Government Awaits Discussions among IMF, World Bank and IDB

he Government is awaiting the outcome of discussions involving the International Monetary Fund (IMF), World Bank and Inter-American Development Bank (IDB), which will determine funding support that will be provided to complement an IMF’s extended fund facility for Jamaica.

This is deemed vital to the administration securing the IMF’s support for the country’s economic reform programme over the next four years.

Speaking at the media briefing at the Office of the Prime Minister (OPM) on Wednesday, March 27, Finance and Planning Minister, Dr. the Hon. Peter Phillips, said the matter was discussed extensively during the Cabinet retreat earlier this week, and pointed out that the discussions among the representatives have been in progress since Monday.

He said based on the information he received, the talks had not concluded up to early Wednesday afternoon.

Against this background, the Minister said the administration has been “urging each institution to accelerate their internal processes that can lead to a decision”.

“We continue to press for an early consideration of the (economic reform) programme by the International Monetary Fund Board, given the obvious negative effect of any delay and given the fact that the Government of Jamaica has fulfilled all the (prior) obligations required of it,” he said.

The obligations include: settling a wage restraint agreement with unions representing over 80 per cent of the public sector workforce for the 2013 to 2015 period; introduction and approval, through Cabinet, of a new policy governing discretionary waivers; passage of legislation governing the management of public debt, which was effected in November 2012; and execution of a national debt exchange programme to provide at least 8.5 per cent of the gross domestic product (GDP), which was successfully completed on March 22.

These proposals formed the basis of a staff level agreement reached between the government and IMF representatives in Kingston on February 15, which, subject to their implementation, would have facilitated the economic reform programme’s submission to the IMF’s Executive Board by the end of March.

“This agreement signified that, subject to the completion of (these) actions, the policies and programmes proposed by the government were deemed to be consistent with the key objectives of growth, fiscal consolidation and debt reduction that the (administration) was setting out to achieve, which were endorsed by the Fund’s staff,” he explained.

The Minister also advised that all the issues relating to Jamaica’s Letter of Intent have been agreed with the IMF. These, he informed, are contained in the Memorandum of Economic and Financial Policies that the government intends to pursue over the four- year period.

In light of the current discussions between the IMF, IDB and World Bank, Dr. Phillips said conclusion of the extended funding for Jamaica is unlikely to occur by the end of March.

In this regard, the Finance Minister said the administration is urging the IMF Board to give consideration to concluding Jamaica’s application as quickly as possible, “given the obvious negative effect of any delay”.

“Also, we need an early date in order to avoid any extensive modification of the documentation already submitted to the IMF,” he added.

Dr. Phillips advised that Jamaica’s interest, in this regard, is being monitored by the country’s Ambassador to the United States, His Excellency Professor Stephen Vasciannie, adding that “all diplomatic channels at our disposal are being called into service, to ensure a speedy resolution of this matter.”

“At the same time…we will continue to implement the programme as we agreed. The budget is consistent with the programme and we will continue with all elements of the programme because, as I have said many times before, it is incumbent on Jamaica to correct the imbalances in our economic infrastructure. We will continue to maintain the quantitative targets and structural benchmarks set out in the programme,” Dr. Phillips assured.

By Douglas McIntosh, JIS Reporter