News

JLP to blame for low NIR — Phillips

BY ALICIA DUNKLEY-WILLIS Observer senior reporter dunkleya@jamaicaobserver.com

Friday, October 26, 2012    

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IT'S the Jamaica Labour Party's (JLP's) fault that the Net International Reserves (NIR) is the lowest it's been in nine years.

That's the accusation Finance Minister Dr Peter Phillips made as he responded to concerns raised by his predecessor under the JLP administration, Audley Shaw, in Parliament Tuesday.

According to Shaw, "the Net International Reserves is declining at a rapid pace", peaking "at US$2.6 billion last April, which was the highest level of NIR" to now stand at "US$ 1.2 billion - the lowest it has been in nine years".

In responding, the finance minister said Shaw had got his facts twisted.

"I would urge the member not to try to engage in scaremongering to talk down the country. The fact of the matter is that the reason the NIRs are at the level they are at is precisely because of their (JLP) abandonment of the previous programme," Dr Phillips said.

The minister was apparently hinting at the JLP missing some IMF targets while in government and consequently having to revise the estimates of expenditure. The JLP lost the general election late last year while it was in the throes of renegotiating the IMF deal.

"I would urge once again, let us not cause this particularly difficult situation in which the country finds itself to become the subject of political one-upmanship," Dr Phillips added, Tuesday.

Shaw contended that international suppliers were concerned and were cutting back on goods to Jamaica because they were unable to get their foreign exchange settlements on time.

"There are local importers who are complaining that when they go to their banking institutions they are getting only a fraction of the amount of funds that they want," he said amidst furore from the government side.

Meanwhile, the finance minister emphasised that "there are no areas of fundamental disagreement between the International Monetary Fund (IMF) and the Government" with discussions now underway as to the contents of a draft Letter of Intent.

Shaw, on Tuesday, chided the Government for being contradictory and confusing about the timetable for the conclusion of the pact, quoting Prime Minister Simpson Miller in one instance saying the Government wanted to conclude an agreement, and Dr Phillips in another case saying he expected an agreement by December.

Defending the length of time it has taken to secure the new agreemen, Dr Phillips said "it is a negotiation; one party by itself cannot determine a timeline.

"Does the prime minister want an early settlement? Yes, in fact we could have an agreement tonight if we were prepared to sign to anything, [but] we seek to have an agreement that when we have it we are able to honour it and to be able to have it in the best interest of the country," he said.

"Any confusion that exists, exists only in his (Shaw's) mind. I see nothing that should prevent us having an agreement in place by December. There is no delay in the process of negotiations with the IMF, and we are proceeding in accordance with the timetable originally set out," Dr Phillips reiterated.

A negotiating mission from the IMF visited Jamaica between September 24 and October 5 this year.

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