Mr. Speaker, exactly a year ago, Jamaica faced a very different reality. Certainly for me, and the Economic Management Team at the MOF, it was a time of intense activity and immense pressure because of what was at stake.
Jamaica was grappling with the fall-out from the most severe economic crisis the world had seen in 80 years. Not only did we face an international economic crisis, we faced many natural disasters: the worst drought in 50 years, the most rain in many decades, storms, and hurricanes. All of this Mr. Speaker, was compounded by an economy that has only grown by 0.5 per cent per year for the past 16 years.
We inherited an economy on the border of collapse. The only option for survival was for us to make significant game-changing decisions. Top of the list was negotiating an IMF Agreement with the most ‘bearable’ terms possible – given the weak hand we held.
Well, Mr. Speaker, with God's help, we inked an Agreement with the IMF which unlocked unprecedented levels of funding from three other multilateral partners – the World Bank, the IDB, and the Caribbean Development Bank.
This was only the first step along a long journey to mapping out a plan for Jamaica to regain economic health. For although the JDX – an IMF ‘prior action’ – surpassed expectations in terms of investor support, the reaction of a post-JDX market remained to be seen. Would the interest rate hold? Would the financial sector have liquidity challenges? Would inflation become a runaway train? Would the exchange rate continue to be under pressure and would we have to resort to, as the previous Government did, a high interest rate regime as the sole mechanism of supporting the local currency? These were but a few of the significant imponderables… read more