Finance and Planning Minister, Dr. the Hon. Peter Phillips, says the process of economic and public finance reform, as outlined in Jamaica’s Medium Term Programme, would have to be pursued, even if a new International Monetary Fund (IMF) was not being negotiated.
The administration’s commitment in this guard, he notes, is to ensure the country’s survival in the face of the prevailing economic challenges.
“It is important to understand that it is not that the process of economic reform and the reform of public finances has been put on hold, pending some agreement with the (International Monetary) Fund. These are things that we have to do, in any event. It is Jamaica’s programme, not the Fund’s programme,” the Minister said.
He was speaking at the Kingston Rotary Club's weekly luncheon, held at the Jamaica Pegasus Hotel, New Kingston, on November 15.
“No one should have to force us to do what is necessary for our own survival and benefit,” he emphasised.
The Programme, Dr. Phillips pointed out, will entail: commitment to reducing the ratio of central government wages to the Gross Domestic Product (GDP), to no more than nine per cent by 2015/16; a timetable for public sector pensions reform; and structural benchmarks for tax reform, including improvements to tax administration and the legislative framework governing the tax policy.
“The programme will also encompass changes in policies and procedures that improve the environment for doing business and enhance the potential for faster economic growth, by improving the competitiveness of Jamaican businesses. There are also commitments for the preservation of adequate levels of social spending and improvements in the delivery and effectiveness of social programmes,” he further outlined.
Dr. Phillips reiterated that there are “no areas of fundamental disagreement” between the administration and the IMF on these issues. However, there are some “important technical issues” which remain to be finalized, he added.
“The primary issue centres around the shared view, between the Fund and ourselves, that given the generally precarious conditions in the world economy, and the risk that this negative outlook entails for indebted and vulnerable economies, such as ours, there is a need for us to construct buffers, agreed to beforehand, in the event that the world economic environment turns sharply negative during the life of the programme,” the Minister said.
“This has involved a lot of technical work and exchanges of data and information which is being undertaken and which we expect to bring to conclusion very, very shortly,” Dr. Phillips noted.