Senior International Monetary Fund mission representative to Jamaica, Jan Kees Martijn, yesterday said the fund is “encouraged by the steady progress being made” by the country under the extended fund facility (EFF).
“We have found a strong resolve to implement the program and that is indeed critical because we all realize that there are serious challenges to be overcome,” Martijn said following a routine visit to the island by staff of the IMF.
The IMF on May 1 approved Jamaica’s application for a four-year EFF of approximately $958 million.
On Sunday, the Financial Times reported that the World Bank and the Inter-American Development Bank (IDB) – which helped to bankroll Jamaica’s program – were sceptical of its design, and Jamaica’s ability to adhere to its conditions.
Finance Minister Peter Phillips yesterday said it is no secret that the program is a difficult one, but he said Jamaica was committed to making the necessary reforms to change the country’s economic fortune.
“It is also worth pointing to the fact that whatever the apprehension that may exist in various sections of the global financial community, including the development banks, that both the IDB and the World Bank committed, with the approval of their board, substantial resources to the Jamaican program,” Phillips said.
NEED TO FULFIL OBLIGATIONS
He added: “What is incumbent on us to do now is to fulfil our obligations as a prelude to us being able to secure, not only from those institutions, but from the private markets, a long-term commitment to Jamaica’s economic transformation.”
The World Bank and the IDB will each lend $510 million to Jamaica under the program. In addition, both institutions will be providing technical support.
Under the EFF, Jamaica has committed to lowering its debt-to-gross domestic product ratio to about 96 per cent by 2020.
Martijn yesterday said fiscal discipline is critical if the country is to reduce the debt burden. He said the program is not easy but realistic.
The IMF mission chief told journalists that the fund stands ready to strengthen and refine the program over time.