- As the debate continues on the Government’s agreement with the International Monetary Fund (IMF) and the social impact of the structural adjustments being made to improve the economy, Minister of Finance and Planning Hon. Dr. Peter Phillips insists that these discussions must be put in context.
- Dr. Phillips pointed out that the journey started two and a half years ago with the cessation of the disbursements under the then IMF standby agreement.
As the debate continues on the Government’s agreement with the International Monetary Fund (IMF) and the social impact of the structural adjustments being made to improve the economy, Minister of Finance and Planning Hon. Dr. Peter Phillips insists that these discussions must be put in context.
“First… we need to bear in mind where we are coming from. It is often too easy to forget, once you have left the edge of the precipice, what it was like at that edge,” Minister Phillips remarked, while addressing members of the Montego Bay business community on Wednesday, October 22.
The occasion was a luncheon hosted by the Montego Bay Chamber of Commerce and Industry in honour of the Minister and Deputy Managing Director of the IMF, Dr Min Zhu, at the Half Moon Conference Centre in Rose Hall, Montego Bay.
Dr. Phillips pointed out that the journey started two and a half years ago with the cessation of the disbursements under the then IMF standby agreement.
“We were in the situation where we were cut off from international and domestic capital markets. Our debts had increased to an unsustainable level. Debt servicing was consuming close to 60 per cent of (the fiscal) budget…our reserves were in free fall and growth was moving in reverse,” he recounted.
The Finance Minister noted the sacrifices made by public sector employees who accepted a wage freeze; pensioners who agreed to reduced returns on their investments to help secure the support of the international financial community; and taxpayers who have sustained the austere measures necessary to achieve the 7.5 per cent surplus.
He said Government must therefore stay the course as, “it makes no sense making the sacrifices and turning back before you have reached the goal that you set out to reach. To do that would be a betrayal of the years of wage freeze of the public sector workers. To do that would be a betrayal of the creditors, the people with their pension fund holdings, with their investments who gave up their earnings in order that Jamaica could return to a path of sustainable growth.”
Minister Phillips said that now more than ever, the country must demonstrate the courage and determination to stay the course in order to realise three or five per cent growth, instead of one or two per cent.
“It is necessary that we do not veer from the course that has been set if we want to sustain the rate of growth and indeed accelerate the rates of growth that are before us,” he stated.
Dr. Phillips identified growth and job creation as the centrepiece of Government’s economic programme and pointed to the Business Process Outsourcing (BPO) sector as one of the fastest growing, with the greatest potential to reduce youth unemployment.
He also hailed the signing of a $14 million partnership agreement between the parent Columbus Business Solutions (CBS), and the Business Processing Industry Association of Jamaica (BPIAJ) for the establishment of the BPO Incubator in the Montego Bay Free Zone. This he said will make a great impact on the country’s unemployment figures.
The Finance Minister lauded the major investment of $34 billion in the country’s tourism product by the Hyatt, Melia and Blue Diamond brands, noting that these will bring employment to 2,609 in the short run.
In addition he noted, the Indigo Bay investment – a 36-room resort-type villa – in Point, Hanover, represents a $480 million and more employment prospects for skilled workers.
Deputy Managing Director of the IMF, Dr Min Zhu, endorsed the structural adjustment regime, and charged the government to stay on its trajectory.
He also commended the private sector for its role through the Economic Programme Oversight Committee (EPOC), in monitoring the fiscal operations of government.
Minister Phillips and his Caribbean counterparts will be in attendance at the IMF World Bank, Inter-American Development Bank Forum, which is being held on October 23 and 24 at the Montego Bay Convention Centre.
The high level Caribbean forum brings together prime ministers, finance ministers, central bank governors and other officials from the region along with senior officials from the multi-lateral agencies, and the private sector.