Prime Minister Golding: Yes to IMF, but on Jamaica terms

KINGSTON, Jamaica, CMC - Prime Minister Bruce Golding says his administration will only enter into an agreement with the International Monetary Fund (IMF) if the terms are beneficial to Jamaica.

"We are not going to go back into any IMF agreement unless we are satisfied that that agreement is good for Jamaica, that it has the provisions in it to help Jamaica to move forward, and not to help Jamaica to go into any reverse gear. We are not into that," he said.

During his budget presentation last month, the Prime Minister said that Jamaica was looking at possible assistance from the IMF in light of the global financial crisis and continued concerns about the country's balance of payments, as well as pressure on the Net International Reserves (NIR).

The Jamaica government said that the shortfall in foreign exchange was due to the impact of the global financial crisis on the island’s main sources of foreign exchange, particularly bauxite, remittances and tourism. 

Two local bauxite companies have been temporarily closed as a result of the crisis, while remittances have dipped by 14 per cent this quarter compared with the similar period last year. 

The Net International Reserves (NIR) stabilised at US$1.62 billion at the end of March and increased to US$1.66 billion in April following over six consecutive months of decline. At the end of May, the NIR was US$1.67 billion.

On Thursday, the Prime Minister and Minister of Finance Audley Shaw, met with the social partnership group that includes the private sector, trade unions and the opposition to discuss the terms under which the country should enter into a funding arrangement with the Washington-based financial institution.

Golding later announced that more discussions would be held with the social group representatives and that the Finance Minister would be heading off to Washington next week to be followed by a visit from an IMF team.

He said Cabinet would review the provisions emanating from these deliberations during the month of July in order to arrive at a definitive position, following which an appropriate announcement will be made in Parliament.

The Prime Minister warned Jamaicans that the IMF package would not solve the country's problems, insisting that the solution was to produce more and import less.

"We all recognise that while you may need an IMF agreement to help you through this immediate storm that we are facing, an IMF agreement is not going to solve the problems of Jamaica. No World Bank, no IDB (Inter American Development Bank), is going to be able to solve the problems of Jamaica, because the problems of Jamaica are rooted. You could simplify it in one statement, we import too much and we do not produce enough for ourselves.

“It is only through increased production that Jamaicans would be able to build the economy, create jobs and build prosperity for the country.

"Whether the problem is unemployment, or crime, driven by a lack of opportunity, or it is bad roads because we are not deriving enough revenue to fix the roads as fast as we want...it comes down to one equation, we need to produce more, to depend on foreign producers less, and that is the way in which we are going to build the economy, create jobs and prosperity for Jamaica,” Golding added.

CMC/