Finance Minister to Meet with IMF Reps.

Minister of Finance and Planning, Dr. the Hon. Peter Phillips, has informed that he will be meeting with International Monetary Fund (IMF) representatives soon, to discuss the timelines for the next phase of negotiations.

“With respect to the negotiations with the IMF, I expect, in the next few weeks, to visit Washington to determine with the Fund, the timelines for the next phase of our negotiations in the light of this (2012/13) Budget (including the revenue package) and the other outstanding issues,” he said.

Closing the 2012/13 Budget Debate in the House of Representatives, on June 6, the Finance Minister said every effort is being made to conclude the negotiations post-haste.

“While one cannot predict with certainty the exact timing of the conclusion of the negotiations, I am working to bring them to a conclusion later this year,” Dr. Phillips said.

He noted that the IMF Board met on May 30, 2012, to review Jamaica’s 2011 Article IV consultation.

Article IV, among other things, provides an insight into the issues that will be of concern to the IMF’s Board when it is asked to consider approving a successor programme to the aborted Stand-By Arrangement (SBA). 

The Minister pointed out that the report on the Article IV consultation will be published both by the Fund and the Ministry, as soon as it is cleared for release.

“The draft report we have seen contains no surprises to anyone who followed my analysis of our current situation. The Board discussion and conclusions focused on some of the very areas which we have emphasised, that is, the need to: boost growth and competitiveness; and enhance fiscal sustainability,” he said.

Dr. Phillips noted that the Board broadly agreed with the assessment that a strong upfront fiscal adjustment is necessary to place the public debt on a clear downward path and to create buffers to protect against further negative shocks.

“In this regard, the IMF Board stressed the importance of tax reform, containing public wages and employment, improving public financial management and strengthening tax administration as necessary underpinnings of the fiscal consolidation efforts,” he said.

In the meantime, he said the Government will be making “unprecedented efforts to correct the slippages of the past year and is moving steadfastly to put in place a tax policy that aims at equity."

“We also intend to implement a system for parliamentary review that allows all of the people’s representatives to participate to a greater degree in monitoring the programme. Hopefully, this will enhance and entrench the objectives of the fiscal responsibility framework. A broad range of issues and details are involved in coming to an agreement with the IMF,” he said.

The Finance Minister said some of the areas of key importance are: wage restraint; pension reform; tax reform (including incentives and waivers reform and improvement in tax administration); and competitiveness reform (reducing impediments to doing business and reducing significantly, the cost of energy).        

By Chris Patterson, JIS Reporter