FINANCE Minister Dr Peter Phillips and his economic team spent most of last week in Washington, DC representing Jamaica at the annual International Monetary Fund-World Bank meetings. But there was something different this time.
As important as the IMF meetings were, as well as the other multilateral financial institutions and commercial banks which the team met in close proximity, the Phillips-led aggregation was not negotiating or apologising or tendering well-practised excuses for policy breakdowns or missed deadlines.
This time round, the minister was not on hands and knees, but was campaigning on Jamaica's actual achievements, most important of which was passing — with room to spare — the tests mandated in the current four-year programme with the Bretton Wood institution.
The first review of the programme saw the IMF Board giving its vaunted approval to Jamaica's performance on September 30. The confidence of the economic team was immediately buoyed by the upgrade of Jamaica's sovereign credit rating to B-minus from CCC-plus by Standard & Poor's.
Even better than the verbal endorsement of Jamaica's economic management is the tangible recognition. The performance of the Government of Jamaica has been rewarded by a signed loan with the Inter-American Development Bank (IDB) for US$60 million, the third tranche of financing for a public financial and performance management programme.
The significance of this loan derives from the fact that it represents the first policy-based loan operation, a euphemism for budget support, since 2011.
The loan is intended to support the Government of Jamaica's efforts to enhance public management by strengthening fiscal discipline, improving public financial management, and increasing public performance management. The loan is for a 20-year period, with a five-year grace period, at a Libor-based interest rate.
The Government of Jamaica took an extended period of time to get out of the starting blocks, after more than a year of negotiations. The first stage was admittedly slow, but it is now time to focus on the drive phase of the race to economic growth, sustainable debt and fiscal prudence.
Do we need to emphasise the need to not lapse into complacency or slack-off in fiscal management, given our history with IMF programmes of not getting out of the blocks well yet pulling up before the drive phase of the race? By bringing home the bacon Dr Phillips has garnered support to fuel the drive phase, but it will require political will, discipline and determination to get through the forthcoming IMF tests.
It is critical that the Jamaican populace continues to buy in on this IMF-led economic management programme. Jamaicans must be convinced that the hardships and the bitter medicine being applied will be worth it in the end. Because, make no bones about it, things are tough and purchasing power has been ravaged at a time of high unemployment.
The light at the end of the tunnel must be oncoming prosperity and not a speeding train.