Progress in IMF Talks with Jamaica

KINGSTON, Jamaica – Finance and Planning Minister, Dr. the Hon. Peter Phillips, says the visiting Mission team from the International Monetary Fund (IMF), has broadly accepted the Medium Term Economic Programme that was signed off on by the Cabinet, as a viable starting point for negotiations.

The IMF team has been in the island since September 24 to conduct negotiations towards a new agreement, and Dr. Phillips pointed out that over the past two weeks, substantial and significant progress has been made in advancing the work in critical areas of “structural reform, including taxation policy and tax administration, pensions and wages, among other areas.”

“We are at the point where we are sufficiently advanced that we have started to discuss a draft outline of a Letter of Intent and Memorandum of Economic and Financial Policies, which would be the embodiment of the programme,” the Minister noted.

Dr. Phillips, who was addressing a wrap-up press conference with the IMF Mission team at the Ministry of Finance and Planning, Friday (October 5), said the Government is still working to arrive at an agreement for submission to the IMF Board by year end.

He pointed out however, that there is still “some technical work that needs to be undertaken by both sides,” and that in the upcoming days, a technical team will be visiting Washington to continue discussions with their counterparts at the IMF.

“There is still work to be done in finalising and agreeing on all the elements of the programme. There is technical work to be done in some areas. There is a refinement of the language to be undertaken in relation to some of the clauses in the working draft…. but overall, there has been substantial agreement on the basic framework of the programme that is to be agreed and which we consider to be a matter of high priority for us in the Government,” Dr. Phillips said.
Fund Mission Chief for Jamaica, Jan Kees Martijn, agreed that his team has “made substantial progress in identifying policies that could underpin a Fund arrangement.”

“I believe we have a shared diagnosis of the economic situation. We have a shared understanding of the short term vulnerabilities and longstanding structural challenges facing Jamaica, in particular, the cycle of low growth and high debt that has affected the country. We agreed on the need for a Medium Term Economic Programme that promotes high growth, that includes strong macro-economic policies to foster stability and a sustainable position and that is also fostering, critically, social cohesion,” the IMF Mission Chief said.

Mr. Martijn explained that the negotiating parties have reached an understanding on elements of the growth agenda; on some important structural reforms in fiscal and other areas, such as financial markets, and have discussed the preliminary timetable for the specific targets and objectives under an IMF programme.

He stated that the team is committed to working expeditiously to reaching an agreement on this programme.

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