Gov't, IMF mull over draft agreement

Monday, October 22, 2012    

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PRIME Minister Portia Simpson Miller says that her Government is now discussing a draft Letter of Intent that will embody its commitments during the period of a new agreement with the International Monetary Fund (IMF).

The prime minister made the announcement yesterday, two days after the third Cabinet retreat where the IMF agreement was one of two issues that dominated discussions.

She said a "programme of work" that will address several areas critical to reaching an agreement with the Fund is to be implemented in coming weeks.

According to Simpson Miller, the areas to be addressed include the ongoing public sector wage negotiations, the reduction of discretionary waivers, and setting an "acceptable timeframe" to "achieve the desired debt ratio", which is now approximately 140 per cent of the country's gross domestic product.

"The Bank of Jamaica will also continue to focus on reducing inflation and supporting financial system stability. In doing so, the Central Bank will conduct monetary policy within the existing framework of a managed floating exchange rate regime," she said in a statement prior to her departure for an official visit to Canada.

This, she explained, will maintain the competitiveness of the Jamaican dollar while using its instruments to ensure stability in the money, credit and foreign exchange markets. Reiterating the importance of the agreement to addressing the country's social problems, she said the Government was "working as hard as possible to conclude an agreement, but agreements of this sort exist between two parties".

"The timetable is, therefore, not ours alone to set. The process is a very difficult and complex one. The negotiation requires us to do the best we can to ensure that we get an agreement that is in the best interest of Jamaica.

"An agreement is very important for addressing the critical economic and social problems that the country now faces. The agreement must ensure that we not only carry out strategic reforms, but also lay the foundation for sustainable growth. This is the only sound and sustainable basis on which we are going to deal with our very serious public debt situation," Simpson Miller said.

Meanwhile, the retreat also facilitated the assessment of the progress of each ministry to determine whether they are "meeting the commitments made to the Jamaican people that are outlined in the People's National Party's Manifesto".

"...These are in keeping with the national growth agenda being pursued by the Government, while it seeks to honour its commitments to protect the vulnerable," Simpson Miller said.

She also promised "increased communication of matters of governance" with Jamaicans at home and abroad.

"I have given my ministers the charge not only to be energetic and effective in the running of their ministries, but to have constant communication with the sector groups and communities most directly impacted by the programmes they undertake," the prime minister said.





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