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Jamaica Slow On Reforms, Says IMF
Published: Thursday | October 13, 20110 Comments
Gene Leon, (right) International Monetary Fund senior resident representative in Jamaica, speaks with Richard 'Dickie' Crawford during a civil society summit at the Spanish Court Hotel in New Kingston yesterday. - Rudolph Brown/Photographer
Dr Gene Leon, the International Monetary Fund (IMF) resident representative in Kingston, says Jamaica has not been moving fast enough to effect necessary reforms under the 27-month standby arrangement.
"The structural reforms that we mapped out, that we are saying needed to be done, and done within the window of opportunity, that window is closing and the reform is not taking place - or at least it's being delayed," Leon said yesterday while addressing a Jamaicans United for Sustainable Development summit at the Spanish Court Hotel in New Kingston.
Under the standby agreement, Jamaica has committed to lowering the country's public-sector wage bill from 11.5 per cent of gross domestic product (GDP) to nine per cent of GDP by March 2016. The country has also agreed to tax and pension reforms.
In addition, Cabinet yesterday gave approval for the sale of the Clarendon Alumina Production (CAP), another critical aspect of the arrangement.
Not officially advised
However, the fund up to last evening had not been officially advised of that approval and another IMF official, speaking from Barbados, told The Gleaner that the fund would have to study the terms of the deal before weighing in on whether it could potentially be a game changer in getting the standby reviews back on track.
"This is, of course, one of the important items under discussion and if it has been sold, we would like to hear it from the Government, before we make an official comment on it, so we can understand under what conditions and be able to assess the financial implications on the Budget," said Luid Breuer, chief of the IMF Caribbean 2 division and mission chief to Jamaica.
In the meantime, the parliamentary committee considering a Green Paper on tax reform last week had its first meeting to consider the proposals in that area.
A similar parliamentary committee to consider pension reform has been named but that committee has not yet started meeting.
During yesterday's summit, Leon underscored that a wage freeze, which was to be in place until March next year, was a critical part of the agreement and said that its removal would impact the ability to achieve the nine per cent of GDP wage-bill target that has been set.
Jamaica has been unable to draw down on funds from the IMF as a result of its failure to have quarterly reviews done since December 2010.
Uncertain future
On Tuesday, Opposition Leader Portia Simpson Miller charged that the programme was in dire straits and that Jamaica's economic future appeared uncertain as a result of the status of the IMF programme.
"The failure of the IMF tests and the uncertainty about the future of the standby agreement have meant that the country has not been able to draw down significant amounts from the IDB (Inter-American Development Bank) and the EU (European Union). This sum is in excess of US$300 million," Simpson Miller claimed.
Jamaica did not sit review tests for December 2010, March 2011 and June 2011.
Yesterday, Leon said, "It's not true that we don't have a programme."
He added: "We still continue to discuss with the Government because the idea is not to say to the board, we don't have an agreement. But we want to be able to work as a partner and say we don't think that policy, set of policies, will get you there."
Said Leon: "And so we need to keep speaking and, after that dialogue, hopefully get to that point where there is agreement and that agreement can go to the board."
Published: Thursday | October 13, 20110 Comments
Gene Leon, (right) International Monetary Fund senior resident representative in Jamaica, speaks with Richard 'Dickie' Crawford during a civil society summit at the Spanish Court Hotel in New Kingston yesterday. - Rudolph Brown/Photographer
Dr Gene Leon, the International Monetary Fund (IMF) resident representative in Kingston, says Jamaica has not been moving fast enough to effect necessary reforms under the 27-month standby arrangement.
"The structural reforms that we mapped out, that we are saying needed to be done, and done within the window of opportunity, that window is closing and the reform is not taking place - or at least it's being delayed," Leon said yesterday while addressing a Jamaicans United for Sustainable Development summit at the Spanish Court Hotel in New Kingston.
Under the standby agreement, Jamaica has committed to lowering the country's public-sector wage bill from 11.5 per cent of gross domestic product (GDP) to nine per cent of GDP by March 2016. The country has also agreed to tax and pension reforms.
In addition, Cabinet yesterday gave approval for the sale of the Clarendon Alumina Production (CAP), another critical aspect of the arrangement.
Not officially advised
However, the fund up to last evening had not been officially advised of that approval and another IMF official, speaking from Barbados, told The Gleaner that the fund would have to study the terms of the deal before weighing in on whether it could potentially be a game changer in getting the standby reviews back on track.
"This is, of course, one of the important items under discussion and if it has been sold, we would like to hear it from the Government, before we make an official comment on it, so we can understand under what conditions and be able to assess the financial implications on the Budget," said Luid Breuer, chief of the IMF Caribbean 2 division and mission chief to Jamaica.
In the meantime, the parliamentary committee considering a Green Paper on tax reform last week had its first meeting to consider the proposals in that area.
A similar parliamentary committee to consider pension reform has been named but that committee has not yet started meeting.
During yesterday's summit, Leon underscored that a wage freeze, which was to be in place until March next year, was a critical part of the agreement and said that its removal would impact the ability to achieve the nine per cent of GDP wage-bill target that has been set.
Jamaica has been unable to draw down on funds from the IMF as a result of its failure to have quarterly reviews done since December 2010.
Uncertain future
On Tuesday, Opposition Leader Portia Simpson Miller charged that the programme was in dire straits and that Jamaica's economic future appeared uncertain as a result of the status of the IMF programme.
"The failure of the IMF tests and the uncertainty about the future of the standby agreement have meant that the country has not been able to draw down significant amounts from the IDB (Inter-American Development Bank) and the EU (European Union). This sum is in excess of US$300 million," Simpson Miller claimed.
Jamaica did not sit review tests for December 2010, March 2011 and June 2011.
Yesterday, Leon said, "It's not true that we don't have a programme."
He added: "We still continue to discuss with the Government because the idea is not to say to the board, we don't have an agreement. But we want to be able to work as a partner and say we don't think that policy, set of policies, will get you there."
Said Leon: "And so we need to keep speaking and, after that dialogue, hopefully get to that point where there is agreement and that agreement can go to the board."
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