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IMF warning

Local rep says country must act collectively; no renegotiation of agreement

Reporting by Observer correspondent Anthony Lewis

Monday, November 28, 2011    

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LUCEA, Hanover — The International Monetary Fund (IMF) says the present terms of the stand-by agreement with the Jamaican Government is not up for renegotiation.

"When you talk about renegotiating... I can't talk about renegotiating something which has not yet finished; I will not be capable of renegotiating it until 2012," said senior IMF resident representative to Jamaica, Dr Gene Leon.

At the same time, he said there are several shortfalls in the Government's efforts to improve the economy but said the country must take stock and exercise its choice of acting collectively as a nation.

"Where we are at now is not the Government alone that puts the country where it is. Where we are now is a collective result of all of you. It is everybody [who] makes purchases; it's everybody who imports and builds houses; everyone is in this together," Dr Leon said.

The IMF representative was addressing the Jamaica Chamber of Commerce's parish quarterly luncheon at the Grand Palladium Hotel and Lady Hamilton Resort in Hanover on Saturday.

On numerous occasions, members of the Opposition People's National Party (PNP) have indicated that if returned to Government, the party would seek to renegotiate the terms of the agreement with the IMF.

"The challenges in this country require a short-term national intervention programme to lift the difficulties we face. It also requires a longer-term platform for sustained growth and development; the two must work together. Implementation and action must be the focus of these programmes. In the first instance, my government would approach the IMF to redesign and recraft the stand-by agreement," Opposition Leader Portia Simpson Miller told the PNP's annual conference in September.

The Opposition has blamed 'continued mismanagement' of the country's economic affairs by the Government for the failure to meet targets of the US$1.23-billion stand-by agreement signed with the IMF in 2010.

The IMF senior representative made it clear, however, that his organisation is committed to Jamaica, pointing out that the fund is "able and willing to assist the country if asked on the way forward". He said that Jamaica is one of 187 countries that are members of the IMF and part of the organisation's obligation to its members is to provide support when needed.

"What we can say is that the IMF went into the programme with a view to assisting the Government and the people of Jamaica on addressing the problems that were confronting the country as of January/February 2010, and so consequently, at the end of this period, we will still be willing and able to engage and assist, if asked."

At the same time, Dr Leon called for a collective approach between the Government and its citizens to move the country forward. Jamaica, he said, is at a crossroads, and he urged the Government to take action to correct the state of the country's economic affairs.

"Doing nothing is not an option," he said. "If nothing is done, there are consequences which could arise and the country could reach a point where other lending agencies refuse to assist the country," he warned.

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