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Prime Minister, the Hon. Bruce Golding, has said that talks with the International Monetary Fund (IMF) team that is now in the island have gone well and he is encouraged by the approach that the Fund is taking in ironing out a stand-by loan facility with Jamaica.
Mr. Golding, who met yesterday (July 28) with the team, maintains that the IMF is far less strident in its approach than in previous years.
“The kind of programme that the IMF works out with a country is no longer something that is designed in Washington and approached to countries irrespective of the particular circumstances of that country,” he told journalists at today’s (July 29) post-Cabinet press briefing at Jamaica House.
“What they do now is look at your own situation and they work with you, so what you will find is that what the IMF works out with Jamaica may be completely different from what it works out with Latvia or Mozambique,” he noted.
In making the distinction between the stand-by loan facility and the other loan arrangements available through the IMF, Mr. Golding explained that, “we don’t qualify for the flexible credit line, which they have introduced. That only applies to countries that have satisfactory macroeconomic performance for a number of years, but have been affected by the (economic) crisis”.
He noted further that Jamaica does not qualify for the poverty reduction facility “because that is restricted to those countries whose per capita income is less than US$450 per year”.
There is also an extended fund facility, but Mr. Golding said that the Government does not consider this scheme to be an appropriate approach for the country at this time.
“Jamaica has used that facility in the past. It is used for countries that are in need of significant structural reform. We have been through all of that. Throughout the early 80s and the 90s, we went through all of those structural reforms, so we are not a country in need of structural reform,” he told journalists.
Mr. Golding noted also that the extended fund facility is normally a three-year programme, but the country does not need this type of loan facility, for that length of time.
“The standby arrangement goes from 12 to 24 months…we are hoping to be able to get in and get out,” he said.
“If we can get the support that we need to take us through this difficult period (this year) when we have an over $1 billion shortfall in our external account, and take us through a good portion of the following fiscal year, by which time, we hope that some of our sources of foreign exchange flows will start to recover, remittances for example, possibly bauxite, we are hoping that by that time, we can begin the process of exiting,” Mr. Golding stated.