Jamaica and the International Monetary Fund (IMF) have reached a staff-level agreement.
This was revealed by Head of the IMF Mission to Jamaica, Jan Kees Martijn, during a press conference, held at the National Heroes Circle offices of the Finance and Planning Ministry, in Kingston, on Friday, February 15.
The IMF is to present Jamaica’s economic programme to its Executive Board for consideration by March.
“The Mission has reached a staff-level agreement with the Jamaican authorities on the key elements of a policy programme that can be supported by a four-year arrangement under the IMF’s Extended Fund Facility (EFF),” he said.
A staff-level agreement means that the staff members from the IMF and the negotiating team in Jamaica have been able to reach a deal on Jamaica’s economic programme, which will be presented to the IMF Executive Board.
Mr. Martijn explained that the Government’s economic reform programme will be reviewed by the IMF Management and then passed to the Executive Board for further consideration. The Board will review the timely implementation of prior actions to be taken by the Jamaican government and whether the Government has secured the necessary financing assurances.
“Very important in this context, is that (Jamaica’s) authorities have announced a debt exchange that, along with fiscal adjustment and structural reform measures, will help reduce Jamaica’s financing needs and contribute to debt sustainability,” he noted.
“In addition to continued support from international financial institutions and other creditors, the success of the authority’s programme will depend critically on a high rate of participation of private creditors in the debt exchange. All these elements will help secure financing assurances for a Fund-supported programme,” he added.
Minister of Finance and Planning, Dr. the Hon. Peter Phillips, said in order to submit the programme to the IMF Executive Board by March, both the National Debt Exchange offer and the public sector wage negotiations must be successfully completed, with the requisite level of participation by all.
“These actions will together, add more certainty to the Government’s ability to plan its expenditure over the medium term and to undertake the programme of economic reform with support from not only the IMF but from the other multilateral partners and bilateral partners who have traditionally offered support to the Government of Jamaica,” he said.
The Minister pointed out that the growth strategy under its economic programme will centre on attracting significant investment in areas such as agriculture, tourism, shipping, port logistics, business process outsourcing, energy and manufacturing, among other things.
“This growth strategy is driven by fiscal and monetary reforms aimed at creating a stable, predictable and resilient macro-economic environment, and is focused on reducing the public debt ratios to sustainable levels. The strategy is also underpinned by critical structural reforms, aimed at strengthening Jamaica’s external competitiveness and productivity, and it also aims at achieving strategic private and public investments, and social stability,” he said.
Dr. Phillips further informed that the programme includes specific minimum targets for the expenditure on social protection measures and public capital expenditure, which is targeted at three per cent of Gross Domestic Product (GDP) per annum.
“In the midst of the revenue raising measures, there is a fundamental commitment to the protection of the poor and the most vulnerable and marginalised sections of the population and also a commitment to ensuring that the critical public infrastructure to support growth is put in place,” he said.
The Minister assured that the Government is deeply committed to the objectives and measures underlying the programme, and intends to pursue them with “focus and vigour”.
“It is our programme for which we seek support from the Fund and from the multilateral institutions and our bilateral partners. We accept full ownership for what we need to do. We need to do this for our own survival as a country,” he emphasized.
“We welcome the conclusion of this round of negotiations and look forward to a similarly favourable consideration by the Board of the Fund,” he concluded.
The IMF team, which has been in the island since Tuesday, February 5, leaves the country, on Friday, February 15.