before Parliament, seeking to make the Bank of Jamaica (BOJ) independent and refocusing its mandate on price stability; and the proposed Fiscal Council that will serve as the post-IMF era guardian of the country’s fiscal responsibility law, which stipulates that the debt to gross domestic product (GDP) ratio should be no higher than 60 per cent by the 2025/26 fiscal year.
“We have also seen the Ministry of Finance and the Public Service thinking and initiating natural disaster risk financing. Jamaica has, indeed, made so much gains over the past six years that it would be unfortunate to see those wiped out by a hurricane, God forbid. The Government has been very proactive, arguably leading the way among Caribbean countries in thinking about disaster risk financing,” he tells JIS News.
The IMF Representative adds that “we do believe the main building blocks are being put in place to ensure that the exit from the IMF is smooth; Jamaica is absolutely ready. It has been a gradual process, characterised by six years of sound policymaking with broad-based social consensus”.
Meanwhile, Dr. Lonkeng Ngouana believes that Jamaica’s performance under the ERP has “exceeded expectations”.
He points to notable achievements by Jamaica under the IMF’s Extended Fund Facility (EFF) and Precautionary Stand-By Arrangement (PSBA) programmes over the period, including: a “huge” reduction in public debt from 147 per cent of GDP at the end of March 2013 to 95 per cent at the end of March 2019; significant foreign reserves, which have risen from less than US$1 billion to more than US$3 billion; declining inflation, which has fallen from double to low single digits; and unemployment which fell from 16.3 per cent in April 2013 to 7.8 per cent this year.
While acknowledging that growth is “not where we all want it to be”, Dr. Lonkeng Ngouana is, nonetheless, optimistic that Jamaica can, over time, achieve higher levels of sustainable inclusive growth.
“Yes, it’s low. But to put the numbers in perspective, the Jamaican economy grew by 1.9 per cent in 2018/19, which is more than double the average growth rate of the past two decades. So Jamaica is getting there,” he argues.
Dr. Lonkeng Ngouana, however, emphasises that there are remaining structural growth impediments, specifically relating to weak resilience in agriculture, private sector access to credit, and crime, noting that steps to addressing these are underway.
In the case of agriculture which, he notes, “is still very much at the mercy of Mother Nature”, Dr. Lonkeng Ngouana says the Government has “made a lot of effort” to increase budgetary allocations for irrigation to help address the challenges faced by a significant number of farmers in accessing water, and rehabilitate farm roads.
He also highlights several other imperatives cited by farmers, which include ready access to laboratories for crop testing and analysis in the event of the onset of diseases, to help explore solutions.
Regarding access to credit, Dr. Lonkeng Ngouana says the Government’s withdrawal from borrowing coupled with debt repayment are leading to a greater availability of funds for loans, particularly to small and medium enterprises (SMEs).
Additionally, he says the IMF welcomes the decision by local banks to engage SMEs on how best they can facilitate the flow of financing to the productive sectors, while SMEs adopt more transparent business practices.
Dr. Lonkeng Ngouana also acknowledges increased budgetary allocations towards citizen security.
“We believe that if those structural impediments were to be resolved, or partially resolved, growth could be much higher in Jamaica,” he adds.
Meanwhile, Dr. Lonkeng Ngouana believes Jamaica has done “extremely well” based on its economic performance over the last six years.
“If we were to compare Jamaica’s performance with other countries, I think it’s fair to say that Jamaica has set a new standard for policymaking, not only for the region, but, really, for the rest of the world,” he contends.
The IMF Representative notes that the Economic Reform Programme “is one that was owned by the Jamaican people, a Programme by Jamaicans and for Jamaicans”.
“We have seen a country where the ownership of the economic programme was far-reaching; we have seen a country where the broad-based social consensus has allowed two successive Administrations to implement sound polices; we have seen a country with continuity in the reforms, and the Jamaican people being engaged in the process to be part of that transformation,” Dr. Lonkeng Ngouana adds.
He notes doubts initially resonating, questioning Jamaica’s ability to emerge from its economic quagmire.
“But, fast-forward to today, everybody is in agreement that this has been a tremendous turnaround. We get calls all the time asking ‘how did the Jamaican people do it? … making such an economic transformation in such a short period of time’. So, yes, Jamaica did it,” he declares, while pointing out that Jamaica’s experience is one which many countries can learn from.
Against this background, Dr. Lonkeng Ngouana says he is “very optimistic” about Jamaica’s future.
“A lot is happening. It’s a huge transformation that is happening and a lot of progress has been achieved… but Jamaica is not out of the woods yet. I put my trust on the Jamaican people to continue on the path that they started on. I believe sustaining the course will help Jamaica deliver a brighter future for its people. The world is watching, and I put my trust in the Jamaican people in delivering on that promise,” he adds.