The Government and the International Monetary Fund (IMF) remain optimistic that the targets outlined in Jamaica’s current economic reform programme, being supported by the IMF, are achievable.
Finance and Planning Minister, Dr. the Hon. Peter Phillips, and Mission Head for the IMF Staff Team, which piloted the US$932.3 million four-year Extended Fund Facility (EFF) arrangement for Jamaica, Jan Kees Martijn, expressed their confidence, during a media briefing at the Ministry’s National Heroes Circle offices in Kingston, on May 21.
The briefing was held to provide details of the visit to Jamaica by the IMF Mission Team, whose members have been in the island for the past week. The trip has been described as a “routine visit”, to facilitate follow-up discussions between the IMF Team and the Government on the progress of the economic programme’s implementation.
In his remarks, Dr. Phillips, while noting that the programme is “strenuous” said that its implementation is achievable, based on developments arising in the private and public sectors.
“There is no doubt that the programme’s implementation will involve a lot of effort and sacrifice, collectively. However, I believe what has been demonstrated by all the stakeholders…public sector workers, bond holders and the various ministries, departments and agencies that have tailored their activities to meet the requirements of the budget, is that there is a high level of resolve and discipline, and that the programme is doable,” the Minister said.
He argued that the administration would not have agreed to undertake the programme if the targets were not being deemed achievable.
“I have no doubt that the Board of the (International Monetary) Fund would not have approved it, if they did not consider it doable,” the Minister added.
Mr. Martijn, who concurred with Dr. Phillips, said the programme’s implementation is critical, mainly because of the country’s debt burden, which “remains much too high (and) is a major handicap for the economy.”
“It keeps investors out of Jamaica, while they are critically needed to promote economic growth. So, to reduce the debt burden (requires) the fiscal discipline, which is a critical element. The measures to make this happen have already been identified (and) they have been tabled. We do believe that this is realistic, not easy, but realistic,” he said.
Meanwhile, Dr. Phillips said several mechanisms have been instituted in recognition of the need for “constant, continuous vigilance” of the programme’s implementation. These, he pointed out, include: establishment of the Economic Programme Oversight Committee, and an Office for Implementation and Co-ordination in the Ministry. Additionally, he said the Ministry holds weekly monitoring sessions with all key stakeholders.
Against the background of the country’s financial challenges, the Finance Minister stressed that the nation has a “collective responsibility” to ensure that the targets, which include attainment of a primary balance surplus target of 7.5 per cent of the national gross domestic product (GDP); and tax reform, are met.
He argued that the economic and social order needed to achieve this must be one that is economically vibrant, facilitates high levels of growth, steady increases in productivity, and is underpinned by an efficient public sector that facilitates investment.
On May 1, the IMF’s Executive Board approved the four-year Extended Fund Facility (EFF) arrangement, in the amount of US$932.3 million. Some US$207.2 million of this sum has already been disbursed to Jamaica, of which US$87.9 million represents budgetary support for the government’s comprehensive economic reform agenda.
Contact: Douglas McIntosh