IMF to endorse, encourage Jamaica, Dr Phillips

Wednesday, June 11, 2014

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Under Jamaica's tempestuous relationship with the International Monetary Fund (IMF), two fund programmes crashed during the 1970s. That prompted the Michael Manley Government to take a "non-IMF path" and make the "Imperialist Monetary Fund" the central issue of the 1980 general election.

Messrs David Coore and Eric Bell exited the post of Minister of Finance; Mr Edward Seaga, despite US influence and huge handouts of aid quarrelled bitterly with the Fund about its inflexibility and could not get his way even after the infamous report of the "Fresh Look Team". Mr Seaga had an ignominious exit as finance Minister and Prime Minister.

The P J Patterson administration decided it would not have a borrowing relationship with the IMF but the Bruce Golding Government ventured where no previous government had been successful, namely into another IMF agreement. Mr Andrew Holness left Jamaica House before he had warmed the seat, with Mr Audley Shaw in tow.

Circumstances have certainly changed from this unpleasant history to the point where the IMF wants to hold up Jamaica as an example of what countries should do. This time there will be no hostile demonstrating crowds and no accusations of destabilisation of the Government. Hopefully, somebody in Barbados is following these events as they contemplate an agreement with the Fund.

The Managing Director of the International Monetary Fund (IMF) Christine Lagarde, will visit Jamaica on June 27 for meetings Prime Minister Portia Simpson Miller and Finance Minister Dr Peter Phillips, among others, including members of the private sector and civil society.

In our view, Ms Lagarde's visit is a signal to the international financial community, the Jamaican public and struggling economies such as Barbados that "Jamaica is the son in which we are well pleased". She is coming to Jamaica to bestow the accolade of the IMF seal of good housekeeping. This is a boost for confidence following the upgrade by Moody's. Miss Lagarde would not personally give her endorsement to a programme which is not yet complete unless that government enjoyed her confidence that they will successfully complete the rest of the programme.

Hopefully, the strong signal will be received across 19th Street NW in Washington DC at the World Bank and induce that institution to increase its financing role in the future. This role has been carried in recent years by the smaller Inter-American Development Bank.

That the managing director of the IMF has chosen to visit Jamaica is a tribute to the fact that Jamaica successfully carried a draconian economic programme. Dr Phillips must be credited with having the technical competency, political courage and administrative skill to get pass all the tests and other requirements. His fortitude and performance compares favourably with his predecessors since the mid-1970s.

The imprimatur of Lagarde and the IMF must not be an inducement to relax the effort but an encouragement to tough it out to the end. Economic recovery is not a sprint, it is a middle distance event involving strength and speed. Stabilisation is just the first lap. There are no performance enhancing short-cuts.




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