KINGSTON – Managing director of the International Monetary Fund (IMF) Christine Lagarde acknowledged yesterday that Jamaica’s structural adjustment programme with the fund has been painful, but said that with fundamental reform the foundation for a better economic future can be put in place.
“Many Jamaicans have seen their wages frozen and are facing higher prices for food and other essentials,” the IMF boss said following a meeting at Jamaica House yesterday with Prime Minister Portia Simpson Miller. She told reporters that the most vulnerable must be protected in the adjustment process, as an ongoing emphasis on safeguarding social spending and increasing the social safety net is crucial.
The IMF managing director, in her official statement, made no mention of the sliding Jamaica dollar, which has been blamed for rising prices and economic woes faced by Jamaicans.
“Jamaica has the IMF’s full support [and] we stand ready to help in any way we can, but of course it is up to you, Jamaicans, with the public and private sector working in close harmony, to build a bright future for this beautiful country,” said Lagarde. In the meantime, she praised Jamaica’s performance, saying the four year US$930 million Extended Fund Facility is off to a very strong start and is an exceptionally strong record by IMF standards.
Said Lagarde: “The economic outlook is improving. Compared to a year ago, growth has picked up, unemployment has declined, inflation has been brought under control, the current account deficit has shown an ongoing improvement, and reserves are starting to recover. “Much has been achieved, and yet much remains to be done.
In the first year of programme implementation, key reforms that had been pending for a long time were implemented, in particular the tax incentive legislation approved by Parliament in December 2013, and the fiscal rule approved in March 2014. But there are other major reforms that are on the mustdo list, including improving the collection of taxes, modernising the public sector, and improving the business climate. Consistent implementation of these reforms will boost investor confidence and growth.”
Prime Minister Portia Simpson Miller, who also addressed the press briefing, said her Government was conscious of the difficulties people have been experiencing in the current circumstances, but she, too, made no reference in her official statement about the sharp devaluation of the Jamaican dollar.
Said Simpson Miller: “Stimulating growth and employment is, at this time, the highest priority of both the Government of Jamaica and the fund.
We are advancing with major projects, which you will hear more about as they progress. “In this regard, the Jamaican Government is committed to continuing the process of reform. We are placing specific focus on cementing the gains from fiscal consolidation while accelerating the pace of domestic growth, making further improvements in the business environment, and implementing major projects in a timely way to serve as catalysts for growth and development.
“It is also the shared commitment of the Government and the IMF that vital social safety net programmes will be maintained to protect the most vulnerable, even as we press ahead with economic transformation.” (Observer)
