MoU Signed to Extend EPOC’S Monitoring of ERP

The Government has signed a Memorandum of Understanding (MoU) with the Economic Programme Oversight Committee (EPOC) to extend domestic monitoring of Jamaica’s economic reform programme (ERP) beyond the end of the Precautionary Stand-By Arrangement with the International Monetary Fund (IMF).

The MoU was signed today (August 22) by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke; Chairman of EPOC, Keith Duncan; Governor of the Bank of Jamaica, Richard Byles, and other representatives of the Committee at the Ministry, National Heroes Circle.

In his remarks, Dr. Clarke said the Government is far advanced in enacting legislation to modernise the Bank of Jamaica, inclusive of institutionalising independence in the implementation of monetary policy.

“We are also working towards legislation that will give rise to a Fiscal Council that will strengthen Jamaica’s fiscal responsibility framework and be an independent arbiter of Jamaica’s fiscal rules,” he said, “Today, we commit to empowering EPOC to continue in a monitoring role until our Central Bank and Fiscal Council policy commitments are operationalised,” Dr. Clarke added.

He noted that in November, Jamaica is expected to successfully complete the Programme with the IMF. This, he said, follows the successful termination of the Extended Fund Facility with the IMF in November 2016.

“Together, this represents approximately 6 ½ years of successful programme implementation in the context of successive IMF programmes. Over this period, Jamaica’s debt has been reduced significantly, macroeconomic stability has become entrenched, economic growth has returned and there has been substantial growth in employment,” Dr. Clarke said.

He noted that this macroeconomic success over the 6 ½-year period is a Jamaican success story that is recognised around the world.

Dr. Clarke pointed out that this success is wholly attributable to the work and determination and sacrifice of the Jamaican people, adding that “we owe it to the Jamaican people to preserve and build on these gains, even as we work towards addressing the other important challenges.”

The Minister further noted that the MoU’s extension follows the Government’s agreement with the IMF to keep its office in Jamaica open for two years, following the end of the programme.

“These decisions are a clear demonstration of the Government’s commitment and intent to maintain a credible macroeconomic path, inclusive of a fiscal trajectory that is consistent with our fiscal responsibility framework long into the future, providing the foundation for economic opportunity for current and future generations,” Dr. Clarke said.

For his part, Mr. Duncan said it is important that EPOC continues to be in place until “we have the institutional strengthening…in relation to the Fiscal Council and the independence of the Central Bank.”

“We believe it is important that this monitoring mechanism continues to be in place, until we are comfortable that the institutional arrangements in place are adequate, suitable and have the sufficient capacity to be able to deliver. We are confident that this will happen,” he said.

He added that it is important that civil society has a voice in Jamaica’s economic programme.

“We are extremely focused around Jamaica achieving the fiscal rules, specifically our 60 per cent debt to gross domestic product (GDP) ratio, which Jamaica would look to get to in 2025/2026. We can only imagine the kind of resources that would be freed up for investment in our people,” Mr. Duncan said.