Jamaica seeks standby arrangement with IMF
MINISTER of Finance and the Public Service Audley Shaw yesterday gave a clear indication as to where negotiations with the International Monetary Fund (IMF) for a successor programme to the current Extended Fund Facility (EFF) agreement are headed.
Shaw told the annual pensions seminar at the Jamaica Pegasus, New Kingston, that the Government is looking at a “precautionary” standby agreement with the IMF to replace the EFF, which ends next year.
“In other words, we will stick to our fiscal consolidation/fiscal prudence (policies), and we will have half-yearly reviews (of our performance) rather than the quarterly reviews,” he told the seminar which was hosted by Prime Asset Management Limited, in association with the Private Sector Organisation of Jamaica.
Shaw said that under this new agreement reserved funds would also be available to Jamaica whenever it is needed.
The IMF’s standby arrangement was created in June 1952 to provide financing to countries requiring help with balance of payments problems. It is often used by member countries and is the dominant lending instrument of the IMF, especially for emerging market countries.
A standby agreement was approved by the IMF board for Jamaica in February 2010, but subsequently went off track. The new four-year EFF programme, which replaced it in 2013, is geared towards a gradually implementation of measures to reduce the risk of encountering the same economic crisis and create a platform for sustainable economic growth by improving the country’s fiscal balances and reducing the debt burden.
A precautionary standby or an extended arrangement is one in which the member agrees to meet specific conditions for use of IMF resources, although it has indicated to the executive board its intention not to make purchases (drawings).
Shaw said that the Government and the IMF are midway in the current discussions, and added that the talks are “going well”.
“The team is right here now and we feel so assured that we have our hands on the wheel and we are confident that we are going to move smoothly into the new programme,” he told the seminar.