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IMF programme rests on three pillars
Thursday, 04 February 2010
Months of negotiations and delays are now at an end as the International Monetary Fund (IMF) on Thursday approved a 27-month Stand-By Arrangement with Jamaica.
The IMF's Executive Board <span style="font-weight: bold">approved the application for US$1.27 billion after more than six months of haggling</span>.
This agreement rekindles Jamaica's borrowing relationship with the IMF after almost 15 years.
The country will now embark on a new IMF programme that politicians and pundits say is critical to address some deep seated structural deficiencies in the nation's economy and to get the country on the path to growth.
Trevor Alleyne, the IMF's Mission Chief to Jamaica, who made the announcement Thursday afternoon, reiterated the government's message that the agreement was based on three main pillars - a plan to put public finance on a sustainable path, getting interest rates down through the Jamaica Debt Exchange and bringing legislative reform to further strengthen the financial sector.
Jamaica now has the critical task of meeting some crucial conditionalities that will be assessed each quarter.
The goals seem ambitious, but according to the IMF, it is not worried that Jamaica will fail to meet them after getting its first draw-down of US$640 million.
"We do look to see whether the numbers add up, whether the policies are coherent and if that were not the case, I don't think our managing director would have recommended that our board approve the programme if that was not so," Mr. Alleyne said.
<span style="font-weight: bold">But what if Jamaica fails to meet any of the targets set?</span>
According to Mr. Alleyne, it will result in Jamaica simply not getting any more money unless there is a special waiver.
"If targets are missed then the process of negotiations and discretion is always ongoing and why those performance targets were missed would need to be discussed and at the same time what corrective new measures are contemplated on the authorities side to get the programme back on track."
Thursday, 04 February 2010
Months of negotiations and delays are now at an end as the International Monetary Fund (IMF) on Thursday approved a 27-month Stand-By Arrangement with Jamaica.
The IMF's Executive Board <span style="font-weight: bold">approved the application for US$1.27 billion after more than six months of haggling</span>.
This agreement rekindles Jamaica's borrowing relationship with the IMF after almost 15 years.
The country will now embark on a new IMF programme that politicians and pundits say is critical to address some deep seated structural deficiencies in the nation's economy and to get the country on the path to growth.
Trevor Alleyne, the IMF's Mission Chief to Jamaica, who made the announcement Thursday afternoon, reiterated the government's message that the agreement was based on three main pillars - a plan to put public finance on a sustainable path, getting interest rates down through the Jamaica Debt Exchange and bringing legislative reform to further strengthen the financial sector.
Jamaica now has the critical task of meeting some crucial conditionalities that will be assessed each quarter.
The goals seem ambitious, but according to the IMF, it is not worried that Jamaica will fail to meet them after getting its first draw-down of US$640 million.
"We do look to see whether the numbers add up, whether the policies are coherent and if that were not the case, I don't think our managing director would have recommended that our board approve the programme if that was not so," Mr. Alleyne said.
<span style="font-weight: bold">But what if Jamaica fails to meet any of the targets set?</span>
According to Mr. Alleyne, it will result in Jamaica simply not getting any more money unless there is a special waiver.
"If targets are missed then the process of negotiations and discretion is always ongoing and why those performance targets were missed would need to be discussed and at the same time what corrective new measures are contemplated on the authorities side to get the programme back on track."