Final Proposal on IMF Loan Facility from Finance Ministry by Next Week

Prime Minister, the Hon Bruce Golding has indicated that by next week, Cabinet will have the final proposal from the Ministry of Finance for a stand-by loan facility with the International Monetary Fund (IMF).
Speaking yesterday (August 3), at a special press briefing at Jamaica House, Mr. Golding said the Government has been meeting with the Opposition, as well as various leaders from the private sector, and trade unions, as it seeks consensus, before signing off on a Letter of Intent for the IMF.
The Prime Minister pointed out that any arrangement with the Fund meant that adjustments would have to be made in the economy, in order to ensure that the country received maximum benefit.
Mr. Golding noted that one advantage of this type of arrangement was that the country could get the support it needed over that period of adjustment, “so that some of your vitals don’t fall out; for example, you can pay for the oil when it arrives at the dock, secondly it opens the doors of not only other multi lateral institutions, but commercial institutions when they are back in business.”
Meanwhile, President of the Co-operative Republic of Guyana, Bharrat Jagdeo, who also addressed the briefing, gave an insight into his country’s experience with the IMF.
He explained that in its 11-year relationship with the IMF, Guyana had received some US$2.5 billion in debt relief, and was bouncing back from having one of the worse debt to Gross Domestic Product (GDP) ratios in the world, at 750 per cent. “We were using 94 per cent of revenue to service that external debt. We now have a debt overhang of 47 per cent of GDP, down from 750 per cent, and we are using about 4.8 per cent of revenue to service that debt, one of the lowest in the region. Because we have removed that debt, we can now spend much more on health, education, and our capacity to address crises,” he said.
The President, who arrived in the island on July 31 for a five-day working visit, also offered his country’s support to Jamaica. “I have seen the evolution (of the IMF) and whatever we can do to share our experience, we are prepared to do that with your people, so that you can negotiate the best possible agreement for the future,” he said.
The Government is discussing a US$1.2 billion stand-by loan facility with the IMF, to enable the country to meet its external commitments. It is expected that at least US$400 million of the facility will be available up front.