IMF Accepts Invitation from the Government

The International Monetary Fund (IMF) has accepted an invitation from the Government of Jamaica to help in the design of an economic programme to reduce the public debt burden.

This arrangement was arrived at, after a series of discussions between Finance and Planning Minister, Dr. Omar Davies and officials in Washington, including a letter to IMF Head, Horst Koehler.Prime Minister P. J. Patterson and Dr. Davies spoke about the matter at yesterday’s (March 1) post Cabinet press briefing at Jamaica House.

In the letter, which was approved by Cabinet, Dr. Davies had expressed Jamaica’s interest in exploring the possibility of a monitoring mechanism for Jamaica in the absence of the discontinued Staff Monitored Programme (SMP).

The letter made mention of the comprehensive plan that has been put forward by the Government for the next fiscal year and the medium term.

“We envision that the Fund will continue its regular Article Four consultations but that this would be enhanced with quarterly monitoring of the announced financial targets,” the Prime Minister explained.

He added that the arrangement would serve to increase the avenue for dialogue between the Fund and Jamaica and support efforts at greater policy discipline, while signalling to creditors and the rest of the international community, the country’s continued commitment to sound macro economic policies.

Accepting the Government’s invitation, the IMF has expressed its willingness to assist in developing a format that would meet the needs of Jamaica.

The Fund has suggested that the Government use the opportunity for the Article Four discussions that were scheduled for May, to reach a final understanding of the details of the monitoring mechanism. By that time, the Budget for 2004/05 would be in place and that would facilitate the specifications of the economic policy framework.

The Prime Minister made it clear that the programme was not a borrowing one, nor was it drawn up by the IMF. “It is a programme of the Government of Jamaica,” he emphasized.

Citing the importance of the initiative, Mr. Patterson said it would make it easier for Jamaica to access international funding and raise money on the international capital market at attractive rates.