KINGSTON — The Government will be seeking a 24-month extension of the present 27-month Stand-by Arrangement (SBA) with the International Monetary Fund (IMF), which expires in May, 2012.
This was announced by Finance and Public Service Minister, Hon. Audley Shaw, when he opened the 2011/12 Budget Debate in the House of Representatives, on April 28. The Minister added that Cabinet has authorised the move.
“We believe that it is in the best interest of the country to continue its relationship with the IMF. A continuation of the programme will send a positive signal that will maintain stability; reinforce confidence; and provide the important factor of certainty to stakeholders,” he said.
Mr. Shaw explained that all the International Development Partners (IDPs) – the European Union (EU), the Inter-American Development Bank (IDB), the World Bank, and the Caribbean Development Bank (CDB) – use the quarterly reviews as the primary and first conditionality to be met, prior to the disbursement of loans and grants.
In addition, he said there is need to foster both confidence and certainty in the capital market – both domestic and foreign – to facilitate incremental reduction of the interest costs on debt.
The Minister argued that an extension of the SBA was a preferred alternative to an Extended Fund Facility (EFF), which usually last for years, with a possibility of extending to a fourth year. Mr. Shaw pointed out that this Facility is usually more appropriate for countries faced with balance of payments challenges that extend into the long term.
“It is strongly believed that, with the right choices now, Jamaica can emerge, within the medium term, from the current economic depression and structural rigidities that exist without subjecting the country to the adverse perceptions that could be generated as a result of seeking an EFF,” Mr. Shaw asserted.
Mr. Shaw’s presentation was made under the theme: ‘From Stabilisation to Growth’.
By ALPHEA SAUNDERS, JIS Reporter