IMF's representative says the country has come too far to allow for any reversal

Observer Business Writer

Friday, August 16, 2019

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Dr Constant Longeng Ngouana, the International Monetary Fund's (IMF) resident representative in Jamaica, believes that based on the success of Jamaica's initiatives to improve its economic performance in recent years, the country is now ready to exit the IMF programme and manage its affairs.

“Oh absolutely, absolutely,” he insisted during a recent interview. “Jamaica is ready. Jamaica is ready to exit IMF financial support and I want to stress 'financial support' because we have been a strong partner to Jamaica. We will continue to be a strong partner to Jamaica.”

“But the nature of our relationship will change to reflect the maturity of the Jamaican economy and the maturity of policymaking in Jamaica,” he added, stating that the IMF will continue to consult with Jamaica once a year just as they do with other member countries.

Ngouana attributed this transition to the country's “sound policymaking with broad-based consensus” that resulted in economic transformation over a relatively short time frame.

“If you're looking back starting from 2013 up to now, Jamaica has exceeded expectations by far,” he said.

“There were a lot of doubts as to whether Jamaica will be able to pull this off and I think fast-forward to today and everybody is in agreement that this has been a tremendous turnaround and we get calls all the time asking how did the Jamaican people do it. It's really an economic transformation for such a short period.”

The IMF resident representative pointed to a reduction of public debt from 147 per cent of GDP in March 2013 to 95 per cent of GDP by March 2019, to illustrate his point.

He also referenced the increase in foreign reserves from under US$ 1 billion to more than $3 billion over the past six years, as well as the island's reduction in inflation from double-digit to low single-digit figures, to underscore the improvement in the country's fortunes.

“Look at unemployment which is directly related to the people,” he emphasised. “16.3 per cent in April 2013, 7.8 per cent in April 2019. Less than half in six years and the list goes on and on and on.”

Ngouana also stressed that while there is a debate about whether or not the level of economic growth is where it should be, Jamaica's growth of 1.9 per cent in 2018-19 is more than twice the average rate of growth of the past 20 years.

“So, yes it is low but we are getting there,” he said.

Crime, the need for modernisation of Jamaica's agriculture, as well as access to finance are three “structural impediments” that are still suppressing growth, according to Ngouana.

On a positive note, he pointed out, however, that while the government is repaying debt resulting in more money in the system, the banks and small businesses are working together on “how to close the information gap and get financing flowing to productive sectors”.

In the opinion of the IMF resident representative, Jamaica has set the standard not just for the Caribbean, but for the rest of the world in terms of its economic performance, and he attributes this success to all the various stakeholders being on the same page.

“We have seen a country where the ownership of the economic programme was far-reaching,” he said.

“We have seen a country where the broad-based social consensus has allowed two successive administrations to implement sound policy.”

“We have seen a country where we have had continuity in the reform and the Jamaican people being engaged in the process to be part of that transformation,” he continued.

“So we believe these are features that many countries could learn.”

At the end of the interview, Ngouana advised the Jamaican people to remain on their current path.

“Jamaica has come too far to allow for any reversal,” he insisted. “Sacrifice has been far-reaching by all Jamaicans and we encourage the Jamaican people to stay the course.”

“The world is watching and I put my trust in the Jamaican people in delivering on that promise,” he concluded.

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