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JAMAICA MUST SEEK EXTERNAL ASSISTANCE - PM
Golding says country faced with serious financial woes
BY ALESIA EDWARDS Observer staff reporter [email protected]
Friday, July 17, 2009
OCHO RIOS, St Ann - It is now certain that Jamaica is heading for a borrowing relationship with the International Monetary Fund (IMF), and discussions now are centred on the conditionalities to be imposed, Prime Minister Bruce Golding has indicated.
Addressing residents here at a town hall meeting Wednesday evening, Golding said the country has been faced with serious financial woes and had no alternative but to seek external financial assistance.
Prime Minister Bruce Golding (centre) greets participants at Wednesday's town hall meeting at the Ocho Rios High School in St Ann. (Photo: Alesia Edwards)
"We are likely to lose US$1.3 billion in foreign exchange earnings. when you have that fallout there is no capital market that you can go to say 'we need US$1.3 billion to borrow'", Golding said.
"So when you have that big, gaping hole in your external account what do you do? You have to look for external assistance," he added, citing fallout in the bauxite sector and remittances.
The prime minister painted a grim picture of what is likely to happen if external help is not sought, saying that "the country would collapse".
He said comments and criticisms regarding a return to the IMF were simplistic, adding that critics have not yet put forward a better solution.
Golding said Finance Minister Audley Shaw is to make a submission to Cabinet on Monday regarding the IMF, following which the country would be informed about the government's decision.
"Cabinet will consider it on Monday and I cannot pre-empt Cabinet, even though I preside over Cabinet, but it's when Cabinet makes that decision that Minister Shaw may well be authorised to make a formal application to the fund," Golding said.
". When that is done, that is when you start to negotiate with the fund, but we have been engaging in the discussions; we want to know what the conditionalities are likely to be; is it bitter medicine, is it worse medicine that we would have had to administer to ourselves."
At the same time, the prime minister made it clear that whether or not Jamaica goes to the IMF, it would not be business as usual as the country was faced with serious financial and economic problems.
"One of the encouraging things that we are getting out of these discussions with the IMF is that what we are proposing to do in terms of our medium-term economic programmes are no different from what the fund would insist on," he said.
Golding says country faced with serious financial woes
BY ALESIA EDWARDS Observer staff reporter [email protected]
Friday, July 17, 2009
OCHO RIOS, St Ann - It is now certain that Jamaica is heading for a borrowing relationship with the International Monetary Fund (IMF), and discussions now are centred on the conditionalities to be imposed, Prime Minister Bruce Golding has indicated.
Addressing residents here at a town hall meeting Wednesday evening, Golding said the country has been faced with serious financial woes and had no alternative but to seek external financial assistance.
Prime Minister Bruce Golding (centre) greets participants at Wednesday's town hall meeting at the Ocho Rios High School in St Ann. (Photo: Alesia Edwards)
"We are likely to lose US$1.3 billion in foreign exchange earnings. when you have that fallout there is no capital market that you can go to say 'we need US$1.3 billion to borrow'", Golding said.
"So when you have that big, gaping hole in your external account what do you do? You have to look for external assistance," he added, citing fallout in the bauxite sector and remittances.
The prime minister painted a grim picture of what is likely to happen if external help is not sought, saying that "the country would collapse".
He said comments and criticisms regarding a return to the IMF were simplistic, adding that critics have not yet put forward a better solution.
Golding said Finance Minister Audley Shaw is to make a submission to Cabinet on Monday regarding the IMF, following which the country would be informed about the government's decision.
"Cabinet will consider it on Monday and I cannot pre-empt Cabinet, even though I preside over Cabinet, but it's when Cabinet makes that decision that Minister Shaw may well be authorised to make a formal application to the fund," Golding said.
". When that is done, that is when you start to negotiate with the fund, but we have been engaging in the discussions; we want to know what the conditionalities are likely to be; is it bitter medicine, is it worse medicine that we would have had to administer to ourselves."
At the same time, the prime minister made it clear that whether or not Jamaica goes to the IMF, it would not be business as usual as the country was faced with serious financial and economic problems.
"One of the encouraging things that we are getting out of these discussions with the IMF is that what we are proposing to do in terms of our medium-term economic programmes are no different from what the fund would insist on," he said.
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