Jamaica, Antigua exploring IMF options

Minister with responsibility for Information and Telecommunications Daryl Vaz said that a team from the Ministry of Finance would be going to Washington during the first week of next month, following which an IMF team would visit the island. He said all t

KINGSTON, Jamaica, June 25, 2009 – As the Jamaica government consults with social partners today on the terms under which the island would enter an agreement with the International Monetary Fund (IMF), the cash-strapped administration in Antigua and Barbuda is having its own national economic symposium that will explore the possibility of going to that international agency for help as well.

Neither country has committed to going ahead with any IMF programme, but both say they are exploring the possibilities as the global economic crisis continues to take a toll on them.

In Jamaica, the consultation with representatives from the private sector, trade unions and the Opposition follows a directive from Cabinet for the government to explore the IMF stand-by facility to keep the country's medium-term economic programme on track. In his budget presentation last month, Prime Minister Bruce Golding said that while the government was not in a hurry to borrow from the IMF, it must lay the groundwork to cushion the economy.

Minister with responsibility for Information and Telecommunications Daryl Vaz said that a team from the Ministry of Finance would be going to Washington during the first week of next month, following which an IMF team would visit the island. He said all those discussions will then be reviewed by Cabinet toward the end of July.

"Whether or not we go back to the IMF is all dependent on what comes out in relation to these discussions, in relation to the specific terms which is what has to be nailed down, so that the government clearly understands what it would mean to the government and the people of Jamaica, for a return to the IMF," Vaz said.

Over in Antigua, the economic symposium which is taking place is the culmination of a series of consultations to discuss the government's proposed policies and strategies to combat the impact of the ongoing economic and financial crisis on the economy. These policies and strategies are part of a National Economic and Social Transformation (NEST) Plan, which will be the focal point for today’s talks.

Finance Minister Harold Lovell says included in these talks will be discussions about possible IMF assistance, with officials from the Washington-based agency and the financial secretary from neighbouring Dominica – which he said had undergone a successful IMF programme – expected to speak on the panel.

He said that because of a 25 per cent fall in revenue, the government simply did not have the money to carry out its programmes and would therefore have to explore all its options.

“It is something that we will place on the table for consideration,” he said. “We have to look at all the possible financing sources that would be available to us given the very limited space that we have at the moment to operate.”

Earlier this year, his ministry had announced a number of austerity measures including a freeze on new hiring, no implementation of new programmes or extension to existing programmes, and rationalization and reduction in overtime pay. Lovell said yesterday that in addition to those steps, government workers over the age of 60 years are now being sent on retirement.

The economic situation in the island has seen some public sector employees being paid late, but the Finance Minister insisted that government would not be seeking to reduce its wages and salary bill by cutting jobs, as has been the case in other countries and in the private sector.