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THE World Bank is in agreement with the International Monetary Fund (IMF) that the government's management of the macroeconomy has been commendable, but pointed to areas that still needed improvement.
Dr Auguste Kouame, lead economist with the World Bank and sector leader for Poverty Reduction and Economic Management for the Caribbean told Caribbean Business Report (CBR) that the World Bank's assessment has found that the policymakers have done a good job of stabilising the economy and putting it on a path to growth.
Kouame was a guest speaker at the Mona School of Business, University of the West Indies on Wednesday. He examined Jamaica and the World Bank's partnership in transitioning from global recession and high debt to economic growth.
"In the IMF programme as most of us would be aware, one critical objective was to stabilise the macroeconomy," said Kouame. He said the objective of the programme was to deal with the high levels of public debt, the high deficit, low revenues, and inefficient expenditure and that for the most part these objectives have been achieved.
"The objective was to try to correct all that. We at the World Bank agree with all the objectives. We also agree that some progress has been achieved. Since the programme started, interest rates, at least the interest paid by the Government has come down very significantly. It is now seven or eight per cent on T-Bills. So interest rates that the government was paying on debt service (on average domestic debt) came down from 19, 20 per cent to eight per cent. Interest rates on external debt came down from nine to seven per cent. So these are significant reductions and in terms of the economy this is very good progress," outlined Kouame.
"However, we have to go beyond that and that's what makes us the World Bank, because it's not enough to simply stabilise the economy. You can't just have a good macro framework which looks very good on paper," he added.
"People have to see a difference in their lives. You need to have development. You need to have growth. So a macro framework serves that purpose. A macro framework is not an objective in and of itself. So hopefully now that the government has extablished a more stable macro framework, the private sector and the people will see the difference in the country."
The World Bank has approved US$600 million in Development Policy Loans (DPLs) to Jamaica, one of the largest such loans to a country relative to the size of its GDP. The DPLs are to help the country achieve sustainable poverty reduction through a programme of policy and institutional actions. It supports general budget financing and helps avoid the need for government to borrow heavily from commercial banks and push interest rates up. The DPLs are also aimed at protecting expenditures on critical social programmes such as PATH and strengthening tax administration and tax revenue generating capacity of the Government.
Jamaica has so far accessed US$300 million of the DPLs which comprises US$100 million in January 2009 and another US$200 million in February 2010.
http://www.jamaicaobserver.com/busin...Kouame_7991809
Dr Auguste Kouame, lead economist with the World Bank and sector leader for Poverty Reduction and Economic Management for the Caribbean told Caribbean Business Report (CBR) that the World Bank's assessment has found that the policymakers have done a good job of stabilising the economy and putting it on a path to growth.
Kouame was a guest speaker at the Mona School of Business, University of the West Indies on Wednesday. He examined Jamaica and the World Bank's partnership in transitioning from global recession and high debt to economic growth.
"In the IMF programme as most of us would be aware, one critical objective was to stabilise the macroeconomy," said Kouame. He said the objective of the programme was to deal with the high levels of public debt, the high deficit, low revenues, and inefficient expenditure and that for the most part these objectives have been achieved.
"The objective was to try to correct all that. We at the World Bank agree with all the objectives. We also agree that some progress has been achieved. Since the programme started, interest rates, at least the interest paid by the Government has come down very significantly. It is now seven or eight per cent on T-Bills. So interest rates that the government was paying on debt service (on average domestic debt) came down from 19, 20 per cent to eight per cent. Interest rates on external debt came down from nine to seven per cent. So these are significant reductions and in terms of the economy this is very good progress," outlined Kouame.
"However, we have to go beyond that and that's what makes us the World Bank, because it's not enough to simply stabilise the economy. You can't just have a good macro framework which looks very good on paper," he added.
"People have to see a difference in their lives. You need to have development. You need to have growth. So a macro framework serves that purpose. A macro framework is not an objective in and of itself. So hopefully now that the government has extablished a more stable macro framework, the private sector and the people will see the difference in the country."
The World Bank has approved US$600 million in Development Policy Loans (DPLs) to Jamaica, one of the largest such loans to a country relative to the size of its GDP. The DPLs are to help the country achieve sustainable poverty reduction through a programme of policy and institutional actions. It supports general budget financing and helps avoid the need for government to borrow heavily from commercial banks and push interest rates up. The DPLs are also aimed at protecting expenditures on critical social programmes such as PATH and strengthening tax administration and tax revenue generating capacity of the Government.
Jamaica has so far accessed US$300 million of the DPLs which comprises US$100 million in January 2009 and another US$200 million in February 2010.
http://www.jamaicaobserver.com/busin...Kouame_7991809
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