JIS News

Jamaica is entitled to apply for just under US$1 billion from the International Monetary Fund (IMF) for balance of payments needs, but the Government is not anxious to make the approach, Prime Minister the Hon. Bruce Golding has said.
Mr. Golding insists that the Government would only contemplate resuming a borrowing relationship with the Fund, if the country faces significant deterioration in its balance of payment position.
A team from the IMF team is due in the island next week, but Government spokesmen have described these developments as exploratory, in the event of a need to approach the Fund.
The country’s Net International Reserves (NIR) currently stands at about US$1.6 billion, or about 12 weeks of imports, which is considered a comfortable level. However, this could change due to the effect of the global economic crisis on bauxite/alumina exports, tourism and remittances.
Speaking to journalists at Wednesday’s (May 13) Post Cabinet press briefing at Jamaica House, Mr. Golding admitted that the Government was not anxious to approach the IMF.
“They have some new programmes, and different programmes carry different conditionalities. I am approaching it reluctantly, (but) if the circumstances require that we do it, then we would have to do it,” he explained.
Mr. Golding pointed out that bauxite, which accounted for 60 percent of the country’s earnings, has seen a two-thirds decline in earnings, and remittances have experienced fall offs varying between 17 and 25 percent. Therefore, the administration needs to put in place measures to safeguard the balance of payments.
He said while the NIR has held up under pressure, and has actually increased marginally, looking further down the road, there is uncertainty about what will happen.
“Therefore, we don’t want to be in a position, where we find that our reserves are being drawn down to the point where a confidence crisis would emerge. We want to be able to say, “we have a facility in place; we have already negotiated, laid out numbers, examined the conditionalities, (and) are prepared to accept those conditionalities,” he said.
Mr. Golding, however, assured that should the need arise, the country will be informed accordingly.
“We are trying to put everything in place, in terms of understanding what is available. Cabinet will have to consider and decide, whether we want to enter into any arrangement. If we take such a decision, we are not going to allow you to hear about it. We are going to come straight to you and tell you. But, we are not at that point, yet,” he said.
Speaking in the Budget Debate at Gordon House on May 5, Mr. Golding assured Parliament that the Government was prepared to engage the Opposition in looking at the options, should the need arise.

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