Gov't extends life of EPOC Committee to EPOC

Committee to go beyond the end of Jamaica's IMF programme in November

BY DURRANT PATE
Observer Business Writer

Friday, August 23, 2019

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The government has extended the life of the Economic Programme Oversight Committee (EPOC), which was supposed to have come to an end after Jamaica's three-year Precautionary Stand-By Arrangement with the International Monetary Fund (IMF) in November 2019.

Finance and Public Service Minister Dr Nigel Clarke along with EPOC's Chairman Keith Duncan yesterday signed a memorandum of understanding (MOU) to this effect at the ministry, which would see EPOC continuing to work beyond this year. Other signatories to the agreement included President of the Private Sector Organisation of Jamaica Howard Mitchell.

The agreement extends EPOC's domestic monitoring of Jamaica's economic reform programme beyond the end of the IMF programme until the Fiscal Council is established and the institutional framework for making the Bank of Jamaica truly independent is put in place. Cabinet has already approved the establishment of an independent Fiscal Council as part of measures to strengthen Jamaica's fiscal responsibility framework.

This move is consistent with plans by the Government to secure Jamaica's gains under successive economic reform programmes with the IMF and build on the success of domestic partnership initiatives. The much-talked-about Fiscal Council is a permanent, independent, non-partisan institution created by legislation, staffed by competent, experienced and technically proficient persons who help to promote economically sustainable fiscal policies across political cycles.

The MOU extension with EPOC also follows the government's agreement with the IMF to keep its office in Jamaica open for two years following the end of the Precautionary Stand-By Arrangement in November this year.

LEGISLATIVE ARRANGEMENTS

Addressing yesterday's signing ceremony, Minister Clarke pointed out that “the government is far advanced in enacting legislation to modernise the Bank of Jamaica, inclusive of the institutionalising independence in the implementation of monetary policy. We are working to table legislation by April 2020 to implement the Fiscal Council that will strengthen Jamaica's fiscal responsible framework and be an independent arbiter of Jamaica's fiscal rules.”

He emphasised that the Holness administration is “committed to empowering EPOC to continue in a monitoring role until our central bank and Fiscal Council policy commitments are operationalised”. Jamaica is set to complete its Precautionary Stand-By Arrangement with the IMF in November, having brought the prior Extended Fund Facility arrangement with the IMF to a successful early termination in November 2016.

This will conclude approximately six-and-a-half-years of successful programme engagement with the IMF.

According to the finance minister, “given where we are coming from, the macroeconomic gains that Jamaica has enjoyed over the last six years are a Jamaican success story, recognised around the world. This success is wholly attributable to the effort and sacrifice of the Jamaican people and we owe it to the Jamaican people to preserve and build on these gains even as we work to address the other important challenges.”

When questioned about how long will EPOC be asked to serve, Minister Clarke was unable to give a definitive answer, explaining that this is dependent on how soon Parliament approves the legislative arrangements for both the council and making the central bank truly independent in handling the country's monetary affairs. He reiterated that the legislative arrangements would be tabled in parliament by April next year.

For his part, Duncan expressed his pleasure in serving in this interim period, promising to keep the public informed on the government's economic reform programme. He declared that EPOC, whenever it has concerns with the programme, will be communicating with the public, as it has been doing since its establishment in 2013.


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